Armed with a new national lending capability (note 1), new slogan, "Let's bank on each other," and a window of opportunity to gain ground on the competition (note 2), person-to-person lending pioneer Prosper is preparing new marketing initiatives which includes television and radio advertising. Prosper said in its blog Monday that the ads will begin test runs this week. 

The two television spots feature short vignettes of real lenders and borrowers (see screenshot below). Prosper has also posted brief "behind the scenes" videos of the borrower and lender meeting while giving gushing testimonials about the service.

There is also a series of seven 30-second radio spots:

• Meet the lender/borrower spots featuring same pairs as the TV ads (2 ads)
• A young student borrowing from Prosper
• A small business person borrowing from Prosper
• A youngish woman borrowing from Prosper for debt consolidation
• A man borrowing from Prosper for home improvement
• A man borrowing from Prosper for a car loan

Preview the ads here (note 3).

Analysis
It will interesting to see how the advertising is received. From a branding perspective, I think they are extremely effective, doing a good job communicating the benefits to both borrowers and lenders. And Prosper positions itself as a smart bank alternative without getting overly negative (eg. Lending Tree's $100-million "When banks compete" campaign in the late 1990s) or going so over the top (think WaMu) that you can't recall who made the ad (see previous coverage here). 

One thing I'm sure of: Prosper did a great job showcasing the ads on their website, including the very Web 2.0 touch of posting "behind the scenes" videos of the TV commercials. 

Notes:

1. Prosper recently changed its process so all loans are originated by Utah industrial bank WebBank, then resold to the winner Prosper bidders. The TV ad above even carries the fine print that, "Prosper lenders are loan purchasers."

2. Prosper's primary competitor, LendingClub, is currently operating at limited capacity as it seeks additional licensing/authority from regulatory bodies (coverage here). It too, uses WebBank to originate all loans made through its platform. The latest entrant, Loanio, debuted its services at our April 29 Finovate Startup conference, but is still a few weeks away from a launch. A number of other P2P startups are in various stages of development with launches expected within the next 12 to 18 months. 

3. For more information on the P2P lending market see our Online Banking Report: Person-to-person Lending 2.0 

Last week's post on P2P lending traffic prompted several comments on how worthless website traffic is as a metric, especially when the two major players make their loan-production numbers public. With that in mind, I present the Q1 total loan production for Lending Club and Prosper.

While Prosper still had twice the overall loan volume of Lending Club in Q1 ($21 vs. $10 million), Lending Club is closing the gap in the prime/near-prime market (FICO 640+) originating two-thirds the volume of Prosper in March ($4 vs. $6 million). But if you take into account Lending Club's more stringent debt-to-income requirements (max 30%), the newcomer actually surpassed Prosper in these lower-risk loans ($4.1 vs. $3.7 million in March).  

While the two-horse race is an interesting sidelight, the more important statistic is industry growth. In Q1, Prosper and Lending Club combined for more than $30 million in originations, up $10.7 million (55%) compared to about $20 million in Q1 2007. Only $3.4 million of the Q1 total (17%) was subprime, compared to $7.0 million (36%) a year ago.

Loan originations doubled in the prime/near prime (Prosper grades AA to C and all of Lending Club) ending the quarter at just under $27 million.

Why so much attention to a tiny sliver of the $2.5 trillion U.S. consumer loan market? It's new. It's different. It's social. And it's an experiment in online finance we get to watch in real time thanks to the transparency of the lenders. For more info on the market, see our recent Online Banking Report on P2P lending.

Q1 2008 Loan Volume: Prosper vs. Lending Club
in $ millions (U.S. only)

Source: Online Banking Report compilation of company data, 2 April 2008
*Loans made to Prosper grade AA through C borrowers (FICO 640+)
**Loans made to Prosper grade AA through C borrowers with debt-to-income (DTI) less than 30% 
***Lending Club only makes loans primarily to the "prime/low DTI" segment (FICO 640+, DTI <30%)

Note:
1. These prime/near prime/subprime distinctions can help financial institutions compare their prices to the marketplace rates.

Looking at February's Compete data, estimated traffic (see comment 3) at the three major U.S. person-to-person lenders grew by approximately 100,000 unique users compared to January, a 16% gain. Prosper still dominates the category with nearly 10 times as many unique visitors as its nearest rival, Lending Club. 

Update: In terms of funded loans, Prosper had double the volume of Lending Club in February: $6.0 million vs. $2.9 million. In January, the volume was $7.2 million vs. $2.8 million.  

Source: Compete.com, estimated unique site visitors during Feb. 2008                                         *Not launched

Here are three updates I've added to the posts from the last week:

• Credit Karma, which we discussed here last week, is in private beta. But they have agreed to give NetBanker readers the invitation code to come in and kick the tires: CKFRND. Let us know what you think.
  
• Prosper, discussed here yesterday, was named one of the Fast 50 2008, the 50 most innovative companies in the world by Fast Company magazine (here). The list is in the March issue. 
  
• GlobeFunder: I finally caught up with GlobeFunder founder Ben Decio last week. I noted in my NetBanker post a few weeks ago that the company was not yet accepting money from individual lenders. It sounds like that may be permanent. The company's current business plan is to use money from institutional lenders to fund all loan requests. That doesn't alter the value proposition to borrowers, since money is money, but it does move the company out of the P2P lending space. 

This morning I was at the Parc55 Hotel in San Francisco to hear Prosper CEO Chris Larsen's "state of the union" address at his company's annual user meeting, Prosper Days. I've heard him speak four times in the past year, and I learn something important every time (see note 1).

The highlight today was an analysis he unveiled showing the performance of loans made to borrowers who've been endorsed by friends and family. About a year ago, Prosper added an important social networking feature that allows friends and family of potential borrowers to post endorsements. Even more important, Prosper shows whether the friend has put their money where their mouth is and made a bid on the loan (see screenshot below; note green number in upper right showing the amount of the bid made by the endorsing friend).

Analysis
The theory is that the social endorsement(s) will have two important benefits:

• Help lenders identify quality borrowers 
• Provide borrowers with more incentive to repay the loan so as not to disappoint their endorsing friends

The first year's worth of data are in and the results are promising. The loans with higher social capital (i.e. endorsed by and bid on by friends) are performing significantly better so far:

• Loans with a single friend bidding on the loan are performing 35% better than similar loans without that endorsement
• Loans with multiple friends bidding are performing 50% better

Because Prosper makes its loan performance data public, investors will be able to track the value of these endorsements over time. If it turns out that endorsements do correlate with better long-term loan performance, loan rates will be bid down accordingly, and the borrower will capture the value of their social capital/reputation through lower loan rates. Already, the rates to these endorsed borrowers are running 10% lower. 

Lenders can even search on these so-called "social elements." Prosper's advanced search includes 43 searchable fields, four in the social area (see screenshot below).

Note:

1. Prosper will be demo'ing their latest platform improvements at our upcoming FINOVATE Startup conference (previous coverage here).

2. For more information on Prosper and person-to-person lending, see our Online Banking Report, published in December.

Last week’s Net.Finance conference entitled Online Innovations in Financial Services Marketing brought thought leaders together in New York to examine trends and breakthroughs in the world of banking.

For me, there was one clear take away: The new social tools that allow people to connect with each other online are ushering in a new economy.

We are moving into a social economy, where collaboration and participation between and among consumers will sway their choices more than marketing messages do. Those companies that enable social participation, add value to people’s lives and create authentic experiences for their customers will lead in this new economy. There were other topics discussed, but this theme kept creeping into the presentations and conversations in a way I had never before encountered. I’m going to narrow in on this one theme, which ran throughout the two days of the conference, and I apologize to those companies and speakers I’m not highlighting here.

Jurie Pieterse – ING Direct
Jurie outlined several of the key ways that ING is handling the power of its marketing and messaging to consumers by opening up its brand to customer participation. It is clear from ING’s early experimentation that it has a brand with strong emotional appeal and resonance. The bank opens the doors to people who engage with the brand to create photos, videos and prose about how their relationship with ING helps them manage their money.

Jurie explained that when they delivered the prizes in their user-generated content contests, which ranged from $1,000 to $15,000, most winners said that they entered the contests more from a sense of fun and participation than for the money. After this initial experimenting, ING will begin to examine the data to determine if these contest entrants are more loyal and profitable than less engaged customers. I would bet my Electric Orange account they are.

Chris Larsen – Prosper
It is fascinating to watch Prosper evolve their model. Chris spoke at length about the importance of social capital to improving its default rates. The idea is that people who have peer pressure built into their borrowing habits will pay back at a better rate than they do to traditional financial institutions.

Prosper has found that people who receive at least one of bid from friends or family have significantly lower default rates than those who only borrow from strangers. By leveraging this social capital, the entire community acts more honestly, even if lending to friends and family is a small part of the overall equation.

Jason Knight – Wesabe
Jason sees Wesabe as a community of interest focused on money. By allowing members to tag their financial transactions and share whatever information they choose with the greater community, they create a collective intelligence I find very exciting. I see them as the long tail of financial advice. People discuss better ways to use their money, from smarter investing habits to buying better cuts of meat. All of this collective intelligence fuels a social economy where people rule their situation by having a much healthier relationship to the way they spend their money.

Shari Storm – Verity Credit Union
Shari oversaw the creation of the first “bank” blog, which Verity started in 2004. She has strong information and advice to other FIs considering jumping into the world of blogging. It is clear that the blog is an excellent way to humanize the company and engage with their community in an honest and transparent way.

Thomas A. Desmond – TradeKing
I was blown away by TradeKing, a company I had not heard of before. Their marriage of social tools inseparable from their trading platform is perhaps the very best example of social media being used strategically by a company that I have seen.

They have baked community aspects into everything that happens on their site, so, if traders opt in to the community, they can learn from each other based on their actual trading results (similar to Zecco.com, below)

Asheesh Advani – Virgin Money
It took me a minute to wrap my head around Virgin Money’s model, but once I got it, I was hooked. Many people who buy houses get side loans from friends and family to make a bigger downpayment. Same with student loans, or with unsecured personal or business loans. Virgin creates a model around this kind of lending, so both sides can take advantage of the tax benefits available via a documented lending relationship. It creates excellent flexibility, because if a borrower needs to skip payments, the lender can adjust the loan accordingly. The loan can always be turned into a gift at a later date. This takes a part of the social economy which was underground and unseen, and brings it above board, recognizing it as an important part of the overall economy.

Gabriel Dalporto – Zecco.com
Zecco and TradeKing's models have many similarities (one exception being that Zecco offers 10 free trades each month). Community features are built right into the tools making it easy to track individual investors within the community. That allows the higher performers to gain a following and for newcomers to learn from the veterans. Like TradeKing, Zecco allows community menbers to see the actual trading results and portfolio holding of members (that have opted in), adding an enormous amount of credibilty to discussions about individual stocks and trading strategies.

Summary
It feels more and more to me that we’re at a turning point. I admit that these innovations are small, just barely bubbling up to the surface. But I believe these examples of companies quietly tapping into unmet needs provide a model of the future.

Anyone working at a financial institution who wants to understand the potential opportunities and threats coming our way should watch these companies and understand their models. If my experience is any indication, the social economy will begin to trickle into your FI's strategies and executive discussions and those who best understand these concepts can help inform, influence and shape the outcome.

William Azaroff is the Interactive Marketing & Channel Manager at Vancity where he develops interactive marketing initiatives, and pioneered ChangeEverything.ca, the groundbreaking change-themed online community. William builds on a decade of experience at digital agencies in Vancouver, Seattle and Los Angeles driving strategy, extending brands to the Web and building relationships for companies in several verticals, including Honda, Disney, Intuit Canada and the Government of BC. He discusses trends and noteworthy achievements in social media at his blog: azaroff.com/blog.

As noted in our recent research report on the P2P lending market (here), the exchanges need to boost revenues to remain viable. Even with scale, a 1% borrower fee and 1% servicing fee just don't provide enough revenue with the relatively small loan sizes currently being funded.

For example, using Prosper's previous pricing on a typical $7,000 loan, about $130 would be earned in the first year, then another $50 for the remaining two years of the loan (see note 1), for a maximum of $230 in lifetime revenues per loan.

So until loan sizes increase dramatically as secured notes become more common, Prosper has raised its prices for the core portion of its loan demand, the alt-prime and subprime portion. The company left its superprime, class AA price alone because it competes with banks and credit unions for this type of borrower.  

As you can see from the table below, most loan-origination fees increased by 1 point, although C and D loans were increased 2 points. Looking at the company's mix of business during the first half of 2007, the new pricing would have doubled its loan-origination revenue from about $500,000 to just over $1 million. The weighted average fee under the prior pricing was 1.2%, compared to 2.4% under the new formula.

Here's the new price plan effective Jan 4, 2008, as announced in the Prosper blog (here):

Type   New Price   Previous  Change  Avg Loan*  Avg Loan Fee* 
Prime  
  AA           1%               1%             none             $9,000            $90
  A             2%               1%            +1 point         $10,300         $210
Near Prime
  B             2%                1%           +1 point         $9,800          $200
  C             3%                1%           +2 points       $8,400           $250
  D             3%                1%           +2 points       $6,500           $195
Sub-prime
  E             3%                2%            +1 point        $4,500          $135
  HR           3%                2%            +1 point        $3,000           $90

Weighted
  Average*** 2.4%          1.2%

*Average loan size during the first half of 2007 per company
**Loan-origination fee deducted from proceeds of loan; there is no fee if the loan does not get funded
***Using the loan mix from the first half of 2007

Note:
1. It depends how the servicing fee is calculated. At Prosper, it's calculated on the outstanding loan balance which for a $7,000 loan averages approximately $6,000 in year 1, $3,750 in year 2 and $1,250 in year 3.

Four online finance companies are finalists in the Crunchies, an awards program sponsored by three major tech blogs: TechCrunch, GigaOM, Read/WriteWeb, and VentureBeat.

• Mint is one of five finalists in Most Likely to Succeed (here)
• Prosper is one of five in Best (new) Business Model (here)
• Zillow is one of five in the Best Consumer Startup (here) and Best Overall (here)
• Kiva is one of five in Most Likely to Make the World a Better Place (here)

Winners will be determined by a tally of votes at the site between Dec. 21 and Jan 10.

For much of the past four or five weeks I've been researching and testing person-to-person lending sites. I've become a lender and have gone through the borrowing process at all three major U.S. P2P lending exchanges: Prosper, Zopa, and Lending Club. Plus I set up friends and family with loans at Virgin Money USA and LoanBack.

It was all part of the research process for the latest Online Banking Report entitled, Person-to-Person Lending 2.0: Disruptive service or market niche? That report is now available at our main website (here).*  

I had originally intended on publishing it in early December. But as I was trying to wrap things up, Zopa launched its new U.S unit. So I stopped the presses and added an analysis of its unique model. Then as I was finishing that, Lending Club made a significant change last week, becoming a national lender instead of state-sanctioned one. That too is now in the report. 

Here's a summary of the major fourth quarter activity in the person-to-person lending sector:

• Oct. 2: Prosper overhauled a number of its lending tools, which were announced at our FINOVATE conference Oct. 2 (video here) 
• Oct. 6: Virgin Money (formerly CircleLending) launched its revamped friends-and-family service with a splashy debut in Boston with Virgin founder Richard Branson leading the parade (coverage here)
• Dec. 3: Zopa launched its U.S. version, an entirely new way of looking at the P2P space (coverage here)
• Dec. 13: Lending Club went national in a unique partnership with WebBank

________________________________________________

*Subscribers may download the report free of charge.
Others may purchase it as an individual report.

Prosper is one of the few (only???) national retail financial services companies that holds a users conference. The second annual Prosper Days is scheduled for Feb. 25/26 in San Francisco (more info here) and costs $55 in advance or $75 after Jan. 31. This year, they've added a famous keynoter, Freakonomics co-author Stephen Dubner. I will also be on stage later as part of a panel discussion of bloggers covering the space.

The conference is an excellent idea, creating a buzz around the company and providing a platform for its most loyal customers to share success stories and network. It's a model eBay has used successfully for years. The addition of Dubner should increase press coverage and attendance.  

I'm also impressed at how Prosper reuses the content created for the conference. The sessions are recorded and posted to its website to help educate borrowers and lenders. A total of ten videos are available here (see screenshot below).

Following is a press release we just sent out over the wires. While these three companies received the highest ratings across the 117 ballots, ratings were relatively high across the board, averaging 5.02 on a 7-point scale. Eight other companies received scores within 10% (e.g., 0.5 points) of the lowest-winning score and thirteen companies were within 20% (1 point).
_______________________________________________________________________________

Oct. 5, 2007
For immediate release:

NEW YORK—(BUSINESS WIRE)—On Tuesday, attendees at the FINOVATE 2007 conference voted on their favorite financial product or service from among the 20 innovations presented. Overall, the DEMOs were extremely well received with an average score of just over 5 points on a 7-point scale. The three winners (in alphabetical order):

• Mint: A new online personal finance company launched
  two weeks ago (previous coverage here)
  
• Mortgagebot’s Mortgage Marvel: A new mortgage marketplace launched Oct. 2 at FINOVATE 2007 (previous coverage here)
  
• Prosper: The first U.S. person-to-person lender,
  launched in Feb. 2006 (previous coverage here)

About the Voting
One “Best of Show” ballot was issued to all 230 registered attendees. Representatives from the presenting companies were not eligible to vote. Each of the 20 DEMOs was rated on a 7-point scale with the three highest receiving “FINOVATE Best of Show” awards. About two-thirds of eligible attendees voted.

About the FINOVATE Conference
The FINOVATE conference is the first demo-based conference for the financial, banking and lending technology industries. Held annually in New York City, the conference offers a chance to explore the future of finance in a fast-paced, intimate and unique way. FINOVATE is organized by Online Financial Innovations. For more information, please visit www.finovate.com.

About Online Financial Innovations
Founded in 1995 by former banker Jim Bruene, Online Financial Innovations is a Seattle-based research company. OFI is best known for publishing the Online Banking Report, a regular newsletter featuring in-depth analysis, relevant data, and informed recommendations to financial services executives in 50 countries. For more information and free sample reports, visit Online Banking Report, email info@netbanker.com or call (206) 517-5021. You may also find OFI’s blog on the latest in online finance & banking at NetBanker.com,

Contacts
Online Financial Innovations
Jim Bruene, 206-517-5021
info@netbanker.com

As we enter the final week of summer, we will begin showcasing the companies that will be DEMOing new products and services at our inaugural conference FINOVATE 2007. See here for the complete lineup.

Person-to-person lending
P2P lending has grabbed headlines around the world since it launched in the the United Kingdom in March 2005 by Zopa. We are pleased to have on the FINOVATE agenda the two leading U.S. providers: Prosper, the brain-child of E-Loan founder Chris Larsen, and Lending Club, which launched its exchange on the Facebook platform just three months ago.

Both companies received significant cash infusions this summer and we're looking forward to seeing what enhancements the lenders will showcase at FINOVATE 2007.

Lending Club received a significant $10.3 million first round last week (blog entry here). Since the company's launch of Facebook three months ago today, it has closed 134 loans averaging approximately $5,600 for a total of $750,000 in originations.   

In June, Prosper, the winner of an OBR Best of the Web award last year (note 1), secured a $20 million third round bringing total funding to $40 million (previous post here). The company now has more than 380,000 members and has funded nearly 14,000 loans totally $80 million. Since inception, Prosper has posted more than 168,000 loan listings from more than 75,000 borrowers.  

Mortgage lending
Here's a bit of trivia for Monday afternoon (or Tuesday morning if you read NetBanker via email): What was the first profitable banking website? And no, this is not a trick question with the answer being "none" or "no one knows" (see note 1).

The answer: Bank of America in 1994, or at least that's what an exec told the audience at the first conference on Internet banking held in the summer of 1995. Practically before anyone outside of academia or Silicon Valley had heard of the Web, BofA was using it to produce mortgage leads in the lucrative California market. I can clearly remember the woman who ran BofA's website saying, "mortgage leads are already more than covering the bank's costs (of its website)." Of course, that was in the days when a website cost less than a couple billboards.   

We've been writing about online mortgage lending since that first 1995 conference. One of our favorite lending platforms, winner of the second mortgage-related OBR Best of the Web award in 2001, is MortgageBot. The company was also named to last year's INC 500 list of the nation's fastest growing private companies producing a 560% revenue increase during the YE 2002 through YE 2005 period. 

At FINOVATE 2007, MortgageBot will take the stage to show a radical new approach to mortgage shopping that its been testing for some time now. We can't release the details yet, but we were luck enough to get a sneak peek on Friday and were very impressed!

Note:

1. Our sister publication, Online Banking Report (OBR), typically names 6 or 7 companies as "Best of the Web" during the course of each year. It is earned by launching a product or service that significantly "raises the bar" in online delivery of retail banking and lending products.

Two potentially disruptive startups, Prosper, the leader in U.S. P2P lending and Wesabe, the first-mover in social personal finance, both announced new funding rounds today:

• Prosper took in $20 million, bringing total funding to $40 million (previous coverage here)
• Wesabe added $4 million to its bank account, bringing its funding to $4.7 million (previous coverage here)

These are sizable bets on on niche markets that haven't thrown out a lot of revenues so far. But whether they succeed or not, the money will certainly fund additional innovations that will be educational for those in the banking industry. 

Case in point: Wesabe launched an app on the Facebook platform, becoming the first personal finance company to do so (screenshot below). So far it's a simple front door to their group discussions, but with more development resources, it could become a full-fledged "bank" running within the Facebook community.

For more information on Wesabe refer to our latest Online Banking Report, Social Personal Finance (here).     

When researching my earlier post, 10 Ways for Banks to Leverage Apple iPhone Hysteria, I happened to search for "iphone loans" at Google (see results below). Not really expecting to find anything, I was shocked to see the first result pointing me to a recent loan listing at Prosper (see inset, full listing here).

Unless this is a stealth PR ploy from Apple (doubtful), the enterprising NY waitress who posted this Prosper loan request, is riding the iPhone wave to nail down decent terms on a $1,000 loan, which she says will be used to buy the phone.

Julestar01, who by the way has a great future in marketing ahead of her, used the eye-catching graphic above along with the killer title, iMoney for the iPhone. After being highly recommended by the leader of her Prosper Apple User Group, including his/her first bid for the full grand at 13.20%, the loan is now fully funded at 12.55% with more than seven days remaining. It has already attracting 20 bidders causing the rate to fall 20 basis points even as I wrote this post. I'm sure there will be many copy-cat requests after the success of this one.  

It does provide another way for a bank to leverage the iPhone hype: jump in and fund this loan, then you can say you are the first bank to make an iPhone loan.

Another fascinating observation, and the real reason for this post: Prosper, not Apple, or AT&T, or even Citibank, has the number one organic link on Google for "iPhone loans" at absolutely zero cost. That's the first-mover advantage at work.

Page 1 Google search results for "iphone loans"
(10:00 AM PDT, 7 June, 2007, from Seattle IP)  

Just as we are putting the finishing touches on our latest Online Banking Report, which looks at the intersection of personal finance and social networks, a new person-to-person lender launches. And how do they plan to gain traction? Through tight integration with Facebook, the second-largest social network. So we are holding the presses, and adding this important new development to our upcoming report.

We'll have much more on it later, but if you are curious now, login to Facebook and check out Lending Club (the easiest way is to login via the link at the top of the Lending Club homepage). Or read Colin Henderson's great analysis here.  

Last year, Facebook developers created a proof-of-concept personal finance app, originally called Facebank, then changed to MoochSpot (see previous coverage here). That effort was designed to show how third parties could leverage the Facebook API to create new services. It didn't take long for someone to take the bait. Within a few weeks, BillMonk created an interface to Facebook to support their expensing tracking service, now owned by Obopay. Buxfer also supports login via Facebook's username/password (post here), but does not link into the social network as yet.

But Lending Club is the first to leverage the Facebook interface to support actual financial transactions, in this case lending/borrowing. The company is modeled after Prosper. Lending Club timed its launch to coincide with the Facebook developer's meeting and launch of Facebook Platform.

We'll be testing it during the next few days and will report back on whether its a challenge to mainstream lending, or merely blog fodder. Given the rising power of social networks, my guess is the former. 

LendingClub homepage from outside Facebook

LendingClub homepage from inside Facebook

Last week we reported on the apparent traffic spike at person-to-person lender Prosper. Compete's Snapshot showed Prosper with 1 million unique visitors in March.

Based on that observation, Compete dove into the Prosper numbers and found that the domain had not yet been added to its more rigorous monitoring system, and in fact, there appeared to be some panel bias in the original March traffic numbers. Under Compete's revised assumptions, Prosper's March traffic estimate is a third less, just under 700,000 visitors, instead of 1-million plus. 

Also, Compete has now released its April estimates and found that Prosper's traffic declined 25% to 500,000 visitors. While that no longer puts Prosper at the same level as Suntrust, the lender does have considerably more visitors than the nation's 23rd largest bank, Comerica (see revised traffic chart below, Prosper is the blue line).