How can Investree balance offering higher returns to investors with maintaining sustainable interest rates for borrowers?

Introduction

Balancing higher returns for investors with sustainable interest rates for borrowers is a critical challenge for Investree's peer-to-peer lending platform. This trade-off directly impacts our ability to attract and retain both investors and borrowers, which are the lifeblood of our ecosystem. I'll analyze this problem by examining the key stakeholders, metrics, and potential experiments to find an optimal balance.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about the current market conditions and competitive landscape. Could you provide some insight into how our interest rates and returns compare to other P2P platforms and traditional financial institutions?

Why it matters: Helps understand our positioning and potential for adjustment Expected answer: We're competitive but not leading in either category Impact on approach: Would influence how aggressive we can be with changes

• Business Context: Based on our business model, I assume we take a percentage of the interest as our revenue. Is this correct, and are there any other significant revenue streams we should consider?

Why it matters: Clarifies how changes might impact our bottom line Expected answer: Confirmation of the revenue model and any additional streams Impact on approach: Would help balance investor returns, borrower rates, and company profitability

• User Impact: I'm curious about our user segments. Can you share any information on the split between retail and institutional investors, as well as the types of borrowers we serve?

Why it matters: Different user segments may have varying sensitivities to rate changes Expected answer: Breakdown of investor types and borrower categories Impact on approach: Would allow for more targeted strategies and segmented analysis

• Technical: Considering the potential for dynamic pricing, are our current systems capable of implementing more granular, personalized interest rates based on borrower risk profiles?

Why it matters: Explores technical feasibility of sophisticated solutions Expected answer: Overview of current capabilities and any planned upgrades Impact on approach: Would determine the complexity of solutions we can consider

• Timeline: Is there any particular urgency to address this trade-off, such as upcoming financial targets or competitive pressures?

Why it matters: Helps prioritize and scope the solution Expected answer: Indication of timeline constraints or flexibility Impact on approach: Would influence the pace and scale of proposed changes