Build It and They Might Hate It

I wrote this back in March 2020 but didn’t get approval to publish it. Since then the described product has been shutdown. Note that details about the product offering have changed throughout the years.

The title is a play on “If you build it, they will come” which at the time was/is a mantra in the Silicon Valley startup world.

In July 2019, my team had spent late nights in the office working towards the GA launch of our new product, Gusto Cashout, a way to borrow against your already accrued wages. We had worked hard on it, getting everything wrapped up for when we did our GA launch in August. The plan was to do a gradual rollout of the product, but then after a month, we stopped the rollout.

There was lots of positive feedback. The people whom we serve used it to get access to money in between paydays, usually for emergencies or when cash flow was an issue. An example of a cash flow issue is when you get paid every two weeks, but rent is due on the 1st of the month. You know you’ll have the money, but don’t at the moment. The timing of cash is the issue. And people use our product for emergencies, like an unexpected visit to the doctor, or when you need a new set of tires. Those are costly because you can’t just replace just one.

If you work in a high salary job like tech, you might be confused. It’s reasonable to be thinking: why would I need to take a loan out for this? Credit cards are an option, but many don’t have access to credit. People have different financial situations, and not everyone can absorb a $400 hit. ¹ Cashout provides the ability to deal with these issues without relying on payday loans.

The process to borrow was seamless. Because Gusto handles payroll, we can recoup the amount the next time an employee gets paid. At the time, Cashout allowed you to borrow up to $1000 that came with a 1% fee. Simpler and cheaper than other predatory lending products. But while there was positive feedback, there were those that, I think, really misunderstood what we were trying to do. Because of this fee, we were considered by some as a payday lender. This reaction came as a surprise.

Was it just bad timing? Around the same time, startups offering similar products were being called out. ² So were we getting grouped in with them? Or was it because of the messaging we used in our copy? I don’t know.

The entire team put tremendous amounts of thought, care, and effort into making a great product that is a net positive for society. The intent was never to try and profit from this. But it’s easy to take good intentions and interpret them in another way. It’s been an experience. Putting something out into the world and having people really love it, and then to have others be against it.

After publicly launching in August, we took the time to reevaluate things, and I am proud of the decisions we’ve made. Cashout is now free. That means $0 in fees and 0% APR. We believe this will empower people to live better and more financially healthy lives because of this product. As a business, we take on losses, yet we’re doing it anyway because we believe in it. It’s special.