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This interest free loan makes it VERY susceptible to fraud or abuse. Lets consider for example, a technology contractor, making $120,000 a year from various co

This interest free loan makes it VERY susceptible to fraud or abuse. Lets consider for example, a technology contractor, making $120,000 a year from various contracting jobs. The contractor could sign up for Even, and then retire, collecting a $2500 "paycheck boost" interest free. I think this idea has a lot of value, but their current business model can't be profitable.

jkaunisv1 12y ago
It sounds like the signup process will be fairly high-touch, to evaluate whether they're a customer Even wants. Given that this involves a fairly complete opening of the kimono, I doubt Even would let someone who makes $120k/year sign up.
- jklein11 12y ago
  How can you afford a high touch sign up process for a customer who is worth ~$144 a year?
  - jkaunisv1 12y ago
    If customer support requirements are high at sign up but low for customer lifetime then it shouldn't matter as long as their retention is good and lifetime is long. I don't know, it's not my business plan. I'm just pointing out they're unlikely to have a signup process that lets people with high levels of income in.
    - jklein11 12y ago
      That's a fair point. Sorry I didn't mean to come accross as attacking you I'm just confused by the business model in general.
      - jkaunisv1 12y ago
        This is absolutely not my area of expertise, but if I had to guess: * Spend a fairly fixed amount of money developing the app and related infrastructure * Keep a slush fund for covering loans * Potential customer provides their bank account info, run it through a risk analysis program * Have a human approve or deny the customer based on that program's results * If approved, give them some coaching & onboarding training * Largely ignore the customer unless they go in arrears, make $12/month for your SaaS offering Note that monthly cost isn't much different from something you'd pay for a Shopify store, say. And they have very high touch onboarding in some cases.
        jklein11 12y ago
        Shopify makes their money on the transactions and their pricing model scales up to $180 per month. I honestly believe that this is an MVP and the "Pay Boost" might being interest free after they figure out how to conquer the regulator hurdle of loaning money.
mrsteveman1 12y ago
The interest free part of course limits them from generating profit directly that way, but alternate revenue models are certainly possible on top of the $3/week users have to pay on a continuous basis. > The contractor could sign up for Even, and then retire, collecting a $2500 "paycheck boost" interest free. I'm not sure how things play out legally with them claiming to not be a lender, but I doubt the Even team hasn't considered something so basic as how to recover money they've "credited" to someone's account if the income they see drops to zero and stays that way. In cases of outright fraud the person wouldn't just be risking collections or a court judgement to recover the money, they'd probably be facing criminal charges.
- jklein11 12y ago
  Just because something is illegal doesn't make it any less costly to enforce. I agree that Even probably has some recourse, I'm just not sure what it is. Part of me thinks that this is Even's first pivot. See if there is a market and then see if and how they can monetize it.
VikingCoder 12y ago
Someone who has assets (retiring) that owes a business money is probably going to get sued.
- jklein11 12y ago
  That was just an extreme example. If I were a freelancer and having a great month / 3 months / year I would quick sign up for Even and extend the ride a little longer.

jkaunisv1 12y ago

It sounds like the signup process will be fairly high-touch, to evaluate whether they're a customer Even wants. Given that this involves a fairly complete opening of the kimono, I doubt Even would let someone who makes $120k/year sign up.

jklein11 12y ago
How can you afford a high touch sign up process for a customer who is worth ~$144 a year?
- jkaunisv1 12y ago
  If customer support requirements are high at sign up but low for customer lifetime then it shouldn't matter as long as their retention is good and lifetime is long. I don't know, it's not my business plan. I'm just pointing out they're unlikely to have a signup process that lets people with high levels of income in.
  - jklein11 12y ago
    That's a fair point. Sorry I didn't mean to come accross as attacking you I'm just confused by the business model in general.
    - jkaunisv1 12y ago
      This is absolutely not my area of expertise, but if I had to guess: * Spend a fairly fixed amount of money developing the app and related infrastructure * Keep a slush fund for covering loans * Potential customer provides their bank account info, run it through a risk analysis program * Have a human approve or deny the customer based on that program's results * If approved, give them some coaching & onboarding training * Largely ignore the customer unless they go in arrears, make $12/month for your SaaS offering Note that monthly cost isn't much different from something you'd pay for a Shopify store, say. And they have very high touch onboarding in some cases.
      - jklein11 12y ago
        Shopify makes their money on the transactions and their pricing model scales up to $180 per month. I honestly believe that this is an MVP and the "Pay Boost" might being interest free after they figure out how to conquer the regulator hurdle of loaning money.

mrsteveman1 12y ago

The interest free part of course limits them from generating profit directly that way, but alternate revenue models are certainly possible on top of the $3/week users have to pay on a continuous basis. > The contractor could sign up for Even, and then retire, collecting a $2500 "paycheck boost" interest free. I'm not sure how things play out legally with them claiming to not be a lender, but I doubt the Even team hasn't considered something so basic as how to recover money they've "credited" to someone's account if the income they see drops to zero and stays that way. In cases of outright fraud the person wouldn't just be risking collections or a court judgement to recover the money, they'd probably be facing criminal charges.

jklein11 12y ago
Just because something is illegal doesn't make it any less costly to enforce. I agree that Even probably has some recourse, I'm just not sure what it is. Part of me thinks that this is Even's first pivot. See if there is a market and then see if and how they can monetize it.

VikingCoder 12y ago

Someone who has assets (retiring) that owes a business money is probably going to get sued.

jklein11 12y ago
That was just an extreme example. If I were a freelancer and having a great month / 3 months / year I would quick sign up for Even and extend the ride a little longer.