Late last year, Even generated a lot of buzz when it was announced that the banking app provider had signed up Walmart—the nation’s largest employer—so that its 1.4 million workers can draw in advance on their next paycheck and thereby smooth out their financial ups and downs. But this huge success notwithstanding, Even’s own path has been anything but smooth.
“We’ve only just recently exited this experimental stage,” Quinten Farmer, Even’s cofounder and chief operating officer, told me on the latest episode of my podcast, The Bottom Line.
Launched in 2014, Even displays an all-too-rare sense of humility in a world where many startups feel a constant need to swagger. This doesn’t mean that the company is timid; Even is plenty eager to put forth bold ideas. But it is also willing to be transparent about what isn’t panning out—and change directions when necessary.
To this end, when Even brought on a head of research a few years ago, “her mandate was to make sure that we as a company didn’t lie to ourselves,” Farmer explains. She has since used the company’s blog to, in Farmer’s words, “essentially live our product development experience in public.”
Making Even’s embrace of this fishbowl existence all the more extraordinary is that things were bound to get messy given that the company had chosen to take on an immense social challenge: income volatility.
Because of erratic work schedules, the need to take time off to care for a loved one, and other issues, many American households face wild swings in their earnings—25% or more on an annual basis and even bigger fluctuations month to month. This makes it “difficult for families to plan, pay regular expenses, save, or pay down debt,” the Pew Charitable Trusts has pointed out. Often, they’re forced to turn to expensive options, such as payday loans or overdraft protection, to cover the bills.
Even’s original way of trying to solve this was through a product called Pay Protection, which Walmart quietly piloted.
“Basically they said, ‘You know, we think you guys are pretty small. We think this is pretty early. But there’s something here. Can we figure out a way to work together?'” Farmer recalls.
Under Pay Protection, the system would establish an average income for you based on your pay history. If you earned more than the average during a particular period (because you worked a bunch of overtime, for instance), it would direct you to save your money. If you earned less (because, say, you had to miss work), Pay Protection would either take money from your savings or float funds from Even to make up the shortfall. All of this was made available for a subscription fee of just $3 a week.
“You can kind of imagine this nice, elegant smoothing function,” Farmer says.
The trouble was, what Farmer and his colleagues imagined didn’t match the way that people actually lived their lives. As it turned out, many folks were routinely running into a cash squeeze before their next payday, when the Even app was designed to intervene. Action, however, was required immediately.
“The classic example really is rent is due two days before payday,” Farmer says. “It’s purely a timing problem.”
And so the company ditched Pay Protection and introduced a new solution called Instapay, which allows people to withdraw part of their paycheck early. Because this is offered as a benefit by employers, Even knows how much money in total is coming to the individual. This ensures that it won’t extend funds, willy-nilly, beyond what someone has earned, helping to keep them financially healthy.
For Farmer, the entire process—trying something, failing, and finally seeming to nail it—is exactly what Even promised its earliest investors. “We don’t know all the answers,” Farmer remembers telling them. “We don’t know what the right approach is. We’re pretty confident we can find it.”
You can listen to my entire interview with Farmer here, along with Molly Nugent reporting on one woman’s struggles to cope with her own financial instability, and Rachel Schneider examining how our assumptions about gender are shaping the future of work.