Meet a CEO: We sat down with CEO of SocietyOne, Matt Symons who discusses his career thus far, and why an entrepreneur should be an Olympic hurdler…
TBS: For those who have never heard of peer-to-peer lending, can you explain how everyday Australians could potentially use it as a way to access funds?
Matt Symons: With SocietyOne, borrowers can apply for an unsecured personal loan of between $5,000 and $35,000, from one to five years, for anything from debt consolidation to financing a vehicle. Our loans have no monthly charges, prepayment or early exit fees, so borrowers can clear their debt faster.
Our business model is based on the power of risk-based pricing – a model which rewards borrowers who have a good credit history with a lower rate. We pioneered this model in Australia, because we believe people deserve to be rewarded for doing the right thing and that good borrowers shouldn’t have to pay one-size-fits-all bank rates.
By visiting our website SocietyOne, consumers can access an indicative, personalised rate online in two minutes, based on their credit score. They will know immediately if they qualify for a loan and at what rate (consumers can access their credit score free of charge at GetCreditScore.com.au.
With this information, it’s easy to apply for a loan online in under 10 minutes and to get a response within 24 hours. If approved, the money will be available in as little as 72 hours.
TBS: Alternatively, how can those exact same people also use it as an individual investment tool?
MS: SocietyOne is currently open to sophisticated investors, defined by the Corporations Act 2011 as ‘Wholesale Clients’ with net assets of at least $2.5 million or gross income, for each of the last two financial years, of at least $250,000. We are working towards making the platform available to retail investors later in the year. Investors get exposure to a diversified asset class with attractive returns that haven’t historically been available. Our unique proposition is that we can offer investors access to multiple asset classes, including unsecured personal loans and secured small business loans.
Our investors really like the predictability of getting a regular, monthly income stream from their investments. The cash flow is almost like an annuity with regular principal and interest repayments. They also have the flexibility of withdrawing or reinvesting their returns into more loans. Returns will generally differ for different investors. However, if you had invested in all loans written on our platform across livestock and personal loans since we launched in August 2012, you would have received an annualised return of approximately 10 per cent after management fees and after any loan losses.
Since we started operations, none of our investors have ever lost any capital.
TBS: In terms of consumer response and company culture, what was your experience like working in San Francisco as opposed to launching SocietyOne in Australia?
MS: At Accenture Partner in San Francisco, I had the opportunity to work with some very dedicated, talented and data-driven people. It’s exciting to be able to bring some of the concepts I learned during my time there to the local market, where I see huge potential.
I’ve also been fortunate enough to work with a number of brilliant, forward-thinking individuals in Australia. My SocietyOne co-founder Greg Symons, the architect of our world-class technology platform Clearmatch and our new Chief Marketing Officer Mitchel Harad, previously Vice President of Marketing at Lending Club in San Francisco, the world’s largest online marketplace lender, are just two examples. In my experience, you could take some of Australia’s best startups, including SocietyOne, and move us to Silicon Valley, and we would hold our own. There’s a similar vibe, energy, drive and focus on innovation here. Perhaps the only thing that is really different is the scale of the market.
TBS: What were some of the biggest barriers in the early days for SocietyOne – both in terms of operational and then in customer acquisition?
MS: Our biggest barrier, as the pioneer of marketplace lending in Australia, was raising awareness about this exciting new industry. In a market controlled by four major banks with very deep roots and years of goodwill under their belt – we were bold to start a conversation about an alternative approach to banking – but it has paid off.
It was also challenging to operate in a highly regulated environment, we needed to be careful and strategic. We worked closely with regulators to make sure that we had the adequate systems, protections and legal infrastructure in place.
As we saw increasing interest in SocietyOne, from both borrowers and investors, we needed to scale the business and grow the team’s infrastructure and capabilities across the board. To make this growth possible, we aligned ourselves with the right partners. This helped us to successfully complete a number of financing rounds, setting the stage for future growth.
TBS: What advice would you give an entrepreneur in the data analytics or finance space wanting to launch their own venture locally?
There is no step by step guide to getting a successful business off the ground but, as a serial entrepreneur, I’ve learned you need to:
Be an Olympic hurdler: there will be many challenges to overcome and very complex problems to solve
Have the perseverance of a mountain climber: for every ‘yes’, you will hear ‘no’ a thousand times.
Act like a UN diplomat: you have to learn the art of compromise without forsaking your vision and be willing to forge the right alliances.
Have a fire in your belly: It’s a lot of hard work and you have to be passionate about what you’re doing and why you’re doing. If you don’t have that, it will be difficult to convince others of your ideas.
Embrace change as the only constant: successful ventures go through rapid growth that can generally be chaotic and disruptive. It’s exciting, but not for the faint hearted.
Finally, diagnose the problem: although having a killer product is important, it isn’t everything. First you have to understand your audience and the problem you are trying to solve.
Sometimes you need to adapt, refine and fine-tune the product until you get it right, and it takes talented people to do this.
So having the right team is also crucial.