lending club disrupts the loan industry on its way towards an ipo. ceo, my guest this morning. also, linda wyman talks online learning and where are all the japanese startups? we have reporters john schwartz of "usa today" and tom braden on this week press here." lending club has a business model that at first glance sounds sketchy, now, who would sign up to such a thing? how about the former secretary of the u.s. treasury?

former treasury head larry summers is on board. so is the former head of visa and google purchased a stake in lending club as well giving the young company a valuation of $1.5 billion. now at its heart, lending club is simply a dating service for money. a person in need posts his or her request and you can lend that person cash. you can cover some small part of the loan, as little as $25 or fund the entire thing. nearly $3 million changes hands on lending club every single day. >> co-founder and ceo of lending club came up with the idea when he noticed his credit card charged him 18% interest for debt and bank paid 1% for his

deposits. so i don't think we can start this without explaining how it works. i have some money. i go on and can find a loan i think is interesting and contribute the money, right? >> you diversify your investment -- >> take my money and split it up. >> across fractions of loans. if you make a $10,000 investment, most likely you're going to invest in 400 different loans and take $25 fraction of each -- >> we're all going to ask, how do i know i'm getting my money back, much less the 8 or 9 or 10% interest? >> yeah, so we lending club we underwrite and provide service for the loans. not everybody can post a loan request on lending club. borrowers go through a process

similar to what a bank would do. we collect data on the borrowers including their credit history and incomes and employment and we actually only approve 10% of the loan requests we're getting. it is not the request for boerers who won't get loans but for everyone thinking paying too high interest on a credit card and refinance on better rate. >> my father-in-law, repo man at one point and then loan officer at the bank. he would refer to people who were good pay and bad pay. the question i have and it is reiterating what scott said, how do you collect and maybe you can tell us what the default rate is. >> the most important thing is who gets in. the connectivity, you want to focus on people who have a good faith history and been responsible with credit in the

past and that's why this is -- >> front end stage, you kind of eliminator filter out the risks. >> the reason they are not going to a bank because they get better interest rate on the loan from you. >> because they have a banking relationship and credit cards and access to credit but get a better interest rate from us because we operate at a lower cost than the bank. >> once you're in, what's the default rate? >> on the 3-year loan, we say 3.2% default rate each year on these loans. >> how does that compare to the restest industry? >> it's a bit less than what you see on credit card, between 4 and 5% in general. >> isn't it sort of the industry standard? >> about that the default for loans of that credit quality. >> if somebody doesn't pay are

there -- >> enforcers? >> we do have our own in-house credit team -- >> there are, okay. >> talking about the lending club. >> we work with connection agencies to help us alone. >> is there some sort of legality that you -- are you a bank? what is it that you -- >> you start d this company in an interesting time for a bank. >> we do not connect deposits from the public but we are regulateded in many ways and subject to financial regulations as we should. on the investor side of the program is registered we've yet to see. we file -- we've had a bit of prospect that presents what the securities also investors are buying securities and all subject to prospect filed with

the fcc and reviewed. then on the other side, a number of regulations for fair lending and fair debt collection and also loans issued by a bank. we have issuing banks and partners and issuing banks to borrowers. >> what type of loans do you offer? what are they trying to finance? >> the average loan has been 10 and $15,000 and it's typically designed to pay off an existing debt, an existing credit card, 18% credit card. >> yeah. >> good. do you see expanding into larger loans and when can i get a mortgage through you? >> we do. we've established the validity of the business that it works and we can operate at the lower cost than the banks and provide a better service, most customer friendly service and lower interest rates to borrowers but

establish a mainstream identity and offer credit products, including car loans and mortgages. >> one of the things that seems obvious, if you're paying an average of what on -- to the investor? do you know roughly? >> returns are over time since 2007 have been between 6% and 9%. >> you're paying a nice return. and if the risks are what you say in the 3% default rate, it seems obvious as the lender to lend out money and you may have more lenders than you do borrowers, where the supply chain or supply demand issue is convincing people to come borrow money, at low interest rates. >> yes and no. lending club operates at the marketplace as supply and demand but help us regulate supply and demand at any point in time. last month we issued $173 million in loans. >> you issue a lot of loans but

are you short on one side more than the other? >> not really because the interest rate is the regulator mechanism. when you have too much supply of capital or lower interest rate -- >> and interest rates have gone down. >> based on supply and demand. >> how closely do you make track the base interest rates? >> one economic climate and environment and prediction of default and broader environment of interest rates is into the fix formula but supply and demand on our own platform. >> the ceo and founder and let me point out in the 30 seconds my producer gives me the winner of the trans pack yacht race, right? >> trans pacific yacht race. almost within record time. >> we came two hour shot of the regular -- we recorded a time of

five days and since the beginning of time since 1906 the trans pac has been around, very close. >> fantastic and hat's off to you. thanks for being with us this morning. just as there really is a craig at craigslist, there is a linda at linda.com, the most popular online teacher when "press here" continues.

welcome back. my next guest taught herself how to use a computer in the late 80s and she's a darn good compute ifr. not only did she do the special effects at block busters but taught hundreds of others people to learn how to use the computer, linda.com, a website

familiar with everyone in silicon valley, yeah, boss, i totally any how to run that program. you have saved a lot of jobs over the years. how many customers do you have? >> guilty as charged. approximately 3 million. >> 3 million people, 3 million users, 3 million lessons. >> we like to call them members and we have 100,000 videos much of which we produced ourselves divided into 2,000 courses. >> i've got to ask, you co-founded thd with your husband. was there a conversation for bruce.com. >> we had a website before we started the company and we did try to call it something else. >> what? >> the o high digital art center. everyone called it linda.com and i wrote a book about web design and my publisher said, ask for linda, they just knew your first name. >> they like the idea of

personalized. you have quick study, a gam ut of different things, used to be in special effects -- >> star trek movie. >> i have to ask you about something off camera. forget about -- >> i believe in lifelong learning and people always say, you're self-taught but i think everybody is self-taught. you have to learn -- >> lady who has a website that teaches you things. >> i agree. there's such a thing as great instruction but the honous on learning is on individuals. >> i think it's hard to teach people. especially -- >> challenging. >> you have to have a way with words and simplifying things. >> definitely. and that's something we've learned as we branched into video training that sometimes somebody can be a great writer or be a fantastic person in blogs but when you get them on video, they don't know how to teach. >> sounds look a newspaper -- >> we watched the industry and

know the secret. it is really hard. >> it's not for everyone. for some people it's eegsier. i think it's far easier than writing. i like to write and writing is all about perfecting something and video is about imparting information and doing it quickly and succinctly with the right kind of sensitivity. >> how do you make sure the members are engaged with the content? that's one of the real questions, knowing how people are really soaking up this content? >> our website cost money, it's very inexpensive but people pay to join. and i think when you're growing between 30 and 50% a year over year, that is lit mus to the fact that people like what you're doing. >> and find it easy to use. >> i don't think you're going to pay for something that you don't find valuable. >> do you get stumped by certain questions?

i'm not going to be too negative but why not. >> you're a reporter, why not. >> do you get a fair percentage of questions that you can't answer or refer to someone else? >> about the company? >> like, questions posed -- >> like topics, do you take questions? >> oh, i mean, we have over 100 instructors and they are all experts in their different fields and we do take questions after we've published courses, we have faqs and we get a lot of feedback from our membership and often they are asking a questions, sometimes asking for something we haven't taught yet. >> you took outside funds for first time. your company is crazy old by standards. 1994? right? >> 1995. >> and all of that time you did not take a direct capital. >> correct. >> recently you did. >> we finally were at a size and had initiatives that we could use the funding for. we've been profitable ever since

we started and didn't need it, didn't want to take it to take it, didn't want to lose control. >> what are you using it for? >> we have major initiatives, expansion into international. we bought a company in austria that does training for french and spanish. >> languages? >> languages. >> what do you think of websites like cora, it had a lot of interest and seems to be whithering or struggling. >> i think it's all about curation. if you have the right people answering the questions, it will be a good experience. it's just like school. if you had a great teacher you had a great experience. i think sites that are 100% crowd sourced you get what you pay for and also free, it's really a different level of quality. >> is there -- i'm sorry, you said there were three things. give me the other. >> we're improving our platform and adding extra features and increased our engineering team

and web development team and also increasing the amount of content we're producing and types of content we're producing. >> as you watch the data on the content use, what is incredibly popular. what sort of things man this program the second it came out everybody wanted to know how to do it. i'm getting ios programming? >> it changes all the time. it seems to fluctuate for us between photography, web design and business skills. a lot of people are either looking for jobs or in business and need to understand how to negotiate a contract. >> i would have thought it would be adobe photo shop -- >> i know. >> how many tu torial programs for programming the surface tablet or the blackberry? i mean, this is data that i think blackberry would like to know because if only three people a month are looking at

this -- >> i think there's a lot of way to look at data and big data is popular. at the bottom of the website we have a link that says most popular and updated every day and shows what the most popular courses are and that would actually be interesting to the software manufacturers. >> linda, thank you for being with us this morning. >> thank you. up next, the ceo who slept with all employees and has a perfectly reasonable expansion when press here continues.

this, ladies and gentlemen, is a taco bell on veteran's boulevard in redwood city, california. for three days it was the home to taro, they slept in the parking lot until a taco bell employee asked them to leave. welcome back, i'm scott mcgrew,

his story doesn't stop there. he moved his team to a cheap motel where they were forced to sleep together in the same bed. his company is called any perk and helps more than 2,000 other companies manage employee perks from free massages to cheaper rates at hotels. thank you for joining us this morning. we were talking earlier that you had three years learning english and your english is phenomenal. >> thank you so much. >> i want to double check. i said earlier you slept with your employees, you understand the pun i was playing there, right. suddenly i felt bad. >> okay, good, we're all on the same page. thank you. the level of dedication is absolutely extraordinary. i mean, we have lots of entrepreneurs we interview, none of whom had to sleep in a parking lot. tell me about the taco bell. >> two years ago we came from

japan to start a company. we thought if you come here you can raise money and employee a lot of people, isn't that true? >> look at you now. >> so we didn't know where to go and realized taco bell -- >> i used to live near there and go to that place and i was managing, i had a hard enough time being there for ten minutes. >> it was not open in japan yet so i loved the taco bell. >> everything on the taco bell menu. >> you come to america. do you know what it is what you want create or do you bring your team and figure it out when you get there? >> we had the idea, it was a different idea and we didn't have a product. we were still working on it but we thought better to come earlier than later. >> how did you get programming time? how did you build your product?

>> we had three people today and i was the one who tried to meet a lot of investors. one is an engineer and one is the designer so they are making the product. >> you're working out of the how tell doing this. >> motel and cafe down the street. >> i have a friend from norway trying to stop a company here and get funding and had a hard time. she commutes between there and here. i can only imagine. >> how did you get the visa to stay here if you don't -- you're here on a work visa currently. >> right now, yes. >> how did you get into the country? we're glad you're here. that said, how did you get here? >> one and a half years to get a visa until then i was on tourist visa and i was allowed to do a meeting but not alloweded to work. after i raised money, i'm technically investor here so i can make hiring -- >> i don't want to get overpolitical here, but here's a fellow who says, can i please come to america, how many employees do you have? >> 16.

>> like to employee 15 other people, can i please come in and find money and make this all work? and we're still saying, we'll see. >> you're offering to help the economy. that's maybe one reason why we don't see many as many start-ups, we were talking about japanese start-ups. >> there are only a few. >> why? >> one is visa, hard to come here. and it's harder to start a business compared to start in japanese because you can speak japanese there. >> there are lots of indian start-ups, almost a stereo type. why -- they have a language issue. >> a lot of educated in the u.s. and remain here or good jobs out of -- >> i would say japan has a pretty big market there in terms of making a big company there you can run a huge company there. for india and china, maybe economics not to hire. >> the opportunities in japan

are so high -- >> not too high compared to here but still like enough for them. >> close enough. >> have you been in contact with another entrepreneurs in japan thinking of --? >> it's the best place to start a company but most don't come because it's harder than it looks like. >> could your business be helping japanese start-ups come to the silicon valley? >> i hope so. >> not a terrible idea. >> you want to go on lending club and borrow money. >> i guess back in japan, you must have been written about in the press talked to you about what you've accomplished here. that might actually be an impetus for people to come here and start their own companies. >> i think one of the things they are missing is one successful model, like for baseball, there was ichiro, who did a great job. >> a pioneer. >> they are missing one successful model and i hope to be the one. >> are we really to the point

there is not a single successful -- i'm sure you will be that model, there isn't one? a japanese -- >> there's sony but as far as a real start-up -- >> i can't think of one. >> i didn't say there's no successful -- i didn't say that -- >> but no obvious -- >> one that you can think of. >> i don't know when it's going to come so what i can do -- >> if you do it with russians it's google and korea it's sam sung. >> and over and over and over. >> i was going to ask you, are you guys going to do any work with taco bell as a perk? would they be a business partner? >> i tried it and e-mailed them already and i'm still waiting. >> i got about a minute left. what's the most popular perk? cell phone. >> discounts on cell phones. >> if you're sing att you can

save 15% on the monthly bill. >> what's the cut? we started a company and offer our employees all of these discounts, where do you make money? >> we don't charge anything for transaction or partner, you charge $5 per month. >> come back where you are a gigantic stage. what was the baseball player's name? >> ichiro. >> ichiro of japanese start-ups. thanks for being with us.

welcome, what do you do a gigaown. >> i make sure we're covered on everything. >> you're in charge of gigaown. >> i'm in -- as in charge of

gigaown as anyone who is not -- >> fair enough. you have a busy season. all things going on. >> our europe conference in september and london, the second annual conference in london and featuring a bunch of start-ups and interesting talks on cloud computing. there's a lot of talk from the european angle after the security -- >> particularly, right. >> it's a real issue for the companies so they will deal how to deal with it. september 18th and 19th in london. >> we'll hop on private jets and see you here. >> you can share a private jet, guys, come on. >> that's actually all for this week. find more information about the companies we talked about pretty easy, lending club and lynda.com

and thanks to all three of them. i'm scott mcgrew, thanks for making us part of your sunday morning.

welcome to comunidad dell valley. we celebrate the anniversary, one half hour on your comunidad del valle. ♪ >> celebrating 40 years all across the bay area. we're going to begin with my little girl, the peewee version, they are in this first segment. they are dancing from the region. ♪