For years I have been investing in (and on) p2p lending platforms such as LendingClub, Prosper and Dianrong, and I have been writing about it on this blog (e.g. see this post from 2012). Although people were skeptical at first a lot of my friends now invest part of their savings there, simply because returns are so much better than what you can get at banks or in other debt investments.

To give you an idea, at LendingClub I have made consistently over 8% net (=after write-offs) for years. I also invest in funds that do leveraged investments in platforms, where you make 3-4% per quarter (13-16% per year). These are fairly liquid investments, so your money is not tied up for years like in most of my other investments.

In China, where I am on the board of one of the leading marketplace lenders Dianrong.com, returns can be even higher. That’s mainly because there are no other sources of capital for most borrowers. Maybe I am biased, but I feel p2p lending is much more common in China than in N-America and Europe, especially because it’s so easy to lend money through mobile apps.

I think there are a couple of reasons why marketplace lending has taken off so fast globally and why it is better than traditional bank lending. Samir Desai, founder and CEO of Funding Circle, a UK based marketplace lender gave a talk at the Lendit conference in London this week in which he focused on this. I embed a video of his speech (via avc.com) and summarize his main points below.

Why are marketplace lenders better than traditional banks:

-P2P marketplace platforms don’t need to have money on their balance sheets to lend it to consumers. It’s direct p2p lending, so the platform has no inventory. In that way platforms are truly aligned with investors, for example they can’t invest in loans themselves, so there is no incentive not to put the best loans on the platform. Next to that it leads to platform being faster and cheaper.

– Platforms are completely transparant. On most platforms data about all originated loans is available in detail. Try that with traditional banks!

– Platforms only do loan origination and many platforms focus on a certain type of loans (e.g. student loans, or loans to specific categories of people). By doing this over and over and over again, they get better and better and better at it. That leads to even higher returns for investors.

– Platforms generally give the same investment opportunities to small and large lenders. It may be easier to lend as a big player because the platforms service you better, but if you are a savvy small investors you have access to the exact same loans at most platforms.

– Platforms have no systemic risk, because the maturity of the investments is the same as the maturity of the loans. This is very different from banks where short term deposits may be used for long term loans. In case of a bank run the whole bank may fall apart because of this mismatch, as was the case with Northern Rock in 2007-2008. On a p2p platform a bankrun is impossible because there is no maturity transformation.

Conclusion: P2P or marketplace lending is far superior to bank lending, is more secure, and has higher returns because of efficiency. We will therefore see a lot more growth in this kind of lending over the next couple of years. Being a shareholder in these platforms or putting money on these platforms as a lender will continue to give investors outsized returns.

I am a big believer that the near future will be full of self-driving cars. So Tesla’s announcement this week that it would roll out its first self-driving features in a software update to its cars was super exciting.

My business partner’s wife drives a Tesla Model S P85D (the one with the insane mode, going from 0-100 km/h in just 3.1 seconds) and her car received its autopilot update on Friday morning. Because of my Facebook posts about autonomous driving they dropped by my house today to show me the autopilot’s features. Of course I made some videos and I uploaded one here on Youtube.

Once you drive over 30 km/h you can turn on autopilot (by pushing the cruise control handle twice). At that moment the car keeps on driving the same speed (like in cruise control mode), but it also starts steering for you. On the highway that works very well and the car keeps its lane and adapts its speed to other cars in the same lane.

Also passing other cars is easy, you just turn on the your signal light, then the Tesla will check if there are no cars close to you and move over to the next lane.

It start getting tricky if you get to an area with construction though. At that moment the car gets confused, gives a warning and you have to immediately take over manual control. The current version of the Autopilot software is far from ready to drive through a construction area, and that’s kind of scary.

On secondary roads it’s even worse, because many streets don’t have outside lines or the middle lines are too faded. We had quite some problems using the autopilot features on two-lane roads and one time we even started to drive into the lane with oncoming traffic! Also the autopilot doesn’t recognize stop signs (they are everywhere in Canada) and traffic lights yet…

To be fair, the software is only in beta version and you should actually keep your hands on the steering wheel at all times. If you do that you can turn on autopilot on non-highways as well, but what’s the use of autopilot software if you still have to pay attention to the road?

My conclusion after a short test drive is that this is a major step forward in the direction of autonomous vehicles, but that this software is not ready for non-highway use yet. Maybe it’s useful in traffic jams downtown, but for now I would only use it on highways. For long distance drives it’s great though. Just put your destination in the GPS, start driving and once on the highway let the car take over the controls. Keep a thumb on the steering wheel and look up regularly (e.g. to see if there is construction ahead!), but you can then start doing other things as well.

I am a bit worried that we’ll see some accidents caused by Tesla drivers using autopilot software soon. Although Tesla makes clear that you are still responsible for your car, some people may not realize its current limitations and rely too much on the car not making mistakes. The autopilot will get constantly better because the cars send feedback about road conditions to Tesla, so if you’ll wait a few weeks it will likely be much safer already.

My current cars feel suddenly very old fashioned, my next car will likely be a Tesla.

This year’s Vancouver Marathon was not the best marathon I ever ran. A week before I could still hardly walk because of an injury, so I could not participate in the 10K Vancouver Sun Run. But I still decided to do the full 42.2 km marathon the weekend after that. The result was an even worse injury (but I finished, which is the only thing that counts), however, there was more.

I think our housekeeper washed my Vibram running shoes before the race, because while at the start I felt they were suddenly too small. During the race my big toe was very painful, but I continued anyway. I will spare you the details, but about 3 weeks later I lost my complete toenail because of this. I never realized how important even a toenail can be, I could not even swim for a few weeks because of that (too much pain).

But the strangest thing was that after the marathon my lower abdomen was hurting and it looked like I had suddenly grown a big tumor during the run. Kind of scary, so I went to see a doctor a few days later. He told me that it was a hernia, something that 10% of the people develop during their life, which was a bit of a relief. This marathon had been too much for my body it seems.

I did some research and managed to get an appointment with the best hernia doctor in Vancouver, Dr. Scudamore. He told me that it was an inguinal hernia. A surgery was not immediately necessary, but that not doing it could lead to potential complications such as strangulation (cutting off the blood supply to part of the body). Because the full recovery of such a surgery would be 6 weeks I decided to postpone the operation until after the summer (I wanted to go swimming and sailing in summer), and so last night I went in for my operation.

I have always been very healthy and never had an operation before. The only time I spent some time in a hospital was when Scott and Elaine were born in Shanghai. So I looked forward to it actually, I like to learn new things and this is the best way to observe how a surgery works.

While being tied to my bed in the operation room I asked the anesthesiologist a lot of questions and looked at all the monitors and other instruments surrounding me. I was put on an IV, which I had never experienced before. I was hungry and dehydrated (I had not eaten for 20 hours when I entered the hospital), but the IV makes you feel better soon. The view from the operation room was great, on the top floor of the building with windows all around and views over the city. Too bad I could not take a selfie!

Dr. Scudamore walked into the surgery room just before 7 pm (I already had a short chat with him 30 min before the operation in which I could ask him all kinds of questions) and informed the staff of the procedure. Then the anesthesiologist put a mask with 100% oxygen over my mouth and told me I would be asleep in 20-30 seconds. Breathing was kind of hard so I closed my eyes and took deep breaths. After 30 seconds I felt I was still not asleep and opened my eyes to tell the doctor that it did not seem to work. But I was surprised to see that I was suddenly in a different room and that the clock at the end of my bed showed it was an hour later! The surgery was over already and I had not noticed anything.

I felt fine and wanted to get up, but the post operation nurse told me to stay put. I was completely awake and asked her for something to read, but that was not possible. I had to lay down for at least another 45 minutes. That was very boring, because I felt great (thanks to the IV and all the medicine in my body) and I am not used to doing nothing for 45 minutes. There was a man in the bed next to me who had also had surgery and who seemed to be doing a lot worse. I could not see him because of curtains between the beds, but I understood that they had needed a lot more medicine to bring him to sleep and he was not in good shape when he had woken up right before me.

After a very boring 45 minutes in which I asked the nurse questions about the instruments, the surgery itself (the whole operation had lasted just 35 min), and post-operation procedures, and in which I was trying to come up with improvements for patients (why not put a simple muted TV screen above the bed to at least you can watch something without moving or hang some posters on the ceiling), I was finally allowed to get up. The nurse wanted to bring in a wheelchair but I said I wanted to try to walk myself. That went fairly well, but the nurse warned me that if I would fall she may not be able to catch me. After leaving the post-operation area I was told to go to the toilet (they don’t let you go until you prove you can do that!), which was kind of weird because the whole middle part of my body was completely numb.

Then another nurse came and put me in a wheelchair. I did not see the necessity for that but wanted to go home and just obeyed. She took me to Grace’ car and with some pain I managed to get in. I thought I would sleep most of the drive back home, but I was not tired and could even tell Grace how to drive (she prefers my directions over her navigation system).

At home I decided to walk around slowly instead of lie down because I felt fine. But all of a sudden my legs felt like jello and I fell backwards on the ground. I still don’t know what happened exactly, but it was a good lesson that I may feel okay but I was not yet okay just 2 hours after the surgery.

From then on I just sat down, had a lot of clear soup and then went to bed where I read some emails, wrote a couple of text messages and tried to read a book. By 11 pm I was supposed to take new painkillers, but I felt the pain was manageable so I did not take them yet.

The night was not easy because I could only lay in one position and woke up each time I moved. I was thinking about taking painkillers at 5 AM, but in the end decided to try to get through the night without them. The result was not much sleep, but I still felt quite rested. I also had a lot of time to think about the things I experienced in the hospital and what could be improved. Especially the information flow is quite limited, if you don’t ask you just don’t hear a lot of things. Also the waiting time at the hospital before the operation was unnecessary. Why let me arrive at 3:45 pm and not start the operation until 7 PM (I was told other operations took more time than planned)? Just give me a call in advance so I could have worked 2 hours longer. A simple app could have solved this. And maybe I am different from others, but I would have liked to see pictures or video of the operation, that would be a nice memory.

It’s now 9 AM, the kids are in school and I am sitting in the living room doing emails and WeChat messages. Pain is still manageable so I still haven’t touched my painkillers. I may do so later if I want to get some sleep, but if I can handle the pain without medicine I prefer that. Actually, the pain is a lot less than I thought. Several people told me it would hurt like crazy, but it’s actually not much worse than the pain during or after a full marathon. The main difference is that after a marathon you can lie down on your bed and feel much better, here the pain is very concentrated and doesn’t really stop.

Recovery will be quite slow, it will take about 3 weeks before I can do light activities again and it will take 6 weeks for a full recovery. Biggest problem is that I can’t drive for 2 weeks (time for self-driving cars!), but I believe I should be able to beat that time if I walk around a lot instead of hang on the couch. I am in pretty decent shape, so I assume that with healthy food and drinks my body should recover a lot more quickly than the average person would. We’ll see. At least it was an interesting experience that I actually enjoyed (I realize that might sound strange), I just wish there would be a bit less pain involved.

One of the things that I enjoy most is to talk about disruptive technological trends and how they will already impact our lives 5 years from now. I use this in my investment decisions, both for start-ups and for public companies.

One of the most interesting areas for me is how quickly autonomous car technology and robotics are developing. My vision on this has evolved quite a bit since I moved to Canada in 2013, especially my view on the time line in which changes will happen (within the next 4-5 years) and the effect of robotics (more positive than I originally thought).

Robotics and autonomous cars are actually the same thing, because an autonomous car is nothing more than a robot. I have predicted for years that robots will take over most of our daily tasks and that the majority of people will lose their jobs over the next 20 years. I now believe that this will go much faster, but I also believe that this does not need to lead to mass unrest if society prepares itself well for the coming changes. This post will focus on self-driving cars, I plan to write about the effect of mass unemployment later.

Autonomous cars are a good way to explain the effects of robotics to people, because most of us use cars and can understand the changes that self-driving cars will bring. Within 5 years the first completely autonomous vehicles will hit the road (in 2013 I thought it would be in 2023, now I think it will already be by 2019-2020). Many cars already have limited self-driving features and these show how far we have come over the past years.

Last month my wife bought a new car with some of these self-driving features and it’s quite interesting to try them out. Among others her car can parallel park itself or it can back into a parking spot. It is kind of scary the first time you use it, and I even braked because I thought her new car would hit the car next to us (message from the car: “please release the brake”), but once you have done it a few times you realize the car is a much better parker than most humans.

The car also has automatic brakes in case the car in front of you suddenly slows down. When I was testing her car I drove up to a stop sign where a car was waiting in front of me of me. I saw that the car would start driving because there were no other cars at the intersection, so I drove up to him quite fast. About 15 meters before the stop sign, and right at the moment the other car started driving, Grace’ car suddenly took over the controls and started braking hard while making a beeping sound. It was very strange when it happened, but it’s actually assuring that the car forces you to drive more carefully.

For me the big take away is how quickly you get used to these features. It makes driving easier and safer, and after using them a few times it feels totally normal. I think that once cars will become more autonomous we will immediately accept it and will let the car do all the driving.

It will change the way cars look and feel. I don’t believe that fully autonomous cars will need a steering wheel and pedals. Once you have given control to your car you won’t feel the need to drive yourself anymore. That’s the mistake the big car manufacturers seem to be making, most still believe that people will want cars where you can take over from the computer if needed. It reminds me of the first cars in the late 1800’s that looked like coaches, so you could still put a horse in front of the it! Google doesn’t have this bias and its autonomous vehicle prototypes are just sit-and-go, without any controls for passengers. They redesigned the concept of a car bottom-up and that may turn out to be a very smart move.

Given how much better electric cars have become over the past 3 years (Tesla cars are among the very best vehicles on the road right now) and how quickly battery technology and solar power are developing, my prediction is that the first autonomous cars will be completely electric. No more engines with moving components that need maintenance and can break down easily, but a simple but powerful battery powered car.

This will have huge implications for the car industry, because many companies are still focused on gas- or diesel-powered engines, instead of focusing all their energy on electric technology. But not just that, once autonomous vehicles become widely available, car sharing concepts will take off and the whole automotive market will collapse. Why do you need 2-3 cars per household if these cars sit in parking lots 95% of the time?

I believe that most people won’t own cars anymore but will subscribe to an Uber-like concept in which an autonomous vehicle will show up at your door whenever you need one. The number of cars will go down dramatically and if you are the operator of a parking garage you might as well start looking for a new career. Self-driving cars will park themselves outside of city centers to recharge their batteries, or more likely, immediately drive to the next person that needs a ride.

Costs will be much lower than current taxi services, because there are no human drivers involved anymore (the majority of the costs for a taxi are salaries), because cars will become much cheaper (mass-produced luxury taxis without complicated engines will probably be produced for $15-20,000, and because of their electric engines you can drive them for more kilometers than normal cars) and because they don’t need expensive gas anymore (with better solar power and batteries the variable costs of driving will go down to almost zero).

My prediction: transportation will become almost free. Hard to imagine right now what impact that will have, but for sure it will change the way we live. People might start to live further away from downtown for example. And supermarkets may disappear because ordering online will be faster and cheaper (immediate delivery, no delivery costs, and the supermarket doesn’t need expensive real estate).

Traffic jams will disappear, not necessarily because there will be less cars on the road, but mainly because autonomous cars drive more efficiently (no sudden brakes) and will communicate with each other so that traffic lights are not necessary anymore. Check out this YouTube video to understand what will happen in intersections when you only have self-driving cars: https://www.youtube.com/watch?v=r7_lwq3BfkY This assumes that there are no human driven cars anymore, which will not happen 5 years from now, but it will be the case in 15 years. Possibly older cars will be have to retrofitted with autonomous systems or they will not be allowed to drive during rush hour or on certain roads.

Another big advantage is that there won’t be many accidents anymore. Driving is one of the most dangerous activities, but that will change once autonomous vehicles take over. Insurance companies should take this into account, if you are a car insurer your business may go away over the next couple of years.

I am very positive about the changes that will happen in the automotive industry over the next years and the additional freedom and free time it will give many of us. It will completely disrupt some industries but it will also create a lot of new opportunities. I look forward to these changes and hope to drive (or better: be driven in) an autonomous car by 2020.