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No. of Recommendations: 9
"One way to quantify it is...if you thought of a system that was completely random as 0 and a system that was omniscient at 100. Our view is most lending systems in the consumer world are at about 2, and we believe our system reasonably is at about 10. So we're 4 to 8 times more accurate than a traditional lending system but we're only 10% towards what is theoretically possible. There's always some randomness in the world so you can't get to 100% predictive but we are literally just scratching the surface of what's possible with AI."


Thank you for posting the quote. It really is an eye-opener. Imagine ! He said most lending systems are at a 2. I noted his remark during the Conf call that he though FICO scores were poor underwriting tools but 2 out of 100 is worse than poor. If what he says is accurate , and it is likely so, we won't be worrying about banks or other competitors to UPST for quite a while.I'm also amazed to learn that he feels he is only 10% of the way there. Wow.

It also occurs to me that things change. Today's predictive data points gradually (rapidly?) go out of style. Habits and mores change and new kinds of data appear which become better indicators for decision making. So in view of this insight I fully expect Upstart to keep and even expand its lead and strengthen its moat for quite a while yet going forward. ( Does anyone ever go backward?)

Perhaps I will raise my stake


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