During a recent interview for my Podcast, The Fierce Focus Show, I spoke with George Popescu about his newest project, Lending Times, a daily news digest of the peer to peer lending and marketplace lending industry.
In the interview, we talk about how Boston Technologies was created. Then, George gives me an overview of the industry, tells me how he creates good products, explains his vision for Lending Times & the business lines he will create with it, and explains how to read it properly. We also talk about how George focuses on creating companies like Lending Times.
He has wide-ranging interests, he knows how to take an idea, make it into a business, and isn’t afraid to get to detach himself emotionally from an idea on which he has worked hard for years if another idea is yielding more benefits.
We spoke in his Manhattan apartment. He explained how he created Boston Technologies while pursuing a Masters at MIT: during a job in IT at a trading company while being a student at MIT – where he was studying a branch of 3D Printing.
To create Boston Technologies, he leveraged 3 key facts
- The project I’m working on reduces an inefficiency.
- Having the problem solved is not only valuable to my company, but to all companies in this field.
- The software created for the project would also help my vendors other clients.
When he realized he was on to something, he found clients and scaled the idea. He completed each project by milestone, hiring a developer and paying them by milestone while at the same time charging the customer per milestone. He would only have the full amount of money for a short period of time, then 90% would go to the developer. He would keep that margin.
When his Master’s in what we can call “3D printing” was over, he weighed his options, and talked with mentors – Bill Haney of Blu Homes – to decide what to do next. Bill said that the 3D Printing Industry wasn’t ready for primetime – it would take 15-20 years before any good products were made for the public.
So, he took his shiny new Masters, and did something totally different. He focused on growing Boston Technologies into a 100-person company with enough growth to land it on the Inc 5000 list for 4 years straight, and was the #1 fastest growing company in Boston.
That was in his last cycle. Since then, he has created a beer company, an online lender, a venture capital firm, and a lending industry news & analysis publication, Lending times. In his lifetime, he has created 11 companies.
These cycles last for 7 years, during which he starts with 5 or so ideas, widdles the most profitable ideas down to three in 1-2 years.
“I try a few things, usually in parallel. very quickly it is obvious what is going to work and what is not going to work. I stop what isn’t going to work, and keep doing what is going to work.
So ,maybe I start, like, 5 things. 3 months later, I’m down to 2 or 3, if every goes well, a year later I’m down to 1. In this last cycle, I didn’t end up with 1, I ended up with zero.”
“Ending” up with zero means that he exited management of the company with relationships still intact. George is huge on relationships, and working with good people is one of the most important things to him, as is hard work.
Talking about Lending Times
George broke the “Alternative/peer to peer lending/ online lending” industry down for me.
: “These words aren’t equivalent – but on lending Times I’m going to publish an article on the differences soon – big Venn diagram.
Your credit card charges you on average 20% interest. Your savings acct. pays about 1% interest. So, somewhere there is a 19%, something is wrong. This is what the entire business is built on.
People have been building in this space for 10 years now. I started lending on Lending Club and Prosper 2 or 3 years ago. Friends of mine started a hedge fund in this space. I like this space very much – I didn’t know how to get involved. So I stated Backed & I learned a lot. The Co-founders were great. I exited that space in December, but I still wanted to stay involved, so I created Lending Times.
It allows me to know what is going on in the space and be up to date. Through the news I see which companies are doing well, which companies are doing something interesting, then I reach out for interviews. About 4 times/week, I publish a piece/analysis using those interviews. We are heavy on numbers/data/business model & things like that. Marketplace managers and executives are the readerships. Finally, I publish a Sunday edition with all the analysis pieces.”
How does he create a good product?
Working on this podcast, with a day job in sales, I understand the difficulty and importance of getting the right information from the right people. I asked George his method of making sure his analysis and news are correct. The answer was predictable, given how George goes about starting his companies:
“The hard way. There is no easy way: I go to the source. It takes 4 hours every day, between building the website and the tech part, to writing to social media and all of that. For me, lending times – I mentioned I’m in a new cycle – is the way to get to know all the players, collect information, create relationships, get to know what’s going on, see ideas.
I’m not only doing it in the US, I’m interviewing people in Europe, Asia, Australia, so i’m getting to know what’s going on, where, how, and so I’m using this as a stepping stone – it’s going to be a profitable business too – but most importantly I am using it to figure out the next thing I’ll be doing.
Another crucial thing that Lending Times provides: “Relationships”.
There is reciprocal value – that is the best type of business. George calls up companies with a value (knowledge of the industry, a speaker for them to share what their company is doing), and he gets value back (more knowledge of their business, and that business relationship).
“worst case scenario – I get to publish an interesting article about a company. best case scenario – they ask me “hey, do you want to build our US arm?” – which i was asked today by a company I was interviewing. They’re too early, but who knows? In three months, maybe I’ll be doing that? It’s opening opportunities”
Meetups are an extension of Lending Times, and they provide a way to bolster your presence in the industry. At meetups, you can’t be an impostor – only quality is allowed.
“Theres no way to cheat on it – because with meetups, you HAVE to create good content, which takes time and labor. But if you have interesting content you’re attracting interesting people which creates a self-fulfilling circle.”
George has a vision for Lending Times, which extends beyond being an industry news source.
“The most important part, what makes it successful, is that I’m being very focused. If I wanted to write about finance, nobody would read it because it would be “me too!”. Whereas, because I’m writing only about online peer to peer marketplace lending, there about only 5000 people in the world – hopefully, more – who are managers in that space. I only publish (hopefully) relevant news from that industry.
So, the business model behind it is to build readership. Right now it is costing me about $500 per month to do that, plus my time. Then, there would be advertising revenue – but the purpose of that would be to cover editorial costs. So, I’m not making any money.
Other business lines:
The other business lines we’re doing is to put together a database of participants and key numbers on those participants in the industry. So it is about 500 lines and about 60 or so columns.Who they are, what they are, their company mission, their minimum investment, maximum investment, averages, yields etc. All that type of information about those companies. We’re going to sell this to private equity, fixed income funds, and so on.
All of that, we see, by scanning the news every day to publish the daily news digest, so it fits together very well. In addition, through the interviews, I get to meet all these people and I plan to start organizing more formal events. There already are plenty of events. And it’s not about being “me too” either.
Our vision for the event is a TED-like event. 10-12 talks, very quick, 10 minutes, about ideas worth spreading in the alternative/online lending space. By invitation only. Speakers, interesting subjects only, not inviting the same people that I’ve heard at every conference, but inviting the people you don’t see. We are going to be selling tickets for that event to be able to afford the costs. We’re going to do an event in May or June.
This is where George’s idea of sharing the insights of cool companies in the Online Lending space becomes exponentially more valuable for all involved – where serendipitous bumps can happen. George has talked with some really cool companies that he would like to hear more from, and events bringing those participants together can be good for the entire industry. But the event subject isn’t just limited to the Online Lending companies themselves:
“[The subject] could be technology for [online lending] – one of the companies I want to have there would be Lenddo. You’ve probably heard a lot about using social data to evaluate if someone is a good borrower. That doesn’t work. What they did is that that the best data is the meta-data from your emails. So, not what is in the body of the emails, but when you read your emails, how many emails you exchanged, what time of day, with whom, what geographies, how fast you write your emails. That’s the most relevant data – much more relevant than your Facebook or Linkedin. The second relevant data is your Android/iPhone meta-data. What types of apps do you have installed, when do you use it…
They’re using all of this, and they’re able to underwrite borrowers very well. This saves the traditional model of going through credit bureaus. It’s more cost effective, it’s world-wide – you don’t need to only go to countries that have spent decades building credit agencies.
They’re a really cool company. I want them to talk. But, I want them to give numbers, not philosophy. It’ll be a 10-minute talk – and if people in the public like what they’re hearing, ok – exchange business cards and talk elsewhere. And if it’s boring, I don’t want it to be boring for more than 10 minutes.”
Events like this, alongside the distribution list and the newsletter, is where Lending Times is going.
“That will provide enough revenue for people to invest in the company. Lending times is not meant for me to take money out. It is meant to invest in the company, to hire people, to build a good editorial staff, good content, good community, good events, and keep going after that”.
How to read Lending Times:
Take a look at the Lending Times email, below. You’ll notice that there is a column called “Interest”.
Based upon all of the articles George has read, he assigns it an interest level score – what he thinks is most interesting and relevant to the field, get the higher score. George explains that the format is a sort of credit rating for the article:
“To me [it shows] how interesting the article is. For me, a Triple-A article, definitely worth reading. An A is something that, if it is particularly interesting to you may be worth reading, but don’t waste your time.”
Then, we talk about how George focuses:
With all of these things going on, I ask George the common question for the Fierce Focus Show: How does he focus to make progress in his life?
“Two parts. The first part, operationally. I try to be very organized with my calendar and with my email. So, my calendar, I set up time slots where I focus on one thing. If I finish before the time is over – maybe the slot is an hour or half an hour – whatever is left of the hour is reward time. Free time. Maybe I’ll hang out on reddit, etc.
“The most important part is to feel motivated. To feel motivated, you’ve gotta feel like it is yours. I really believe that people care a lot about what they own, and what they build, and I think that drives motivation. If it’s your company, it’s your baby, you work on it, and if you don’t drive it, nobody is going to drive it or do anything about it. That motivates you to move the things forward. Then, it is about making a short term plan and making a long term plan, and understanding what is critical & what is nice to have, narrowing things down.
“What drives me also is curiosity. I’m doing new things fairly often, because I need things to be new to be interesting for me to find it cool and to want to learn about it.
“If i was to do another business in middleware for the currencies market, I’d probably not be so motivated. I’d find it boring, I’ve done it. I learned it. So, I like doing new businesses.
“And [while] they’re all different there are commonalities, too. You can learn a lot in the same field. You don’t have to go from food and beverage to finance. It wasn’t on purpose [that I did that]. The main criteria is who I work with – that’s very important. I’ve learned that the hard way. Second, what I do. But it also has to be interesting and fun too.”
For George, the novelty of learning new things, connecting the dots between those things, and bridging inefficiencies play a large role in what drives George to keep making new ideas happen and creating progress through focus. These are all bound together by a common theme: the relationships he creates along the way.