The Worst Business Model in The World

The actual article follows and is a little hard-to-read as my graduate adviser used to say about my critical papers: "Well, they are a little hard to read!"  But she couldn't point anything wrong with them.  The introduction is however very interesting.  How many times have you come up with great ideas similar to his business models sitting around talking to friends?  And you thought those ideas were wacky.


from by Umair Haque

So there I was, surfing the web, when I came across this awesome little company called Wonga. What does Wonga do? It makes short term loans, like "payday" loans. At a 2689% APR. In case you're interested, that's 66 pounds worth of interest on a 200 pound loan…in just 30 days.

Wow! What a business model. I thought: hey, maybe I can do a little angel investment. But the big guys had already beat me to the punch. Three top venture funds are already investing in Wonga.

What vision! I thought investors were wasting time on stuff like fixing global healthcare and building a better transportation infrastructure. Boy, was I wrong. Investing in 3000% interest rates in the middle of a debt crisis — that's so smart, it hurts.

So I thought up four more awesome businesses for venture and private equity guys to consider.

  • A global marketplace for people to sell their organs. It's like eBay meets ER.
  • A social network for nuclear arms trading. Think Facebook for Mugabe and Musharraf.
  • A community for coyotes to trade tips about people smuggling. My analysis suggests 200% margins in this business.
  • (And this is my personal favorite) I'll hire five guys from my gym. We'll charge local businesses not to intimidate them. You can't lose with this one!!

So I want liquidity preference on the last one, too — OK?

OK. Let's discuss Wonga seriously.

read the article


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