Market Overview

Exclusive: Interview with Renaud Laplanche, CEO of Lending Club, Part 2

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This is Part 2 of our exclusive interview with Renaud LaPlanche. To see Part 1, go here.

The success of any startup is often its ability to continue to innovate. What products or services are in the works at Lending Club?

Renaud Laplanche: We are working on new products that really expand the kind of services our members can expect from us. As I mentioned earlier, we currently offer personal loans [that] are very consumer-friendly. It's a very responsible way of borrowing; it's not evolving – you're paying off the balance each month.

We're looking at other products that can help our members in different situations. For example, an automobile loan could be the next product we look at. Mortgages could be an option in the future.

So we're really looking at every product that fits the definition of responsible borrowing and can be helpful to our members in different situations.

The financial sector has undergone massive changes as technology has proliferated. As the CEO of Lending Club, you're on the frontline of that change. In what ways do you think the industry will be different 10 years from now?

Renaud Laplanche: We're really hoping to continue to make the industry more consumer-friendly and more transparent. Certainly some regulations [have gone] in the right direction. We believe that Lending Club has a mission to drive not only this kind of regulatory reform but to change the attitude of financial services firms.

What we've done in the last three years, you can go onto the website and download all the loans that have ever been made by Lending Club. You can download the entire data that the company relies on. I think that kind of transparency has really helped increase the level of comfort of investors to the point where we get between $10 and $15 million in new investments each month. That's a large amount provided by investors.

We're giving you the loudspeaker now to break any news, draw attention to anything that's not getting sufficient attention in the media, or really just sound off on any issue you care about.

Renaud Laplanche: Certainly one aspect we have not discussed about Lending Club is liquidity. That's one of the things [investors requested] early on. That's something we've achieved now with a secondary market. It lets investors sell their notes at any point in time before the loan has reached its full maturity. It really transformed the way investors [looked at] Lending Tree, knowing that they can put their notes up for sale at any time.

[We've had] good liquidity [results] so far. It takes an average of five days to sell a note.

Where do you go for your news?

Renaud Laplanche: In terms of mainstream media, I try to get an unbiased view of what's going on. So I force myself to read both the Wall Street Journal and the New York times to get a more balanced view.

What was the highlight and what was the low point of your career thus far?

Renaud Laplanche: I think the highlight really was the launch of Lending Club. It was really the launch and the first few months. We had such a massive early on, and great support from the press. We knew that if early adopters were happy about the service, we would get the mainstream market to follow.

And what was your low point?

Renaud Laplanche: I think there were some unhappy days when I was working as a lawyer at a big New York firm. There were some really unhappy days as well. But I think the late nights at the office when you realize that you're working lots. You're helping clients be more efficient. But you're really not at the forefront of any innovation, or even at the forefront of economic development. And that's what you get as an entrepreneur – creating new products, new markets, and that's what's most enjoyable.

What was the best and what was the worst investment decision that you've ever made?

Renaud Laplanche: That's too easy – best investment is my Lending Club portfolio. This is the only place I've made money over the last three years (since June 2007).

The worst investment decision… I've been wrong about Apple (NASDAQ: AAPL) many times. I shorted the stock a few times, and that really didn't pay off at all. I still think Apple is a good value; I've thought that way for the last three years.