US throws social lenders out of its temple of economic doom

Fresh from putting the financial markets to the flame, a heroic regulator goes in search of innovation that needs snuffing out
Fresh from putting the financial markets to the flame, a heroic regulator goes in search of innovation that needs snuffing out

A critic might be tempted to observe that while the SEC was utterly ineffective in preventing the excesses that brought about the current financial crisis it is only too effective at stamping out viable alternatives to the status quo, such as social lending. 

*Ahem* I almost feel like apologising for that headline: blame the cold medicine. 

But the more urgent apology should come from US regulators the SEC to the credit crunch-afflicted poplace of the United States for blocking out the ray of light that was social lending. 

Last month they issued a cease and desist order to Prosper, one of the largest social lending enterprises in the US, forcing it to stop issuing loans. Techcrunch explains the significance of this move

And it is not just Prosper, but all P2P lenders, that are on notice. Loanio, a new entrant into the P2P lending arena that just launched last month, has suspended new loans until it registers with the SEC as well (see notice below). And last April, competitor Lending Club was the first P2P lender to temporarily cease operations (the SEC approved its registration, and its members are now lending again in about half the states, including California which gave it the go-ahead last week).

This is a stupid error for the US financial services market on two counts: 

  1. Some alternatives to the, er, discredited credit markets for individuals is now gone.
  2. For a nation that prides itself on innovation the US is putting a truly promising set of ideas around social media and finance in jeopardy. On the upside, an opportunity for the UK to perfect the models and wait for the regulators to see sense?

A critic might be tempted to observe that while the SEC was utterly ineffective in preventing the excesses that brought about the current financial crisis it is only too effective at stamping out viable alternatives to the status quo. 

Zopa, the most credible of the social lenders to my mind, was trying a slightly different model to the other social lenders has also had to pull out – its founders explain their thinking on The Tricky World of US Regulation heir blog. Its thriving UK operation, and Zopas in Italy and Japan remain very much alive. 

: : I seem to recall that Virgin Money US was operating a social lending system also. Haven’t seen anything about that being shut down….

: : : I guess that Gartner may want to revise its forecast of 10% of retail loans being made by social lending by 2010 in light of this.

Geeks you can see from space (well, Google Maps)

Maybe I should reserve judgement until the project is concluded, but I think that Moblog impresario Alfie Dennen may have surpassed himself with the Britglyph project.

The plan seems to be use a combination of GPS and digital photography to map out a geoglyph, a large drawing on the ground, using geeks around the UK to make up the points in a kind of join-the-dots exercise on a massive scale. 

The image that people will create, basically by dropping stones on the ground and pins in a Google Map with images attached, is of John Harrison‘s Chronometer H5, the 18th century technological marvel that gave us an accurate way to measure Longitude.

 

An excerpt from the lost graphic novel: Chronometer to Crack Up: The Fall of John Harrison

The project seems to be in part to promote Shozu, a mobile software application which, as Lloyd Davies pointed out in a comment yesterday, can be set to automatically attach a geotag (location reference) to photos that you upload to Flickr, and possibly elsewhere. 

I grew up partly in the Vale of the White Horse, the white horse being one of the oldest geoglyphs in the UK. I recall that people said it used to be a serpent until King Alfred‘s soldiers carved legs on it to celebrate a major battle – but I can’t find any trace of that story on Wikipedia or other websites.

Don’t be too useful: the key to social media success for brands?

Basically an excuse to use Flickr Spell again (See L is for Long Lost Pals, below)

Bankervision blogger, James Gardner got me thinking a recent post Why Banks Won’t Do Social Media, by putting forward the notion that in order to engage with people in social media you should eschew the useful and focus on “the banal”.

He even went so far as to say that “not useful” might be the right kind of approach for banks (the kinds of brands he thinks about most, seeing as he works for one).

Seeing as how “be useful” more or less underpins the way I think about brands on the web, I was intrigued to say the least.

He conducted an for-fun experiment where he tried to put people off following him on Facebook by being as boring as possible (noting that he was breathing, now blinking, uploading photos of train platform gravel). What happened was that people engaged with him more than ever: 

Here is what I’ve found out so far: the less useful the content is, the more people engage with it. You’d not believe the string of emails I’ve been getting.

Now, although this is not an especially scientific experiment, it suggests to me you can build engagement with social media on things that are unimportant and irrelevant. But when you say things which, theoretically, would be interesting and useful, paradoxically, no one cares. Social media is a channel optimised for the insignificant.

Of course his “boring” updates might actually look like someone being ever so enigmatic and interesting and so attract attention. And the experiment overall isn’t proving an awful lot at all when it comes to brands. 

James continues by thinking about what has worked for banking brands so far in social media:  

…if you look at the successful social media experiments, such as VanCity’s ChangeEverything, they aren’t even about banking very much. VanCity has been clever enough to work out that they have to take a sideways approach.

Well, yes – sideways certainly, but not banal… Social media is optimised to being social, not boring. Sometimes the social value is in the details, in the things that others may think is not useful but to the people sharing it are very important, either because the information or activity is highly important to them or because the social trinket in question is actually doing another job. 

Going back to James’s experiment for a moment, the banal serves a purpose in a social network like Facebook. When my friend says “My heart is beating” I may find that amusing (such wit!) or I may just register it as a phatic expression (he’s there, he’s OK, he’s making contact). 

And beyond that, banks and other financial services comapnies will only get so far with their customers and prospective customers if the only conversation they are interested in listening to or taking part in is about their products. 

James is right, Vancity’s experiment is successful because they have come from the leftfield, that’s to say not charging down the centrefield waving a flag in the bank colours with their top saver rate on it. 

When you think about your customers in networks, sometimes a direct connection between your sale and them is not what’s appropriate or required. 

Perhaps, we should think in terms of “be useful, but don’t try to hard” or “don’t underestimate and overlook the usefulness of small things”.

On blogging…

I’d read people’s thought about Andrew Sullivan’s “Why I Blog“, an essay for The Atlantic magazine.

If you’re a blogger, or you seriously want to understand more about why some people devote so much time and energy to writing in this format, you must must must read it. 

It’s the most elegant and accurate longer-format discussion of why this still evolving medium is so precious and powerful I’ve yet read.

 

Unlike any single piece of print journalism, its borders are extremely porous and its truth inherently transitory. The consequences of this for the act of writing are still sinking in.

 

The essay begins by going back to the roots of the word, to the ship’s log and how it was used to progress of a vessel through a voyage. All about the journey you see. He then goes on to explain blogging’s strengths and how it makes him a better writer (and therefore thinker). 

Here’re some choice excerpts…

On its revolutionary nature: 

 

It was obvious from the start that it was revolutionary. Every writer since the printing press has longed for a means to publish himself and reach—instantly—any reader on Earth. 

 

On keeping a blog moving (I know how dangerous it is to pause): 

 

…as Matt Drudge told me when I soughtadvice from the master in 2001, the key to understanding a blog is to realize that it’s a broadcast, not a publication. If it stops moving, it dies. If it stops paddling, it sinks.

And more on blocks: 

 

You can’t have blogger’s block. You have to express yourself now, while your emotions roil, while your temper flares, while your humor lasts. You can try to hide yourself from real scrutiny, and the exposure it demands, but it’s hard. And that’s what makes blogging as a form stand out: it is rich in personality.

 

 

On writing in networks: 

 

The blogger can get away with less and afford fewer pretensions of authority. He is—more than any writer of the past—a node among other nodes, connected but unfinished without the links and the comments and the track-backs that make the blogosphere, at its best, a conversation, rather than a production.

 

On the intimacy of reading someone’s blog: 

 

You feel as if you know bloggers as they go through their lives, experience the same things you are experiencing, and share the moment. When readers of my blog bump into me in person, they invariably address me as Andrew. Print readers don’t do that. It’s Mr. Sullivan to them.

 

And if you like that… Here’s a video where Andrew Sullivan entitled catchily “Your Brain on Blogs”:

Google SearchWiki: brands need to watch & listen

 

 

SearchWiki results and comments for a search on "Google SearchWiki"SearchWiki results and comments for a search on

 

* Updated * 

There are two complementary evolutionary paths for SearchWiki: that taken by the Google engineers and the one cut by users. The comments / conversations may be poor quality at the moment, but who is to say how people will find ways to use the feature in interesting ways. 

Over the last week, there’s been a great deal interest and not a little froth on tech blogs about the Google SearchWiki, the feature in Google that lets you edit your own results and leave publicly viewable comments about them if you are signed in with a Google account.

It’s a highly interesting development, although some of the controversy has been a little overblown: people hunting out reasons to be irritated. 

The head of search at iCrossing UK, Jonathan Stewart has posted an analysis of the new service from both a search and social point of view, which incorporates some feedback I gave on the social media and PR front. 

We’ve been monitoring it since the beginning of November when we noticed Google bucket testing it, but it’s only been since last week, when it was officially launched, that it’s really been making waves. Anyone who doesn’t know what it is can read Dan’s explanation of Google’s SearchWiki here.

Google have stated that personal result manipulation won’t be used to determine the results for others – at least not in the short term – so the standard SEO rules will still apply for a while. What’s really causing problems is the amount of comment abuse that’s appearing – either in the form of spam, utterly inane conversations (a la Youtube), or blatently obscene and unmoderated abuse.

Essentially, Jonathan feels this is a “wait and see” issue. Google is likely to use the information from the way people use SearchWiki in the way it delivers its main results – but claims not to be yet. 

The most interesting thing from my point of view is the comments feature. Interesting because it represents a new social space, albeit one which users have to hunt out rather than it appearing front and centre on Google search results. 

There are two complementary evolutionary paths for SearchWiki: that taken by the Google engineers and the one cut by users. The comments / conversations may be poor quality at the moment, but who is to say how people will find ways to use the feature in interesting ways. 

: : If you can’t find the comments feature – and it’s not obvious to everyone – then Jonathan provides the following step-by-step:

  • Make sure you’re signed into a Google account
  • Type a query into Google, and then scroll to the bottom of the page
  • Click on the “See all notes for this SearchWiki link”
  • Immediately underneath the URL of each website in the search results, there is a link that tells you how many comments have been left. Click on that
  • Immediately underneath the URL of each website in the search results, there is a link that tells you how many comments have been left. Click on that
  • James Lappin on TFPL also has a great analysis of what the SearchWiki means. He sees it primarily as a social play by Google, very much with an eye to the usefulness of services like delicious.

    Do Tanks

    Er, well, metaphorically we should take the stairs instead of just thinking about it or taking the less challenging escalator. Um...

    Sometimes I think I would like to work for a think tank. Sounds like my kind of thing, all that thinking. 

    Imagine. Get into work, sit down and have a ruddy good think. Lovely. 

    Something niggles me, though. The last couple of years have taught me the about the power of doing as much as thinking, as especially thinking while doing. 

    So the other night, I decided that what would be better than working in a think tank would be being in a Do-Tank. Kind of like an innovation team without a company. Maybe it starts companies as it moves along, taking on edge challenges, riding new waves. But always creating things (technologies, services, models, products, ideas, whatever)…

    M’learned colleague Jim says that of course companies like IDEO are Do Tanks. I guess they are, really: applying innovation and creative thinking to challenges that companies face and to those problems that just take their fancy. 

    Of course, following the first law of ideas and the web (“Whatever you think of, someone’s probably doing something like it already”)…

    There’s the cool-looking DoTank Studios, a digital design firm in London: 

    There’s a public sector performance organisation in the Netherlands called Do Tank (although I seem to recall that “Do!” in Dutch is a word much like “‘Bye!” in English). 

    And there’s a fair amount of “Think-Do Tank” discussions out there. And naturally, the brilliant Word Spy has the skinny on the phrase “Do Tank”: 

    do tank n. A research institute that focuses on actions rather than ideas. Also: do-tank. 

     

    Example Citation:
    Like Elihu Root (1912), the first president of the Carnegie Endowment for Intertational Peace, [Jimmy] Carter heads a “non-governmental organization.” (But while Carnegie is a think tank, the Carter Center is more of ado tank.)
    —Hedrik Hertzberg, “He’s no. 19,” The New Yorker, October 28, 2002

     

     

    Earliest Citation:
    Midwest Research now ranks as one of the top not-for-profit private research facilities in the country. There are larger research institutes, but few with the growth record of MRI. Revenue for this year is expected to exceed $46 million, twice what it was just three years ago.

    A science journal recently labeled MRI “a small think tank in the Midwest.” Not so, says Harold M. Hubbard, MRI vice president for research. “We’re a ‘do-tank,’ not a ‘think tank.”‘
    —Scott Kraft, “Washington Dateline,” The Associated Press, November 18, 1979

    : : Stat fans may get a frisson of big-round-number-joy to know that this is post number 1,000 on Open… hurrah!

    Welcome to the new blog (not quite the same as the old blog)…

     

    A very warm welcome to the new home for my blog. 

    If you’re reading this via an RSS feed or email, there’s no need to re-subscribe as the Feedburner feed has been pointed at the new blog: you’re all set…

    Thanks to a WordPress-savant friend of mine, all of the posts, links, comments and images have also been migrated across to this one from the old Open. 

    He tells me that the biggest lesson of the exercise is: if you are seriously thinking about buying a blog, find yourself a geeky pal and get it set up on your own domain from the start. It gives you a lot more options as you develop it in future. 

    Please do let me know what you think…

    It’s from a finished article, but being a committed part-timer I’ll be tinkering and building this house as I go along.

    L is for Long Lost Pals

    letters.jpg

    Just when you think might have seen everything the social web has to offer, it tickles you with some magic.

    This morning I was entertaining my four-year-old son by building his name out of letters in Flickr photos. It’s a service I found a while ago called, appropriately enough, Spell With Flickr.

    It takes advantage of the fact that there are a lot of people who love letters, typography, in Flickr, who maintain neatly ordered, tagged, collections of images of individual letters.

    My son’s learning to read at the moment, so he loves letters. What I thought would be a few minutes of fun turned into an hour or so of exploring typography. Wonderful.

    He also picked up the concept of favouriting images so that he can find them again among the trillion or so pages on the web out there.

    One he chose was this L – the first leter of his name – made out of a pattern of coffee cups.
    L.jpg

    He was so enthralled by letters, we decided to take the camera on a walk along the seafront to find some letters of our own…

    When we got back there was an email for me from the photographer of L, who goes by the Flickr name UrbanMkr. Turns out I went to university with them, we’d lost touch since they’d moved to Montreal. They followed the link back to my account when Flickr had alerted them and saw my photo.

    Like I said, the web is a beautiful thing…

    I prefer iPhone to me laptop sometimes…

    iCrossing's New York office building, as seen in Google Maps

    The new iPhone software upgrade came out over the weekend. Love the fact that the phone I bought a few months ago keep getting better, instead of degrading like my last smartdumbphone did.

    The standout shiny new thing in the new set-up is Google Maps, the iPhone’s application which lets you quickly search for businesses, addresses, locate yourself on the map and plan routes. 

    Google Maps on the iPhone

    When I was in Atlanta last week I noticed that at close zoom the buildings’ outlines were shown on the map. Cool, I thought – that’s really useful when you’re navigating one of those anonymous grid layouts and are trying to find a landmark. The new software’s taken a big leap beyond that, however, as now you can click on a location and – where available – move down to streetview. 

    This is mainly only of use to me in the US, but I understand Google has been building a street-level index of the UK and other European countries over recent months.

    So, apart from the geek-thrill of a new piece of tech-wizadry, why is this interesting. Three things: 

    1. This is superb UI design. My four-year-old son sat on my lap while I showed him some of the parts of New York I’d recently visited. We panned and zoomed. Clicked on the arrows to move us along the street. Searched for a Fire Station for him to have a look at. Easy. He picked up the navigation in seconds, it was hard to stop prodding, squeezing, pushing the screen around to get the views he wanted.  

     

    Navigating past Union Square's Coffee Bar. You click on the white arrows to move along the street and can pan and zoom in any direction - pass the VR helmet!

     

    2. This is the best way to give directions / get directions quickly. I wished immediately I’d been able to use it a day earlier to shwo a colleague on his way to New York exactly where on Union Square the Coffee Bar was. again – when you’re looking at a city with a grid system, it’s hard sometimes (for a brain wired in England) to work out where things are on a map, or translate that map into real directions. 

    3. For some things, I prefer using my iPhone to a larger computer. Google Maps seems faster, more intuitive, personalised, connected into things like my contacts and email, and is just nicer to use.  Actually this iPhone bias in my computing usage is evident in a few other apps, like calendar and mail (for checking through large volumes). It speaks to the power of the iPhone but also to the latent productivity potential for multi-touch when it makes it to our larger machines and new formats too.

    : : Bonus geek-out… Also love the fact that my iPhone can now download podcasts direct without having to sync with my laptop… 

     

    The new iPhone podcast screen