Navigating Lending Marketplace

The Prime View had the pleasure to interview Jason Simon, VP of Product at LendingTree, the largest online lending marketplace in the US.

Jason, to start off, can you give us a synopsis of who you are and what you are responsible for at LendingTree?

Currently, I’m Vice President of Product at LendingTree. I have been here for about five years. Prior to LendingTree, I ran a product for a startup in the data indexing and analysis space. I also sit on the advisory board of several organizations. 

LendingTree is an online loan and financial services marketplace. We help users compare offers from multiple banks, lenders, and institutions, so they get the best product for them. 

I oversee the growth and success of LendingTree’s logged-in experience; financial wellness product called My LendingTree, and finance as a service platform called Powered by LendingTree.

There is a lack of formal Product Management education. How do you see the learning path for someone who would like to pursue the Product Manager’s role?

It is a good question. To a large degree, product management is very similar to entrepreneurship, and there are some entrepreneur degrees and courses out there. But where you see innovation in product education is in the world of boot camps and online courses.

Ultimately, I think there are two strong paths. One is to get a traditional education in things that are foundational to digital product management. It will be engineering degrees, management information systems, or other business degrees focusing on technology and data. Supplement your education with the many product management resources out there – there are many great books and videos, many of which are free. And I have to mention Y Combinator’s startup school. It is free education from the smartest minds in the startup world, and a lot of it is very specific to product management. Then look for entry-level opportunities at product-focused companies.

The other path may or may not involve traditional education but build something. Maybe it is an actual company, or maybe you are just interested in solving a problem. Maybe you are coding it, or maybe you have joined forces with some other people, and together, you are trying to build something that people find valuable. That journey will teach you a lot about finding product-market fit, which is a core aspect of product management, and it is hard. The best way to learn about something is by spending time doing it and going through all of the struggles and challenges that come with it.

What kind of people do you look to bring to your teams? 

There is certainly a spectrum of skills-based off on the level of PM I’m looking for, but a common denominator for everyone is a strong sense of ownership and the ability to become passionate about the product – to get in it. No matter where you are from a seniority perspective in the product, these two things will help you become successful in the most important activity for a product manager, which is to navigate the product to market fit by iteratively learning what mix of features and capabilities solve the users’ problem and deliver real value. 

More specifically, I am looking for fundamentals on the more junior side – having a bias towards understanding users, their problems, and the product journeys, being good at what I call the product hard skills like story writing, data analysis, funnel optimization, market research, user feedback frameworks.  

It is also important to note that product management is a cross-functional role, so communication and storytelling continue to become more and more important as your role becomes larger. 

At more senior levels, a lot of the needed skills can be classified as leadership skills. Building a vision, bringing clarity and strong justification for the direction you are taking the product, and getting everyone involved and dedicated to achieving the goals set forth. It is also important from a product strategy standpoint to be able to build strong business cases and strategies that align business success with user value. 

Finally, when you get into the more senior roles, you need courage because the pressure for short term decision making may be at odds with the long term success of a product – and it can be very difficult to make the right decisions in those situations.  

Can you compare how the lending market has evolved over the past five years?

Absolutely. I can see more digitization, more institutions moving processes online, non-traditional lenders are coming into the mix. We have also seen new digital entrants focused on winning the consumer with improved user experiences for a specific aspect of financial services. It is an unbundling of what a traditional bank offers. For instance, we have seen this with neobanks coming online like Stash, Chime, and Varo. 

I was also talking with our Chief Economist here at LendingTree, Tendayi Kapfidze, and he had an interesting perspective. A little more specific to the mortgage market – the biggest change is not over the past five years but really since the financial crisis where we have seen lending standards being much more stringent. As a result, the mortgage market is much healthier than it was prior to the crisis and, therefore, better placed to endure shocks.

More recently, the moratoriums that were put in place because of coronavirus are unprecedented in the mortgage market history. It signifies that government intervention is now just a normal part of the mortgage market when it is under stress.

What are the key trends that you think are important to note in your field? 

So, digitization will continue. Acquisitions will probably be an important strategy for larger institutions to participate in that trend. Interestingly, we are seeing that the companies that are doing well are now re-bundling and adding a more diverse set of financial services to their offering but trying to stay focused on building great user experiences.

Continuing from my conversation with Tendayi Kapfidze, for the mortgage industry – going forward, the big story is going to be continued low mortgage rates. It is probably declining from where they are now and remaining low for an extended period of time, which will support demand and inflate prices.

The demographics are also set up well, with the very large millennial generation now in its prime homebuying age. So there’s a strong base of demand, which is supported by low-interest rates. But the challenges would be high prices and income disruption that we’ve seen from the coronavirus, and also the overhang of student debt that many potential homebuyers have.

How does the innovation frontier look like at Lending Tree?

We all know that innovation is tough. At LendingTree, we have developed strong mechanisms to drive both operational excellence of our core business with strong optimization and experience improvements, along with a mechanism to create other engines of growth through investments in innovation and big bets. 

These innovations are happening across many areas of our organization – our insurance team built an in-house agency to support unique and valuable user experiences. Our mortgage team has developed many new loan shopping experiences, and they are testing which experiences work best with which consumers. I am most directly involved with our financial wellness product. 

We have had a lot of success helping users find savings on their existing debts and understand and improve their credit, but we know there is so much more to your personal finances than that. A little over a year ago, we spent a lot of time with users and ran many focus groups, learning a lot and prototyping solutions to a broader financial home. We set in motion a long-term vision and are leaning into. It entails breaking your financial life down into three dimensions, 

1. Your credit – which is largely your past financial performance and often how institutions may view you
2. Your cash flow – which is your current financial performance
3. Your financial future – which, as the name suggests, is how prepared you are for future financial needs and protections

Our credit dimension is already mature, and right now, we are moving into helping users manage their day-to-day cash flow. We are iteratively building capabilities and measuring product-market fit as we go. We are acting very much like a startup, garnering investment from LendingTree with key KPIs and targets to hit. 

I think we are very well-positioned to help users improve their financial lives by driving insights and behavior change, and we’ve been able to focus a lot of energy on this.

I can see you have got many products such as home equity loans, business loans, insurance, reverse mortgages, etc. Being responsible for Product Management, how do you define product strategy and prioritize features? 

LendingTree’s diversity of products is one of our main advantages. For the size of the org we have, we are very agile at investing in the right areas at the right times. We use many the same tools and methodologies that many companies use, like OKRs, but we are different in a number of ways. 

We have strategically organized our product verticals, grouping products together logically. We also have strong collaboration between our general managers and product leads within each segment. This organization and collaboration allow us to identify and prioritize amidst the businesses’ complexity, solving for the consumer and lender needs, and identifying growth opportunities in the market. 

We have also built an intensive but successful quarterly intake process that forces ruthless prioritization, surfaces high-impact resource needs, and provides strong visibility into the initiatives we are taking on as another way to help drive alignment across the company. 

Managing so many diverse products has been a muscle that we have consistently trained, and our operational processes enable growth and success across our entire set of products. 

Stocks of LendingTree are consistently growing YOY, while revenue and market cap of P2P businesses is in stagnation. What do you think is the key driver of LendingTree’s success?

So, we aren’t P2P. We have P2P lenders on the network, along with traditional and non-traditional lenders. I think our growth is a testament to the value of comparison shopping for financial products, especially with these products’ complexity. We are helping users find the right product for them. It is also a testament to our diversification strategy. Case in point, COVID has put a lot of strain on our consumer lending verticals like personal loans and credit cards, but our mortgage and insurance products have done very well during these times. 

Finally, it is our leadership and our people. We are focused on continuing to grow. We have been around for more than 20 years with deep experience across the entire financial services industry. 

This year, two acquisitions shook up the finance marketplace (Morgan Stanley acquired E-Trade and Intuit acquired Credit Karma). How do you think that the consolidation of the market will impact your business growth?

I do not really want to speculate, but there are always new companies that come and go and changes in the market conditions – we have been here for over 20 years and are evolving as the industry evolves – often before.

The advantages that we’ve built over time, our large lender network, diversified product portfolio, consumer and lender focused strategy, and operational excellence are ingredients that have proven to allow us to win in any market condition. 

What are the advantages of refinancing through a third party?

Different lenders price loans differently, even for the same loan to the same borrower. That is why we encourage choice and competition for consumers to shop around. 

Let’s say a borrower is offered two loans on the LendingTree platform – one with an APR of 4% and another with an APR of 3.5% – the spread would be 0.5% or 50 basis points. The wider the index, the more a potential buyer can save by shopping around with multiple lenders. Using our data and given the spread in offered rates, borrowers can save an average of over $40k by choosing the best deal.

Add on top of that the data and insights we can uniquely provide the user to help navigate them to the best loan, and users are getting a better product when they shop with us.

Is LendingTree’s business model recession-proof?

We have been around for over 20 years, meaning we have been through the financial downturns and recessions over those years. We have strong fundamentals, a diversified product mix that provides strength in a variety of conditions, and a team with deep experience across the entire spectrum of financial services. 

How has the COVID 19 crisis impacted the lending marketplace?

It is different for each product, as lenders and consumers are adjusting to new situations. We are seeing record-low rates, which is great for homeowners who want to refinance or for homebuyers.

Like personal loans and credit cards, the products in our consumer segment saw the biggest impact with lenders tightening lending criteria and managing the uncertainty and increased risk. We are starting to see positive signs as lenders come back on the network, but the future is still cloudy.

Jason, thank you for taking the time to speak with The Prime View. Your ability to identify a market need and fill it with a powerful software-driven solution is revolutionizing the lending market.

Stay tuned for the next interviews!