Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Tuesday, June 28, 2005

Social Finance

OK, I think it's time we thought up a name for the rash of p2p finance plays that have sprung up. I've just noticed Ripple, which I think is absolutely brilliant (no kidding).

Ripple inverts the Zopa model, making finance viral - for example, by using viral credit chains. Zopa uses the opposite model: lending/borrowing is one to many, but it's distinctly not viral. If I was Zopa, I would think about the differences in incentives and efficiency between these two models - in short, I think Ripple realizes increasing returns where Zopa realizes adverse selection.

I have long argued that Finance 2.0 is going to be viral (in a sense, finance always has been, but that's another story). Ripple should, IMHO, think about extending their viral model beyond simple credit, and someone (read: Zopa) should think synthesizing the two models, and turning all of this into a nice, user friendly, AJAX rich service.

Perhaps a hotspot to watch for this year - although I don't think the market's ready for it yet. Either way, note the rate of innovation accelerating.

-- umair // 8:41 AM // 0 comments


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