I am the first to say and understand that this promise of utopian lending is a fools dream. Lending is a cyclical market, and nothing is going to change that.
What UPST offers is a few points better results than a lender would otherwise be able to obtain both in defaults and in loans they can make. However, despite better results, in bad times all lenders are going down, UPST with that.
This said, who cares at present. We are in the midst of low hanging fruit and disruptive industry changing hyper-growth in the midst of a the beginning of a new economic up cycle (TBD given the inflation national debt, Covid, etc. but for the most part, ignoring these things have been the best way to go).
Thus, what I am saying is all the critique is largely true, but is not really relevant at present during this phase of growth and disruption. There is just too much good stuff going on. As we know things can change very fast, and if it does, like we saw with Alteryx, the numbers will speak volumes.
Alteryx is very instructive. The issues Alteryx had were recognized several years ago. (1) was its server client technology and no real cloud. Our retort was management said customers were not asking for cloud and the data was mostly local anyways. And given the low hanging fruit, it worked out. But something happened during Covid. (1) AYX underperformed the WFH stock appreciation materially. It ended up doubling, but only at its top, and otherwise was a strong underperformed in an enormous WFH market boom (during an economic crisis that otherwise caused most people to want to sell and panic (not us of course!)); (2) When people started working at home, it his companies in the face as to how backward server client actually was when the data was no longer local (As employees were not local).
So long and short there, had you thought that many years out you would have lost out on the incredible performance Alteryx gave us, plus, the numbers changed, we still could have got a double in 2020 on Alteryx if you were nimble, and the numbers told us when to get out and ruthlessly prune Alteryx from our portfolio.
At some point this will happen for Upstart (and Upstart may turn out to be more resilient than we think and a really long term winner) but for now, all we can see is what is in front of us. In the long run we all die, but that does not stop us from trying to at least feign to live a life in-between. It should also not keep us out of the stellar peak disruptive period of a hyper-growth dominant company just because it may be subject to future macro-economic conditions, and it may run out of low hanging fruit in a few years (it may not, but these things will, like with Alteryx, at some point probably have to be addressed and dealt with by Upstart).
Tinker