Why Facebook Should Get Behind Uncrunch America
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.
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Kiva is another global micro-lender. We have had about $500 loaned on a rotating basis for about a year.
I don't see the need for Facebook to be involved. It's not serious enough.
I think Facebook needs to change the perception that they are not serious, that they cannot impact the real issues that people face in their lives. If they don't they will go the way of the hula hoop, a fad that fades into history. And of course they can make a difference, they have the audience!
Facebook is a joke site. A real time waster of a service, that in 2 years we won't even waste our breath talking about it. Real life problems need real problem solving services, not a fad site where users log in to see if jenny broke up with johnny.
Uncrunch America seems to be a lead generation site for Lending Club, Virgin Money and On Deck Capital. Any reason why Facebook or consumers should not just deal directly with the lending sites? This post seems more like and ad than anything else...
That is such a brilliant idea! People lending to people as a way to get out of the credit crunch!! Facebook or MySpace have the the critical mass to make it happen. eBay and PayPal should also jump in.
Chris, sorry you did not like the idea. No it is not an ad. We do have occasional Sponsor Posts and they are very clearly labeled as such.
How FB get involved is a totally different question, they can have as many P2P lending partners as they want. My suggestion was simply that they get involved.
This could be a good first step for Facebook to assert its size and influence in a meaningful way. Heck, they could probably even monetize the process so they could feel good about themselves and make a little money. What a novel idea...
I think this is a great idea, but I think it should be entitled "Uncrunch America needs to build a Facebook app".
The idea of Facebook building it seems a little skewed.
For people to write Facebook off as being not serious or a joke site just goes to show how deep some people have their head buried in the sand.
For a site to have 200 million intelligent users prepared to invest a considerable amount of their time in social activity indicates that there is a way to solve some of the more intractable problems of this world.
The fact that the popular media is prepare to give more coverage to a few cynical negative thinkers or "experts" demonstates why their days of glory are in the past.
Goodbye defunct expertise, hello Wisdom of the Crowds.
It seems to be a day for extreme views - people either loving FB and thinking I am bashing or thinking that FB is so silly that I should not even mention them in a serious context. Oh, well, whatever happened to reasonable discourse?
Irrespective of whether or not one likes Uncrunch of FB, it is patently obvious that there is a huge opportunity for P2P lending as a service offering.Ventures like Kiva.com, Nexx.co.nz and TrustArt.org demonstrate that ethical "social lending" can work as a model.
The chief constraints seem to be regulatory environments which is ironic when you think about what the current system has led us to. Good to see RWW tracking this trend.
Thanks for writing a thorough article about how social media can help with personal finance management. I learnt something new and hope to test drive your ideas soon. Awesome article!!
I have been using DesktopBudget.com to manage my personal finances for a few months now. Its the easiest to use free, offline personal finance manager I have seen so far.
@word of mouth mike Who says facebook is full of intelligent people??? Most people I know on facebook are on it to gossip and play dumb games....lets face the truth for once and get YOUR head out of the sand. It is a time waster. Don't start saying nonsense like "uh, duh it helps me communicate"...PLEASE. People need to call it as they see it!
I would say Facebook is full of 200 million sheep.
This is a fantastic idea. P2P lending is a brilliant way to leverage the social graph, and revolutionize the banking industry while at it.
I tend to agree that FB users are in it for entertainment and socialization, not for business.
How about writing a similar article on "Why LinkedIn should get behind Uncrunch America?"