LC website crashed?

[Fred]

Peak load by design.

Poor design, IMHO.

LC is essentially exposing itself to DDoS attack.  From its customers.

[Fred]

Who else is slowly realizing that this party is over. Or maybe not "slowly realizing." It may be time to take my ping pong ball and go home.

From LC venture capitalist's perspective, this is actually a "good" problem to have; much better than the opposite -- having no visitors to your site.

[rlv99]

From LC venture capitalist's perspective, this is actually a "good" problem to have; much better than the opposite -- having no visitors to your site

No VC wants to see a business interrupted; especially one dependent on internet functionality. 

This "event" highlights the necessity for action on Bryce's thread.

[core]

No VC wants to see a business interrupted; especially one dependent on internet functionality. 

I agree.  Investor demand overloading the servers isn't even close to a good problem when the ratios are what they are.  If potential borrowers turned away because of this then it was that much worse.

And you know what, it wasn't even like there were just a lot of people eager to use the site at that time I'm sure.  It was likely 1% of investors using 99% of the resources.  I won't address whether that's right or wrong, but it certainly says nothing about the popularity or profitability of the company.

[Fred]

From LC venture capitalist's perspective, this is actually a "good" problem to have; much better than the opposite -- having no visitors to your site

No VC wants to see a business interrupted; especially one dependent on internet functionality. 

Of course, nobody wants to have the business interrupted. 

However, if I am a VC investing in 10 companies, I would rather invest more in companies with "problems" of too much demand vs. those with too little demand.

[cfb]

Who else is slowly realizing that this party is over. Or maybe not "slowly realizing." It may be time to take my ping pong ball and go home.

Every investment product has a period between when its launched and most people don't understand it, and when everyone gets it and piles in, at which point the salad days are over.

I can't find decent notes without setting an alarm and rushing in, I still don't get many, and more and more aren't filling.  Unless I start going for $200-300+ chunks (and I'm not going to do that), I can't move enough money to make this worthwhile anymore.  Not going to take a risk of large default % on another economic downturn for <10% return either.

[berniemadeoff]

Peak load by design.

Heheh you got that right.  "Gee, let's set things up so all user activity for a 4 hour period is compressed into 5 seconds.  Seems like it should be easier on our hardware that way."

This is idiotic, right?

[rawraw]

We have grown as investors just like LC will grow as a platform.  Give it a chance guys

[Fred]

Two things that will reduce LC lender's demand, while simultaneously increase borrower's demand:

1. lower the interest rates
2. shift the origination fees from borrowers to lenders

Borrowers will flock to the site, lenders will complain, but equilibrium is in sight.   In theory, equilibrium means more originations, which translates to more revenues to LC.

The current LC demand imbalance is a reflection of its reward imbalance.  Lenders are rewarded at a much higher rate than borrowers.   Lenders can get 6% - 16% more than money-market rates, while borrowers only get 3% - 8% lower than their credit card rates.

[GS]

As I see it, the scheduled posting times are the only thing giving the non-computer-automated investors a chance to get a look at new loans.  When I have some cash to reinvest, I know that if I log on at a certain time, keep hitting "refresh" every two seconds until the loan number jumps up, then I'll hopefully get about 30 seconds to pick a couple of notes.  If notes were posted at random times, it's highly unlikely that I'd ever get a glimpse of a good new note before the computers detected it and gobbled it up. 

[core]

Two things that will reduce LC lender's demand, while simultaneously increase borrower's demand:

1. lower the interest rates
2. shift the origination fees from borrowers to lenders

Good post.  I wouldn't like it if either of these things happened, but the whole post makes sense.   I don't know how the origination fees would work though.

One alternative to adjusting the rates would be to ease up a bit on grilling the borrowers for 15 mins on the phone, asking for bodily fluids, etc.  Yes, that means slightly higher defaults, but the net effect would be similar to lower rates provided you had enough diversification.

[Rob L]

I don't see how going to a 24 hour release schedule would do LC much good. It seems "the need for speed" being what it is would simply lead to a 24 hour pummeling of their servers. Unintended consequences and all that.

[core]

I don't see how going to a 24 hour release schedule would do LC much good. It seems "the need for speed" being what it is would simply lead to a 24 hour pummeling of their servers. Unintended consequences and all that.

Since servers don't "rest up" when load is lower, it cannot do any harm if the load is more constant, even if that constant is somewhat higher than the old way average.  You will get rid of all the humans hammering reload so quickly because essentially they'll just give up and check for notes more leisurely.  You have to buy hardware for peaks and 24hr would flatten them.

I can't speak for others, but when I know the exact time something is going to happen and it's a race, I hit HARD.  Until that event happens.  Mega connection counts, zero delays, all hands on deck.  Whereas if it's a long-running deal it seems more reasonable to check every x seconds.   Odds are I'm competing with far fewer people at any given moment.  I'd rather try to sprint across a freeway when it's not rush hour.