Caladia's Blog

Yesterday was my Prosper anniversary. I joined Prosper on May 31,
2006 and put up my first loan listing on June 1.
https://www.prosper.com/lend/listing.aspx?listingID=17015

It took me another week or so to find the forums.

My Prosper position is unusual in that I'm both a borrower and a lender,
and my impressions of the site in the year I've been here are pretty
well summed up in this post in the Prosper forums:

http://forums.prosper.com/index.php?showtopic=20728

My lending portfolio's performance is dismal.

http://www.lendingstats.com/memberProfile?lenderId=Caladia

Lendingstats has me at a negative estimated ROI; by my own calculations, I'll make about 8 bucks on my
$505 investment. I've learned a lot, from my own lending experiments
and from reading the forums. After a while, I felt like it would make
more sense to pay off my own loan than to keep lending, so I stopped
lending actual money. I felt like I finally had the hang of it,
though, so I kept a hand in by picking loans that I would bid
on if I had the money. See the "Caladia's Picks" thread in the Prosper forums:

http://forums.prosper.com/index.php?showtopic=16962

I also kept my hand in by advising my Sweetie,
whose Prosper screenname is Dianthus. His Lendingstats profile:
http://www.lendingstats.com/memberProfile?lenderId=Dianthus

I handpicked a few loans for him and set up his Standing Order. If you
look at his profile, you'll notice that he put $4000 on my loan at
8.4%. If he had divvied that up among the other loans instead, his ROI
would be over 20%. The loans I picked in the "Caladia's Picks" thread
are all current after 3 months, with an average rate of 17%. I'm a little annoyed at myself for having learned the early,
expensive lessons using real money, and then applying that knowledge
and making profitable picks with virtual money.

Dang-- real losses, imaginary profits. -sigh- At least Dianthus benefitted!

So now I keep looking at my portfolio, and wanting to start bidding again,
just to salvage my pride. But, while my confidence in my ability to
pick good loans has improved, my confidence in Prosper itself has
decreased. They're burning through
their venture capital, and they don't seem to have found a way to
successfully market the site to good borrowers. The ability to attract
good borrowers is especially important when you consider the problems with collections.
These are my biggest worries. I have threads about them in the Prosper
forums:

http://forums.prosper.com/index.php?showtopic=25735 (The Prosper Product)and http://forums.prosper.com/index.php?showtopic=25736 (Of Carrots and Sticks)

Basically,
I just don't know if there's really much demand for the Prosper
Product, and the Prosper Product, unlike other types of loans, carries
with it almost no built-in motivation for repayment. If these two
issues prove to be insurmountable obstacles to Prosper's success, and
the company goes out of business, I think we'll all be kissing our
lending portfolios goodbye. They say they have a plan, but they said
they had a plan for debt sales too, and that turned out to be mostly
wishful thinking.

So here I am, one year in. Started out
asking for a loan to buy a new fence, learned about both borrowing and
lending so I know about both sides of the fence, and wondering about
the future of Prosper; still on the fence.

I'm not on the fence about Prosper itself though-- I still think it's a great concept that has engendered a unique and vibrant community. Thanks, everybody, for making the past year such an enjoyable one.