Of Exhaust Pipes, Tyres And Social Lending

I was lucky enough to be invited to Tuesday night's Financial Services Club talk by Giles Andrews, CEO of Zopa. It was a real treat to hear an update on progress at the 'old firm', especially when Giles showed the unmistakable 'hockey stick' inflection point in the £100m of social lending on Zopa since March '05. Zopa estimates that its members have cornered a 1% share of the personal loan segment of the UK lending market, but with an average default rate of 0.7%.

In an intriguingly fresh take on the social lending phenomenon, Giles explained that savings and loans are in the same class of vulnerable, cosy-little-profit-centre for retail banks that exhaust pipes and tyres once occupied for car dealerships before Kwikfit came along. And just as Kwikfit's focus on price and convenience enabled it to steal an unassailable march on the incumbents in the car servicing market, Giles estimates that in another 5 years Zopa members could easily achieve a 10% share of the personal loan segment of the UK lending market - and people's participation in social lending of all forms could account for half of all UK personal loans.

Given everything else likely to be going on in the retail banking market over the next 5 years, I guess banks could be forgiven for leaving a little more money on the table for the rest of us.

Of course, economically, the reality of social lending is starkly different from the cosy-little-retail-bank-profit-centre represented by traditional savings and loans. Individual lenders and borrowers divide most of the 'spread' between social lending and borrowing rates, not Zopa itself - and certainly not retail banks.

In addition to the economics, Giles believes that transparency is a key driver of Zopa's success. That's not an empty statement, given that members set their own terms and seasoned Zopa members moderate their discussion boards rather than Zopa staff. Zopa also encourages members to use Twitter for informal requests, queries or non-sensitive admin, because it's faster and more accessible, efficient and transparent than email or spending ages holding on the phone or visiting a physical branch.

With these competitive advantages, social lending is definitely here to stay.

Here is Chris Skinner's in depth report on the evening.

That Government Waste Report In Full

Isn't it annoying that the 'news' media 'report' on the results of research, but never provide a link to the source? Well, here's the link to "Efficiency Review by Sir Phillip Green", without any link to media reports. So there.

It's only 33 slides, and I urge every taxpayer to take it in.

My 'takeaways' are that nobody knows enough about how the public sector spends our money to ensure we get real value for it. So we don't even know how much money could be 'saved' by finding out. But Sir Phillip's best guess is that getting a handle on it all will be very worthwhile in terms of policemen, teachers and other essential front-line public services, if not outright spending cuts.

I hope they get on with it. Fast.

Gen Y: Rise of The Pragmatists

On Wednesday I attended the launch of The Faith of Generation Y by Sylvia Collins-Mayo, Bob Mayo and Sally Nash, which the Daily Telegraph responded to on its front page on Monday.

Bob and Sylvie are friends (well of course, but also friends of mine), so this is a bit of a plug.

But in the course of the co-authors' presentation of some key findings, one of many interesting observations struck me in particular. Bob explained that Generation Y people are not so reactive to organised religion as their elders in Generation X, who tended to have had it forced on them as kids. Instead, Gen Y'ers are just as interested to hear what religion is and what it stands for, as any of the other spiritual messages out there. However, they aren't interested in whether the message represents the 'truth' in some dogmatic sense, but pragmatically whether it 'works'. So you will find a Gen Y person chilling out in a church because it is a chilled, spiritual place to be, rather than because he 'believes'.

Bob says this attitude is also encouraged by Gen X people as parents (and teachers?), who tend to be friends with their kids and tolerant or permissive of independence, critical thought and discussion, rather than more authoritarian or controlling as their own parents' generation tended to be.

I suspect this has at least two broad implications for all of our society's public and private institutions. First, while other research shows there has been a decline to low levels of trust in our institutions, this may be driven by and limited to Gen X'ers, as a result of the previous generations' tendency to trust in or tolerate institutions, regardless of how badly they perform. Secondly, Gen Y may be free of the emotionally reactive element of Gen X's attitude to institutions, but very focused on what those institutions stand for - what they promise - and whether those institutions 'work' or perform accordingly.

So if you thought the internet and Web 2.0 marked a revolution in personalisation, you ain't seen nothing yet.

Beer-Belly Revenge 2010

In the course of writing this post, I confess it did strike me as a little weird and obsessive to have derived real satisfaction from carefully planning and executing a successful year-long assault on one's burgeoning girth, only to start again next week.

Am I bored? Terrified of 'old age'? Addicted to endorphins? I pondered the motivation for a few days. Then I thought, f*ck it, I'm having fun.

I said at the end of last season that to arrest a decline I'd have to do "something radical". A "decline" because after 50 weeks of increasingly patchy training for the Rower's Revenge, I'd only achieved the same pace in the dry as I had during a deluge in 2008. Worse (but undeclared at the time), I'd ended the season a little, well, heavier. "Something radical" because I couldn't simply add to my existing target of 6 training hours a week and hope for the best. I'd have to train far more efficiently to make the limited time count. And I didn't want to 'waste' another year doing the wrong thing.

There are plenty of personal trainers, coaching books and web sites out there dedicated to physical fitness, which vary in helpfulness depending on your own strengths, weaknesses, and target events. But I was more interested to learn how other amateurs had converted all the advice into a realistic personalised training programme that worked for them, without all the hype and packaging.

Unfortunately - perhaps understandably - few people take the trouble to publish a neat summary of how they approach the physical side of triathlons. Though there are numerous valuable individual tips on specific aspects of training, events, tactics, kit, diet and technique. See this 19 minute video guide to transition, for example - though please note: while I DO clip my cycling shoes onto the bike, using rubber bands to keep them off the ground until mounting, I DO NOT attach the left shoe to the rear-wheel quick-release lever. The seat-stay is just as conveniently located, yet incapable of releasing the rear wheel onto the road if the rubber band refuses to snap immediately. And see the videos and this discussion of the dreaded "cyclo-cross dismount", which I've not attempted sober and relaxed, let alone drunk on lactic acid in the heat of transition.

So to really burrow into the physical training aspects I had little choice but to buy and study (okay, obsess over) Joe Friel's "The Triathlete's Training Bible".

My old training programme had evolved only slightly from when I first attempted the Rowers Revenge in 2005 after nearly 20 years of not competing very much at all. I loved the idea of row-cycle-run, because I hate swimming training, and did a lot of rowing in the '80s. Despite enjoying my first Revenge, I had to miss it in 2006 and tried an alternative rowing triathlon at Dorney Lake in 2007. But I returned in 2008 and 2009.

To train for 2005, I went from a fairly relaxed 3 sessions a week to a panicky 3 months of 8 or 9 sessions a week (only to 'race' the bike leg on my 3-ton hybrid...). Having established that I could finish and still make it to work on Monday, I borrowed a little from Mark Allen, the 6-time Ironman champion, and developed a year-round, 4-6 sessions-a-week programme that didn't put so much strain on the diary or cause perpetual exhaustion but offered improvement through consistency. In 2007 I made life a bit easier by acquring a sub-£1,000 racing bike with carbon forks and seat-stays, a basic cycling computer, clip-in cycling shoes that have a single velcro strap to aid transition, and a basic heart rate monitor. To spice up the calendar, I added a few shorter duathlons and rowing triathlons with DB Max. These taught me how to resist the overwhelming temptation to blast through the first leg amidst the adrenalin-crazed crowd, so as to avoid a seizure in the final run leg. Transitions gradually improved on average, but were horribly inconsistent.

But, frustratingly, during the '08/'09 season I missed 55 sessions due to various 'niggles', only a few of which were better described as 'hangovers'. I'd also started to dither in transitions - which I put down to a lack of fitness. And I ended the season heavier, as I mentioned.

So I began 2010 with a new, Friel-based programme that provides more opportunity for recovery, but progressively more intensity. It's broken down into 3 four-week 'base' periods, followed by 2 four-week 'build' periods and a final two-week 'peak' period. Repeating that framework after a 'transition' week allows for two 'peak' events a season. Each four-week block involves 3 progressively more intensive weeks, followed by a light week of low-intensity sessions (sometimes missing a run, since that's hardest on the joints). There are 3 endurance and 3 interval sessions each week, except for short, lighter sessions in recovery weeks. I dropped weights, but retained some pilates exercises at the end of 2 or 3 sessions a week to stave off back problems. I also added a mile to my basic 'endurance' run, invested in a GPS heart rate monitor to keep an eye on my running pace as well as heart rate, switched to a spinning bike for the cycling sessions for safety and consistency, and ate less carbs and more protein.

The results?

Well, the recovery weeks definitely removed the niggles and I only missed 7 between January and October 2010, as opposed to 44 during Jan-Oct 2009. I also lost a stone.

Out on the track, I made big improvements in the first 'peak' event - a mid-season Votwo duathlon on the flat Dorney Lake course. I was an average 40 secs/km faster in the two 5km run legs, and 10 secs/km faster over a 20km ride. I was also more clear-headed and a lot less shaky in the transitions, which were faster as a result.

Comparisons for the Revenge itself are rough because it was dry and sunny for last year's Revenge, but wet last Sunday. And they cut the run from 7.1km to 5.5km because of mud and bridge repairs. Disclaimers aside, the 4km row was a fraction slower, leaving more for the bike and run. The bike pace improved only 5 sec/km over last year's time for 23.4km, but the run pace improved a healthy 27 sec/km over last year (slower than the mid-season duathlon, but the Revenge course isn't flat, and it's tougher starting with a 4km row than a 5km run). Again, I was more clear-headed and didn't dither in the transitions. However, my heart rate seemed a bit lower than usual, so maybe I needed to give it a bit more welly - though the finish photo suggests that was not a realistic option and there's a worse one than that ;-)

In competitive terms, the result was 7th out of 52 in the Mens 40-49 category and 37th out of 166 individual competitors overall, versus 11th and 58th last year. Of course that may just mean there were fewer quick competitors this year, having other fish to fry. Or they hate the wet - I was 9th and 49th respectively in the deluge of 2008.

While places don't mean much outside the top 3, it's worth considering the difference just a few minutes can make. For example, if I'd run just a minute faster this year, I'd have been 5th in my age group and 30th overall. Another minute faster on the bike, say, and I'd have been 4th and 27th respectively, and so on. Daydreams like that provide a bit more motivation than beer-belly avoidance, especially when it's dark, very cold, raining heavily or snowing.

Of course, a fresh batch of 40 year olds next year could easily place me 20th in the group. And I'm under no illusions about the natural ability and giant training load required to bridge the 11-minute gulf between me and the fastest guy over 40, or indeed the 5 minute gap to the fastest over-50 year old(!). But I reckon there's still some improvement in pace to be gained from the current training programme... we'll see next year.

Evolution of Contract Law

Enjoyed an invaluable workshop on contract law and drafting this morning, facilitated by Marion Smith, a barrister at 39 Essex Street.

Challenging for 8am on a Thursday, but a very worthwhile 90 minute canter through a factual scenario and the law on pre-contract negotiations, implied terms, entire agreement clauses and rectification by interpretation and for unilateral mistake. There were great notes on these aspects, as well as termination and the ethics of drafting.

Marion's top-tip on where to find open legal discussion about drafting contracts: AdamsDrafting - now on the blog roll.