Online consumer lending service - debriefing 9 months later

Nine months have passed (or, to be precise, 273 days) from the moment when my friend and I decided to start creating an online lending service . And no matter how we now grumbled at the cruel world, it is worth admitting at once that these 273 days were quite interesting and very instructive for us.

Under the cut, you will find a frank and, I hope, a boring story about how a simple idea travels from birth in one single head to being embodied in a product, in my humble opinion, which has a right to life.

I do not want to write an advertising topic, because I do not know how, and because advertising topics are not interesting to anyone. Although if we had invented some perpetual motion machine or a teleportator, I probably would not hesitate to write that you all just have to buy it or, better yet, give us $ 1M for 3% of the company so that we build a factory for production of these engines / teleporters.
')
But we have not invented ANYTHING. We took an idea as simple as a stone and tried to make it a business. What came out of it, time will tell. We already have a small background, so I will not provide any links and no advertising - the meticulous habrapipl will easily find us everywhere where we managed to trace.

Input data.

The idea of ​​issuing POS-loans online in online stores is simple to the point and from the 1st and from the 121st glance. We have drawn at least a dozen models for the implementation of this idea, and each of them could work. A well-known programmer proverb, often repeated by my colleague, is: “Premature optimization is EVIL!”. In general, after a couple of months of work, it dawned on me that this was not even a programming proverb, but quite a vital one.

Of course, it is necessary to redraw and optimize business models and collect estimates for them. Validation of an idea is, of course, the cornerstone. But with this process it is not necessary to delay. Time is money. And, if you are not financed by the Y-combinator (especially if the Y-combinator finances you), this money should be counted.

And one more small digression about the evaluation of ideas and models. Practice shows that competent people who can give a truly competent assessment of the project and useful recommendations, do this very sparingly and rarely, and sometimes even ask for money for it. At the same time, the network is full of talkers and holivarschiki, who are ready to spend hours with foaming at the mouth to prove something to you or argue with you about what they really do not understand. They take the most time and from them the least good for business.

At TechCrunch Moscow, which took place back in December, I, charging for some courage with a certain amount of alcohol, approached and for no reason at all asked Arkady Moreynis what he thought about the idea of ​​our service. That very evening, the “validation of the idea” stage was relatively well for us.

How it should work (short)

A detailed description of business processes would take no less than a dozen pages, so I will simply list the main points so that everyone, without exception, can understand what this is all about. Those who already understand how the credit service should work in the online store, you can skip this section.

1. Connecting the store to the service
The most problematic is the area where there is the most difficulty.

1.2. Register a store on the service site.
Just enter the store URL and contact e-mail. Verification of real domain ownership is carried out later.

1.3. Conclusion of a contract with our company.
After specifying all the details in the seller’s personal account, you can also upload a ready-made contract, sign it, put a stamp and send it to us in any convenient way. Yes! I almost forgot. Before sending it would be nice to read;)

1.4. Placing a demo version of the service on the store website
At the request of the store owner, the button “Buy on credit” can be placed without concluding an agreement. In this case, only cash loans and, possibly, credit card applications will be available to buyers. True, it seems to me that it will be very few people interested.

1.5. Conclusion of contracts with banks
We'll have to wait until the banks instruct the relevant regional branch to enter into an agreement with the legal entity. the person who owns the store. And wait until the regional branch fulfills this instruction.

1.6. Training an online store employee
Training an employee of an online store is necessary first of all in order to get the right to check the passport details of the buyer. In addition, proper registration of the loan agreement requires some skills. And the store owner must be very interested in the proper paperwork for a loan, because in case of an error, he will not receive his money.

1.7. Placing the full version of the service on the store website
Detailed instructions for installing the “Buy on Credit” button on the store's website are in the seller’s personal account. Or you can simply provide us with a temporary ftp / ssh access to the server where the store is located, and we will do everything ourselves.

2. Buying a loan online

2.1. Product selection

2.2. Information about the loan offer (button "buy on credit")
We draw special banners, offer design options for the button, create a promotional page about buying on credit, and so on. Not to advertise your service on the sites of the store, but to increase the likelihood of purchase.

2.3. Selection of credit parameters.
Our loan calculator allows you to choose a loan product for such parameters as the first installment, monthly payment, loan period. If we have a lot of banks - this thing will be especially useful for the buyer.

2.4. Registration and creation of a personal account of the borrower
Yes, yes - personal data, 152nd law, consent to the transfer of personal data and other unpleasant moments are taking place, but without it anywhere.

2.5. Sending loan applications
Only at this stage, customer data along with information about products and stores are sent to selected banks.

2.6. Getting bank solutions
As a rule, it takes no more than an hour, and sometimes less than a minute. Of course, the automatically obtained scoring system solution is not final.

2.7. Loan confirmation by the borrower
The buyer clicks the “Agree” button one last time and waits for calls first from the bank and then from the store to double-check and confirm everything 25 times.

3. Logistics
Strangely enough, in spite of the fact that at first glance, this is the bottleneck in the whole system, it turned out that there are no pitfalls in the logistics of goods and a contract (Not yet ... tuk-tuk-tuk)

3.1. Receiving a loan agreement
The bank sends the loan documents directly to the online store employee (although we didn’t want to do all this through the seller’s personal account, but the bank doesn’t do it yet, as there are difficulties with the dates).

3.2. Delivery / shipment of the loan agreement and goods
An employee of an online store, courier or freight forwarder at the point of issuance draws up loan documents with the buyer. The one who was trained (or his agent, the responsibility in any case lies only on him).

3.3. Delivery to the bank and verification of the loan agreement
The bank itself can take credit agreements from the online store in accordance with standard procedures from offline, but in order to receive money as quickly as possible, it is better to independently deliver loan documents to the local branch of the bank.

3.4. Transfer of the loan amount to the store account
In the agonizing wait, N days pass, and here they are, the long-awaited money arrives at the online store's checking account. Victory!

Banks and Bankers

So, on paper, everything looks very smooth (in fact, this means that everything will be quite the opposite). We will proceed from the fact that the idea was adopted, the prototype is ready, it remains only to show and tell about the service to those who will use it. In our case, it was

1. Banks issuing consumer loans using the POS technology (Point of sales - that is, loans at the point of sale, which in our case are online stores).

2. Actually, online stores, which the ability to sell on credit promises a 20% increase in sales (according to statistics from offline).

3. And finally, buyers who will be able to buy the same TV on credit, without getting up from the couch (for example, the wife will open the door to the courier)

Our first fight with a cruel and harsh world took place at the reception offices of the central offices of banks, waiting for the right people to meet us. I can not fail to pay tribute to them, oddly enough, among them there were quite a few who very well understand the potential of the online lending market. Their opinion on our own potential is a separate issue, to which we may still return. We can say that the stage “Breaking through the bureaucracy of banks” was relatively easy. Although we still have very few banks (namely, three), we decided that for now this is enough, and, without a shadow of a doubt, we began to work with shops.

Shops and first Fails

In the course of working with stores, the first mistakes began, and after them, the first disappointments. Although it is now obvious that it was impossible to avoid difficulties. In the end, no matter how pathetic it sounds now, we are trying to introduce into e-commerce a complex, innovative product that affects all major business processes. The difficulties were very simple (and, as it seems to us now, quite predictable):

1. The stores themselves were not connected to the service (or rather, they were not actively involved). In this situation, for growth as air needs active sales.
Our actions - we hire sales, create a call-center

2. Moore's laws are not at all humor, but the real truth of life. All that can break is broken. Everywhere, where a mistake can happen, it will happen. In a word, we have done so many shoals that, in the end, we had to redo everything.
Our actions - we hire a tester and a coder, we organize the development process.

3. Heavy offline in the form of contracts with banks, logistics of credit contracts and other difficulties repel shop owners no less than a good price tag for using the service. So free is not a guarantee of good growth.
Our actions - we conclude an agreement with the federal courier service and try to push as much as possible offline on them and on the bank.

4. Marketing such a project takes a lot more money and time than we thought.
No articles in blogs and even on Habré themselves will not disperse the project to the right audience - you need a quality advertising campaign.
Our actions - we sell something not very necessary.

5. By this time we already had competitors - the same services and the banks themselves. Although, on the other hand, this is the 121st time, already at 100%, confirmed the presence of the market and the viability of the business model.
Our actions - we constantly monitor competitors, work out competitive advantages and try to create new ones.

Happy buyers

However, in the spring we connected the first stores. It was necessary to evaluate the reaction of customers. Here we were waited by a pleasant and encouraging surprise: the clickability of the “buy on credit” buttons turned out to be higher than expected. This effect, of course, can be partly explained by the novelty and first interest, but still, based on the few metrics that we managed to collect, we can conclude that the credit service is quite in demand by buyers of online stores (especially when it is literally presented by the store itself). ).

The question of the service on the pages of an online store is a very difficult question for us. On the one hand, it is obvious that the more information about the possibility to buy on credit is contained on the main and internal pages of the store site, the more there will be sales on credit, and the store is interested in it. On the other hand, the more such information on the site, the more the store “advertises” our service, and the store is not interested in it. Of course, this is water for our mill, but the main task that we solve, recommending to place banners on loans, promotional pages and “buy on credit” buttons, is sales growth. Shop owners do not always understand this and see in our recommendations an insidious plan to promote our service at the cost of many thousands of valuable traffic;) Of course, this is not so.

RIF + CIB 2012

To be honest, we had nothing special to do there, except to entertain our self-esteem by participating in the exhibition of the national economy of all Runet. In the Startup Pitch section, we, of course, were in the top five, but this gave us little useful information. Although let's not hide it, it was nice (I remembered our nomination for “killer feature” at the Runet Anti-Prize in 2011). There were some more useful and interesting contacts, there were a lot of good words, about how cool the service should be.

However, we did not manage to meet either Arkady Moreynis or Pavel Cherkashin, although at the Startup Pitch for the top five they promised to meet with them. And I, honestly, just behind this and went. In general, there was some vague feeling left to communicate on RIF - everything was ordered, everything was paid for, everything was divided. Such here we have, it turns out Runet. Well, since it is such, it means this - there is no other after all.

What's next?

As a result, we have a software product, a contractual base and first customers. Looking back over the past months, I can say that I am pleased with what we did and how. There have been and will be many more mistakes in actions and evaluations, but only he who does nothing is not mistaken. We have a lot of plans - having a personal account both with the seller and the buyer gives the opportunity to constantly improve the functionality of the service.

Briefly, for example: we want to fasten the possibility of repaying the loan online, as well as the integration of payment systems, into the customer’s personal account. Cash loans and credit cards will appear in the loan calculator, the service itself will run entirely on the store site, and not in a separate window, as it is now.

Of course, the more we come up with different useful pieces, the higher the value of our product. But our main value should be partners. The very “right” online stores, which, in fact, are our customers (they, not their customers). And in particular those of them that will remain with us when the service becomes paid. And the fact that it will be paid, no doubt. This will happen immediately, as soon as we are sure of the price.

In conclusion, I want to say thank you to everyone who read this text to the end. The text turned out more than expected. I hope that you did not waste your time and found something useful in your history. I, for example, found. Although our story, in fact, is just beginning. There will be much more interesting, because before the “adult” project we still have to grow and grow. Remember how in childhood everyone wants to quickly grow up and become an adult? Oddly enough, surprisingly similar sensations.

PS: Well, I can’t do without lyrical digressions. Seriously I apologize if they ended up with too many)