Zopa: The Rest of the Story John W. Mullins London Business School © John Mullins 2008

Lessons about Change Drucker: change is the driver Understanding change – and its implications – is what visionaries do It’s not today that matters for the best entrepreneurs – it’s tomorrow © John Mullins 2008

Lessons Learned about Staging the Capital You Raise Is raising £1m better than raising £25m? Raise more money later, on better terms, if things go well If your idea does not work, it’s better to find out sooner – with less cash burned and less time consumed – rather than later Better for your reputation, too! © John Mullins 2008

Lessons about Managing Risk Are entrepreneurs risk takers? Only when necessary! Taking the SHC deal lowered risk. How? Let them go forward and launch Which in turn got crucial data – will lenders and borrowers play? Will regulators let us do business? © John Mullins 2008

Lessons about Discovering Opportunities There are many kinds and sources of data to gather, by many means Rarely does all of it agree How to adapt? Take a view! Then find a way to test your hypotheses as cheaply as possible. Keep losses affordable! © John Mullins 2008

Lessons about How Entrepreneurs Reason Effectual reasoning is a powerful tool Always ask: who, what, whom… Could it lead to profitable growth for Zurich? But not everyone thinks this way Comfort with ambiguity Support from those around you Patience to let the process play out © John Mullins 2008

Lessons about Dreaming Big Dreams The entrepreneurial path is long and difficult Dreaming big dreams is what attracts great people and keeps them on board “Building a place where people trust each other with money” © John Mullins 2008

Zopa’s Progress In July 2009 they made their 10,000th loan At default rates less than 0.1% Had expanded into Italy and the US, Japan too © John Mullins 2008

The Zopa Story: Profitable Growth? Not exactly. For Zopa, profitable growth has not materialized just yet For venture capital investors like Benchmark, most deals don’t pan out For companies like Zurich, that won’t work. © John Mullins 2008

Implications for Encouraging Innovation at Zurich? What can each of you do to ensure that innovation in your industry is not left to entrepreneurs in start-up firms? The time is ripe: will Zurich take the lead? © John Mullins 2008