At CreativityTurf we love innovation when it deals with business model. Errol Damelin has successfully done that, over and over again his business is described as a disruptive player in a crowded market. Errol is the founder of Wonga, the money-lending, short-term loan company.
A couple of months back a friend of mine needed some money urgently, he was out of job, and he had pretty used up all his favours and goodwill, jokingly I suggested Wonga to him, a month after, my friend called me, and I asked how he had sorted himself out, he said Wonga. Funny enough I suggested Wonga to my friend because, just the day before, we were talking about the exorbitant rates of interest the company charged, which was all over the news that week, it was an argument along the lines of Wonga “seizing a business opportunity” and “being a legal loan shark” needless to say this friend argued on the side of the latter.
Errol Damelin could be described as a serial entrepreneur; he had started 2 companies before this. One day he got thinking about consumer credit, and how people were badly provided for. He wanted to make borrowing very simple, and he outlined 3 steps. Firstly, simplicity – the ability to borrow what people want, when they want. Secondly, speed – the transaction needs to happen fast. Thirdly, they want to know exactly and clearly what the loan is going to cost them whether they pay on time, pay early or even miss their deadline. He said initial potential investors saw the short-term, small-loans business as an unprofitable, risky backwater best left to pawnbrokers and loan sharks (there will always be doubters of your business idea), but he is smiling to the bank now.
Mr Damelin says “People have and continue to have cash flow problems around the world… so we’ve mobilised technology to solve the problem.” Wonga has truly revolutionised the UK’s huge consumer credit market. It started in 2006 with the aim of managing people’s cash flow without the need for a long-term credit card dependency. The company now provides short-term cash advances to thousands of customers every month – entirely online and with speed and convenience. The recession and the austerity measure on the part of the government have made them fill an essential void in the lives of many. Wonga simple makes money by charging interest on loans.
Another thing we at CreativityTurf have learnt from Errol Damelin, as an entrepreneur, you have to develop a thick skin. Criticism has come in from every angle, print media, broadcast stations and even a member of parliament launched a campaign against Wonga. This hasn’t deterred them, they believe they are serving a greater good, and are working towards making things better for their customers.