Facebook is a phenomenal success (at growing its network of users) and a miserable failure (at making money). Its attempts to make money have been mired in the Madison Avenue school of selling mass market stuff to consumers. This is fundamentally at odds with the trust-based, peer-to-peer ethos of social networking. If Facebook continues down this path, then the more it monetizes, the more it will drive users away. Luckily, Facebook has been handed a screamingly big and obvious opportunity that meets a massive need, will be welcomed by users, and is suited to the current economic crisis: Uncrunch America.
Uncrunch America
Uncrunch America was recently launched by three pioneers of peer-to-peer lending as a way to get credit flowing again, even if the big banks are not lending. This is an example of pre-competitive cooperation because while the three founders may offer all types of loans individually, with Uncrunch America they specialize in the following:
- Personal Loans. If you have good credit, you can now get a personal loan of up to $25,000 funded by fellow members at a fair interest rate through Lending Club.
- Small-Business Loans. If you own a small business and need more than $25,000, listen up. On Deck Capital has been actively lending to small, healthy storefront businesses throughout the credit crunch.
- Home Loans. For traditional mortgages and social mortgages, Virgin Money has credit-worthy borrowers covered.
Uncrunch America has the imprint of Richard Branson, founder of Virgin. It is a big, bold, and perfectly timed move.
Who Else Supports It?
Uncrunch America is also supported by:
- Credit Karma, which is dedicated to helping consumers better understand the power of their credit by giving them completely free access to their credit score.
- Geezeo.com, a suite of online personal-finance tools, from basics such as building a budget to asking complicated questions of Geezeo’s financial experts.
- ChangeWave Research, a worldwide research network of professionals dedicated to identifying transformational change at the corporate, industry, and macro-economic levels.
Why Not Add Facebook to That List?
Facebook has 200 million users who have come together because they know each other. That is the basis of trust. And lending is based on trust, a simple fact that got obfuscated by Wall Street’s toxic financing vehicles.
Facebook can empower its users in very real ways by connecting them in peer-to-peer financing networks. Facebook does not need to do the heavy lifting of providing peer-to-peer lending — for example, dealing with all the regulatory issues. It just needs to do what it does best: leverage the social graph.
In the process, Facebook can help Uncrunch America. Not only can Mark Zuckerberg become insanely rich, he can feel good about what he is doing for the world.
Global, Not Just US
This is a global credit crunch. It merely originated in the US. Talking to Paul Jozefak of NeuHaus Partners, he mentioned Smava, a peer-to-peer lending service in Germany, as a star in his VC firm’s portfolio.
There is also Zopa in the UK (expanding into Italy, Japan, and the US), and a couple of others have been spotted in China: Qifang and PPDai.
There is now even a site dedicated to tracking peer-to-peer and micro-finance lending globally.
Time to Get Real
Surely the web is more than just a tool to hurl sheep? As college students, the original Facebook users, go out into the coldest job environment in 30 years, with parents less able to help them pay their way, alternative ways to make and save money become important. If Facebook can help with that, then it becomes an important tool for how these students build their lives. Many older Facebook users are already struggling financially.
Facebook has many opportunities to help people use their network to help each other in very real ways. Uncrunch America is just one highly visible way to get started.
