Dot Com 2.0
Zopa - p2p (retail) finance - ie, p2p lending & borrowing for individuals. Killer idea - like an open-access Lloyd's for retail finance.
Things to note:
1) Two very big potential Achilles heels. First, Zopa attempts to diversify lender risk by spreading borrowing across 50 lenders, who then establish a price on the Zopa exchange. This means the rate will be dynamic, but probably not hugely volatile.
The bigger problem is the underlying one: that Zopa's rate is likely to be higher than the market rate even for the same level of risk
, because Zopan lenders still can't competitively scale (even at 50x), because they still simply have less relative resources than, for example, HSBC. A 2k hit to a Zopa lender is much more costly than the same 2k*50 hit to a financial institution. This means Zopa's real target market is finance retail banks won't handle - either microloans or junk loans.
Second is the problem of adverse selection - lemons selecting themselves into the market. This is less of a problem, because I think lenders will intuitively feel this. But this problem could reduce Zopa - which could be really cool - to the equivalent of CheapLoans4U.com, where, sure, you can get a loan to buy a new Porsche even if you're only making 20k a year - but you'll be paying it back at 142% for 30 years. In fact, Zopa's already being spidered by guys like badcreditworld.
Both of these issues are related. They could be addressed by creating incentives for risk-seeking in lenders, and by creating mechanisms to deal with asymmetric info at a very good price/quality ratio (ie Equifax is not going to be a great solution for Zopan lenders, as Zopa probably knows).
2) Open-access, radical innnovation, industry revolution, post capitalism...tick all the boxes.
3) The retail finance industry has really been asking to get deconstructed for almost as long as I can remember.
4) Bad name, guys. Not because it sounds bad (it actually sounds cool), but because ZOPA's an acronym for 'Zone of Possible Agreement' in MBA-land (which is likely where the name came from), and so Googling 'Zopa' reveals much noise and little signal.
5) I think this is the most important: Zopa is only half the paradigm. By this, I mean that the model that's revolutionizing entire industries has two parts. Open-access production/distribution on the supply side, but equally important, some form of sharing on the demand side. That sharing can be explicit (file-sharing) or implicit (links to torrents, playlists, etc). The point is that Zopa is not exploiting demand side effects, which I think could revolutionize it's value prop even further.