The Web 2.0 Wave vs. LoanBack

Over on VentureBlog this morning, David Hornik has an impressive list of Web 2.0 startups presenting at the “Under The Radar” event next month (at which our own Rael is speaking — he’s the Radar this event is under, of course :). There are a lot of cool companies in David’s list, doing a bunch of cool things. Some of them are really impressive.

I wanted to call attention to another recent startup, though: LoanBack. Jeremy Zawodny introduced me to the founder of LoanBack, Hill Ferguson, last year; and my friend Sam just mentioned to me that his friend Michael Kovacs had joined Hill in launching the company. Their idea is to make it much easier to arrange informal loans — the kind friends or family might give to each other, for instance.

What’s notable about LoanBack, and is so often missing from the many, many, many Web 2.0 startups I see, is that LoanBack started with a need and then found the best technology to meet that need, rather than the other way around. Hill had taken a personal loan from his father, and saw how that whole process could have gone much better for both sides with a little bit of help. Now he’s providing that help to others. I’ve fallen victim to inverting the need => tech reasoning myself, in the past, and I would say from experience that it doesn’t end well. If you are inspired by Web 2.0 and you’re off to start a startup as a result, that’s great; but take a lesson from Hill and Michael, and find an application people really need before you start learning Rails and Ajax. You’ll likely get further and do better, as I hope to see LoanBack do.