Prosper Days 2008 Recap - Part 3

So how is Prosper trying to harness the power of Social Capital these days?

Well, it comes in the form of a composite - a combination of a little of the old and a little of the new, all wrapped up in a nice, little, warm n fuzzy experiment (we only have had the chance to see a sliver of data yet).

As for the old, it's the endorsement feature which was introduced exactly one year ago at Prosper Days 2007. You need not be a member of the same group to make an endorsement. Actually, neither borrower nor endorser need be a member of any group for the endorsement to show up. In fact, one can make an endorsement without even having their identity verified by Prosper. Just simply register and endorse away.

Prosper members that are registered as Lenders can go one step further and place a bid on the endorsed borrower's loan. Prosper is even nice enough to show other lenders how much they bid. (Well, they show the largest bid if multiple bids are made.)

And the second component of this new Social Capital concoction you ask?

Released days prior to Prosper Days 2008, Prosper members can now do some fancy things with the data on endorsements and bids.

First, the performance page now allows filtering by number of verified endorsers* and their bids. Technically, the bids portion of this update appears to be bids by "friends", so one could be a friend and bid yet not leave an endorsement (but one has to be a friend to leave an endorsement).

*also, while any registered member can leave an endorsement, the filter only counts endorsers where the identity has been verified.

Second, now saved searches and standing orders (renamed "Personal Portfolio Plans"), can be set up to filter by these new metrics. For example, a lender can set up a saved search that only finds listings where there are 2 or more endorsements and 2 of more bids by "friends" of the borrower. Pretty nifty stuff.

And the best part is that all this can be accomplished without groups (remember those?).

As a borrower, you can put your Social Capital to work. All that's needed is to get your friends in real life to be registered on Prosper and endorse your listing (tell the world you're not a deadbeat). Better yet, they can even put in a bid on your listing as well to show the world how confident they are that you'll pay up.

Endorsers also have a chance to put their Social Capital to work. By writing an endorsement for their friend and (hopefully) bidding on it, they can play a huge role in getting their friend a loan. If the endorser carries enough Social Capital themselves, there is a good chance their friend is going to get a terrific interest rate (just look at the Malama Ohana group). And if that great endorser does his job, maybe he'll get a little return on his favor, like getting the borrower to cut his grass for a few weeks, who knows...

Meanwhile, other Prosper lenders now have the opportunity to tap into someone else's Social Capital to improve their own performance on Prosper. With the new metrics included in saved searches and Portfolio Plans, it's easy as pie now to find those endorsements. Pretty wild stuff.

So, now that we have these new handy filters for endorsements and bids inside Prosper's performance page, how has it done in the short period since the endorsement feature was released last year?

The results are....well, not as clear as you might think, but they show an awful lot of promise. We'll slice n dice the data in part 4...

Part 4 - Social Capital, the data