You might describe Sarah Williams as an accidental entrepreneur. She graduated college in 2011, and like many others found no clear career opportunities. To pay the bills, she works in retail at J. Crew, but her hours fluctuate week to week. To make extra cash, she runs an Etsy shop selling handmade prints. She wants to become a graphic designer, but often turns down design work while scrambling to cover a bad paycheck.
Sarah’s story isn’t unique: The way we work is changing. The topic has been covered piecemeal for years, in stories like the rise of contract labor, or the inconsistent hours of service workers. These changes force individuals to manage cash flow just like small businesses, but the financial services available to support them are frustratingly limited. As a result, consumers increasingly turn to broken alternatives like overdrafts and payday loans.
Even is building financial services for the millions of people just like Sarah. In practice, Even acts like insurance for your paycheck. If you get fewer hours this week at Starbucks, or the shifts you drive for Lyft aren’t as busy, Even ensures that a bad paycheck isn’t going to leave you scrambling to cover rent.
We use historical data to predict a user’s weekly income, and pay this amount to them every Friday. If their paycheck exceeds this average, we set aside the extra in savings automatically. If they earn less, they get a little bit of credit from Even, interest free, paid back in future good weeks. Users pay a small, flat, weekly fee to use Even.
There is a fast growing body of research on the effect of inconsistent income. The US Financial Diaries project is one of the first, tracking the dollar by dollar financial lives of American households. One survey from the Diaries stood out to us — a survey where 77% of participants said they would prefer financial stability to an increase in income. People like Sarah earn enough money to cover their expenses and make progress towards larger goals. But, when that income is inconsistent, they are forced to rely on credit cards, overdrafts, and other forms of short term credit. For people traditionally considered “underbanked”, this pain is magnified. Cut off from the financial system that makes short term credit reasonably affordable, they turn to payday loans and pawn shops, often starting a spiral of debt with disastrous long term consequences.
Taken together, we’re placing a massive mental tax on a growing portion of our population. Sarah’s story reveals why we think Even is so important — our cofounder Jon articulates it best in Why?, but to put it simply: financial stress prevents people from tackling larger challenges and goals, such as pursuing an education or moving to a new city. Removing the stress of an inconsistent paycheck is the start, but we see it as a first step toward something much larger. The very wealthy have long had their finances managed for them: witness the proliferation of family offices and private wealth managers. We see no reason the same luxury shouldn’t be available to all: the luxury of knowing that your bills have been paid, your savings are secure, and that you can afford the basket of groceries in hand as you step to the register.
Opening up that luxury to millions of people is a massive challenge, and we’re a very young company — Just four people working out of an apartment. But if we’re right — that smoothing Sarah’s income will meaningfully improve her life — we’ve got something potentially huge ahead of us. So if you’re looking to really, truly help people, and if you’re ready to tackle problems no one has tackled before, and if you’re ready to be challenged every day you come to work, and if you want to feel like you played a pivotal part in building something good for the world, let’s talk. Let’s make things Even.
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