For Oportun's secured personal loans, should we prioritize expanding collateral options to attract more borrowers or focus on streamlining the approval process for faster funding?

Introduction

For Oportun's secured personal loans, we're facing a critical trade-off between expanding collateral options to attract more borrowers or streamlining the approval process for faster funding. This decision will significantly impact our market reach, operational efficiency, and customer satisfaction. I'll analyze this trade-off by examining our product ecosystem, key metrics, and potential experiments to inform our strategy.

Step 1

Clarifying Questions (3 minutes)

• Based on our current market position, I'm thinking expanding collateral options might be a strategic priority. How does this align with our current market share and growth targets?

Why it matters: Helps prioritize solution against business objectives Expected answer: Moderate priority, aiming for 15-20% growth in new borrowers Impact on approach: Would balance expansion with process improvements

• Considering our user demographics, I'm assuming many potential borrowers have non-traditional assets. What percentage of loan applications are currently declined due to insufficient or ineligible collateral?

Why it matters: Quantifies potential impact of expanding collateral options Expected answer: 30-40% of declined applications due to collateral issues Impact on approach: High percentage would strongly favor expanding options

• From a technical standpoint, I'm thinking our current approval process might have bottlenecks. What's our average time from application to funding, and where are the main delays?

Why it matters: Identifies specific areas for streamlining Expected answer: 3-5 day average, with delays in document verification Impact on approach: Would focus on automating specific steps in the process

• Regarding resources, I'm assuming we have separate teams for product development and operations. How are our engineering and operations teams currently allocated between new feature development and process optimization?

Why it matters: Determines feasibility of pursuing both options simultaneously Expected answer: 70% new features, 30% optimization Impact on approach: Might need to reallocate resources for balanced approach

• Looking at our roadmap, I'm thinking this decision might impact our Q4 targets. What's our timeline for implementing significant changes to our loan product, and are there any major dependencies or competing priorities?

Why it matters: Aligns solution with overall product strategy and timelines Expected answer: 3-4 month implementation window, competing with mobile app redesign Impact on approach: Would need to carefully phase implementation to manage resources