for a Silicon Valley company called Earnin, in which a young woman with an enviably full life — a radio show, DJ gigs, guitar playing — relates that she’s having a hard time getting by.
Palaniappan told me the Palo Alto company’s business model is based on the idea of paying it forward. That is, users pay a tip so that other users can take advantage of the service, and then they pay a tip, and so on. Many consumers, especially those with limited incomes, likely will balk at voluntarily paying for something that they don’t have to.
“They’re giving people money and they’re expecting you to pay it back,” Saunders said. “This isn’t some nonprofit. This is a for-profit venture funded by big money from Wall Street, and these big companies are looking to make their money back.” And even though there’s no rollover, the fact that you needed a cash advance indicates you’re likely living paycheck to paycheck. Earnin doesn’t remedy that.
“It is our customers, however, that we truly rely on to keep the app going,” it says. “Earnin is 95% community-supported and mainly operates on the tips we receive from customers.”
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Davidlaz another startup that won't last long due to the business model
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