I feel like this could describe a lot of the culture around startups, too:
> Until we all begin to acknowledge there’s more to life than “the hustle,” and that struggling financially is not a personal failure, MLMs will continue to recruit and exploit aspiring girlbosses under the guise of female empowerment.
You could easily change that to:
> Until we all begin to acknowledge there’s more to life than “the hustle,” and that struggling financially is not a personal failure, startup culture will continue to recruit and exploit people under the guise of [getting rich, disrupting tech, changing the world, etc.].
I mean, it’s not an organized thing like an MLM, but I see a lot of the same toxic language and behavior around startups.
I dislike the hard-link comparison to startups. I personally know people who got sucked into MLMs and are almost exclusively lower income families. There are literal playbooks, talking points from the organized MLM's themselves on how to "recruit" your families and get them to buy their own product so they raise in "status".
If you're connected to military moms' or lower income groups you know how pervasive and destructive these MLMs can be to these families. Not sure if you have any idea, but it is incredibly frustrating, disheartening to talk to them about how it's hurting them. In my case, it was their own cousin who got them involved and ultimately into debt. Not a 20's single-no-attachment, but this friend has a family to care for. I get angry simply remembering this. The only thing worse was for profit education.
Startups simply aren't at that level and even bringing this argument into play detracts from the focus of how destructive MLMs are.
I think it's all the same ocean and a lot of foul creatures swim in it. Some of them are getting you into an MLM where you shuck oysters on a TikTok Live, some of them are selling you grifty courses about flipping houses, and some of them are selling you grifty courses about getting a job in tech. They're not necessarily all morally equivalent, but they're drawing from the same well of rise and grind hustle culture.
MLMs are especially pernicious and harmful, but we do ourselves a disservice if we blind ourselves to the toxic culture that enables them - one that extends far beyond just MLMs.
This is where we talk about the "accredited investor rule".
Startups do not usually require the people brought in to put in actual money. They put in time, for which they are paid with a mixture of cash, and equity which is basically a lottery ticket. But they do not flow money back to the founders. Generally the only people putting in actual money are those who can afford to lose it. Occasionally on HN I've seen people complaining that they can't sell shares to friends and family - or buy a startup they "know" is going to take off. But this is why: it's too easy to be fraudulent.
Now, what field has no such protections? ICOs and cryptocurrency. What field is rife with fraud that's been called "MLM for men"? ICOs and cryptocurrency.
Apparently, you've never watched those start-up tutorials sold on YouTube. Half the course is spent on arguing that by paying $2000 to learn how to make your own iOS apps, you're "investing in yourself". And of course the people that run the course make most of their money from running the course and not from actually releasing iOS apps...
"people that run the course make most of their money from running the course and not from actually releasing iOS apps..."
This is so pervasive. Even in the mainstream economy where we see universities marketing courses that might seem to lead to employment but in fact are very niche with little chance of leading to a job in that specialism.
I've been looking for piano tuition recently and it's refreshing to see marketing along the lines of how much enjoyment you'll get, with potential to entertain your friends at parties.
> A no true Scotsman fallacy, or appeal to purity, is a fallacy where the one arguing says or writes that all people belonging to a certain group have the same trait, and those in that group who do not share that trait are not really part of that group.
Care to point out where I made any universal claims about startup culture?
To be fair, any profession or field can be turned into a con. Just because deepak chopra advocates quantum healing doesn't mean the field itself is corrupt. MLM are by definition corrupt but startups aren't.
Maybe there is a tipping point where we start saying that "startup" is no longer a positive word.
Amount of wannapreneurs loosing money on scams, amounts of young adults exploited to work for below market rates for years, amount of scammers hiding under "startup" banner getting money from VCs or small investors are not "one Deepak using quantum healing".
> Just because deepak chopra advocates quantum healing doesn't mean the field itself is corrupt.
I must not be understanding what you mean. The field of quantum healing is entirely corrupt. There is no such thing, it's all bunk. Do you mean that quantum physics isn't corrupt? Because I doubt anybody thinks that.
I agree with the distinctions you've drawn. But this is hn so it's not unreasonable to make that startup comparison here, while it would be absurd if we had the same conversation on r/antimlm .
The comment you replied to wasn't "Startups are MLMs" and in fact goes out of its way to state that it's not implying they're identical, yet you still force your way into interpreting it in the least useful way possible.
The fact is, of course startups are not MLMs: but there are shared threads in how they lead to fallacious thought that puts someone else's goals and profit ahead of your own time, money, and general sanity based on not much more than a vague promise of a future payout.
I'll agree with you on this because I am trying to switch the concern - putting it back on how bad MLMs are in line with the article.
If you read the article and then read the most upvoted comment, it says "Oh yeah that's terrible, and look at how startup's terrible too in really similar ways!" That is "what-about-ism" - This is bad, "but what about..." Focus shifting.
It's the literal opposite of whataboutism. In no way, shape, or form, did the comment try to use startups to make MLMs look less bad, and in fact it did the exact opposite.
You're on a site where a disproportionate number of people are involved in startups/startup culture, and are also disproportionately in socioeconomic positions further removed from the effects for an MLM than a random population sample*.
(* I hesitate to even say this since I don't trust you won't try and build an enormous strawman argument out of it, trying to paint this as a "oh well readers here are to rich to care?!". I'm from a 3rd world country, so no, that's not it either.)
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Drawing parallels to a topic that's relatable to the reader is exactly what you'd expect in any half decent comment section.
At the end of the day you're saying you intentionally interpreted the comment in bad faith as a springboard to push your own take. A take which just repeats the literal contents of the article rather than interpreting it in a novel way.
I appreciate the feedback but it looks like we won't see eye-to-eye.
> did the comment try to use startups to make MLMs look less bad, and in fact it did the exact opposite.
So you read OP's comment and thought "Wow, MLMs are even worse because startups have toxic culture."?
I did not. I read that comment and thought "now the most upvoted thread will talk about startups" instead of MLMs and how they should be regulated like for profit schools.
> Drawing parallels to a topic that's relatable to the reader is exactly what you'd expect in any half decent comment section.
> At the end of the day you're saying you intentionally interpreted the comment in bad faith as a springboard to push your own take.
Again, agreed, I do take the comment in bad faith, which is why I voiced my disagreement and downvoted. Because the parent comment did exactly what you state, drew parallels to something that "people understand" here by trying to make startups and MLMs morally equivalent with the phrase "You could easily change that to:".
That surface deep parallelism detracts away how destructive MLMs are - hence my comment from personal experience.
> I hesitate to even say this since I don't trust you won't try and build an enormous strawman argument out of it, trying to paint this as a "oh well readers here are to rich to care?!"
Not sure what you're trying to preempt here, but quite a weird comment, sort of a strawman of strawman.
It's interesting because we're starting from the same position. What you're accusing me of - I'm agreeing with you because that's what I'm trying to do, but the conclusions end up being different - thus, never eye-to-eye.
I think you've misinterpreted broadening the conversation ("this was interesting, but what about this other topic?") with deflection ("are MLMs harmful? Well, other businesses are not angels either you know, what about the crimes of startup culture?").
Whataboutism is necessarily a deflection relying on a stated or implied moral equivalence between something under scrutiny and something irrelevant. Accepting the premise that something is problematic and asking whether that reflects a problem in other places is introducing a new topic of discussion to a conversation. You are free to criticize that, but whataboutism is a mischaracterization.
> You are free to criticize that, but whataboutism is a mischaracterization.
I think this is the root of it. That the parent comment does the moral equivalence action with "You could easily change that to:" and then inserts startups.
The assertion that I'm rejecting is the mischaracterization of startups. There absolutely are predatory startups, 100%, but to say as-a-group/whole that they're anywhere near the moral equivalence is what I'm rejecting.
[edit]
I realize replying to the other comment is - I didn't want the most upvoted thread to be about how toxic, predatory startups are. I could see this forum would easily agree to that and discuss it at length. And that's why I called it "whataboutism" because it's focus shifting and you're right, probably less about mischaracterization.
May I offer you a piece of advice, which is to try not to let it bother you too much if the top thread is something other than what you'd prefer? I know how frustrating that is, I experience that all the time on this site. But it's outside of our control what people want to talk about. You can't push the river, but you can exhaust yourself trying.
Paradoxically, I personally believe that only by accepting this and giving up on trying to steer the conversation or convince anyone of anything can you engage in a way that might accomplish those things. Or at least, for myself personally, I find that when I get too invested my rhetoric gets too heated and I feel all sorts of perverse "someone is wrong on the internet" pressure, and I write dumb stuff that makes people angry but convinces no one of anything.
The word "startup" is used for multiple different things.
One is funded by VCs, pays you a healthy salary, and gives you a shot, if you're lucky, at wheelbarrows of money from stock options.
Another is a pretend job you do from the age of about 23 until 37, mostly by yourself, bouncing between "accelerators" and "mentors", paying yourself a wage that a graduate student would feel sorry for, slowly getting old, and eventually realizing, as you approach 40, that you are now actually unemployable.
Information asymmetry is everywhere. In some cases this asymmetry is through organised structured hierarchy (employee vs manager/boss vs ceo/founder vs investor) and in some other cases there is no apparent overtly visible hierarchy – like open markets.
Markets are "efficient" at transferring money from "stupid" to "smart" people. Here "stupid" or "smart" is directly related to lower or higher in that information/power hierarchy.
This hierarchy is also self-amplifying in that it grows the asymmetry gap rapidly such that it becomes a very tall/pointy pyramid. So you could call it a "pyramid scheme".
Some schemes are overt/explicit pyramid schemes where flow of value from people lower in hierarchy to people higher is explicitly structured and visible (like most MLM schemes) and some schemes are obfuscated/implicit in this aspect (like corporate job ladder with perf/promo process within employees and between employees vs founders/execs and investors).
I think you are mixing up the general concept "hiearchy" with the very concrete concept of a "pyramid scheme".
The defining characteristic of a pyramid scheme is that the income at each level is predominantly connected to the recruitment of new members into the scheme. Twice as many new members per unit time translates to twice as much income, roughly speaking.
In management hierarchies, that may play a certain role, but your manager in a company isn't payed proportionally to how many new employees they recruit each month (unless they are explicitly a recruiter). It is rather proportional to the amount of responsibility which often correllates to the number of reports and their reports.
In other words, oversimplified, in corporate hierarchies, the pay relates to the number of people below you, while in a pyramid scheme, it relates to the first derivative of that value.
Except even if you receive money for a referral, you are still not getting any money FROM the referral.
My company gives 5k if I reference a developer that they hire. But he gets his normal salary, it’s not like he has to pay 5k, or even it’s deducted from the salary.
The problem with MLMs is that the money comes from other “members” not from sales… (Basically more than 80% of the revenue is other members and only 20% sales)
A normal company 100% of the salaries comes from sales (or shareholders, never from employees).
(Disclaimer: not intended as a complaint/disagreement with vinay_ys' comment, more of a rant about how I feel like how humanity as a whole could do a lot more to escape from zero-sum game scenarios)
> Markets are "efficient" at transferring money from "stupid" to "smart" people. Here "stupid" or "smart" is directly related to lower or higher in that information/power hierarchy.
Tangent: while this clearly applies in this context, I generally get really frustrated by this narrow way of modeling markets and by extension the economy, TBH, because it leaves out basically everything that's relevant to solving the really hard problems. Specifically, it ignores that real-life scenarios are not only strict hierarchies but complex networks that feature a ton of intransitive asymmetries (think rock-paper-scissors). Like, Buffet and Gates allegedly know about this[0] so it's not exactly obscure, and when you actually ask people on how they deal with trivial examples of it it becomes obvious that it's everywhere and people somehow try to work with it all the time[1], but whenever I hear people discuss markets it seems to be ignored. I dunno, I hope actual economists are less naive than the armchair kind (to which I certainly belong).
It kind of makes the misuse of the model feel like applying an algorithm that only works with DAGs to graphs full of cycles. It's not useless (just like how identifying DAGs is really important and useful), but when used to oversimplify complex scenarios it obscures the potential "good" cycles (virtuous ones) and "bad" ones (vicious cycles, deadlocks).
The papers/articles you quoted actually strengthen my argument. The information asymmetry is also about education/comprehension of complex concepts and rules of operating. Vast majority of humans participating in the economy (including a lot of smart techies) don't have sufficient access or strong enough aptitude/interest to seek out and learn such things to make material difference to their decisions. Instead they depend on psychological shortcuts to make "poor" decisions that keeps them lower in that information/power hierarchy. The game theory aspect of it is this – it is in in the best interest of the few to maintain/reinforce the mechanisms at play to keep the masses blissfully ignorant and continue to be dependant on those psychological shortcuts. If more and more people become conscious of it and start to "squeeze" the value in the middle of the value-chain, then the value accruing to the people at the top significantly reduces. Usually when that happens, powerful people change the rules of the game to reintroduce more information asymmetry again.
> Markets are "efficient" at transferring money from "stupid" to "smart" people. Here "stupid" or "smart" is directly related to lower or higher in that information/power hierarchy.
Why not just say "Markets are efficient at transferring money from less powerful to more powerful people." then?
No, it's not reducing. In theory you can define anything as "power". If I know any fact you don't then, by your definition, I have power. But describing that as a power imbalance is a 100% hindrance to communication.
The study linked in the article says that 99% of MLM participants end up losing money. Unless you have some data to back up similar stats for startup employees, you're creating a false equivalence (and a startup failing isn't the same thing as the employees ending up with a net loss, mind you).
“ The epiphany that explains the crypto boom, Andrew Tate, “passive income” strategies, dropshipping, finance influencers, executive training programs, meme stocks, etc is the commercial realization that American men are extremely susceptible to multi-level marketing schemes”
>American men are extremely susceptible to multi-level marketing schemes
Men are under extreme environmental pressures to be successful providers. Perhaps it's why they suffer the highest suicide rates. Equating their eagerness to provide for loved ones with susceptibility (i.e. stupidity) is misguided.
A thing is only an MLM if the people at the top of it are actually getting rich off of the backs of the people below them. Which is true of some of the things in that list. But for others (e.g. dropshipping — and also "freelancing" for companies like Uber) it's just participation in a sector-wide race-to-the-bottom, where the free competition and commoditization of every role in the system drives margins at every step to zero, resulting in literally nobody getting rich.
With dropshipping, there are a lot of "pay me $500 and I'll teach to you get rich dropshipping!" classes.
It's not quite the same as an MLM because the teacher doesn't get continuous income off the people they recruit after they finish the class, but it is like an MLM in the sense that the people recruiting people to their class are the only people making any money. And they tend to create "levels" of classes, etc to keep people paying.
You mean like those guys that purchased an online course on how to run a walled-garden online course and then are aggressively selling their own online course (on how to run a walled-garden online course) ?
It depends on the context – at the peak of Uber/Ola in India I met and spoke to a lot of drivers – they came from villages where they left behind agricultural land and large joint-family life (agriculture is hard/risky work no doubt, joint-family can be judgemental and lack personal freedom) for the promise of romanticised independent city life and being your own boss. What they didn't understand fully was that they were being saddled with a car loan and a commitment to drive 16+ hours per day and sleep in the car and eat poorly for several years just to meet the car loan payments, fuel and maintenance for the car and also send some leftover money back home. Performance incentive bonuses paid by Uber/Ola were strong early on to attract and grow this base. But it quickly dried up after the first few years. So, the drivers who did well in those first few years became the brand ambassadors to recruit more drivers. Those who joined in the later years are screwed. Meanwhile the company valuation grows exponentially and goes public and helps transfer more money from retail investors to early institutional investors etc. In this there are examples of multiple levels of information asymmetry resulting in a few getting rich off the backs of sweat and tears of a lot of people.
The people at "the top" of dropshipping aren't AliExpress/Wish/etc; they're rather the job-shop owners making the junk that gets sold on these sites. The supply chain originating from these factories existed long before these online dollar stores came into being as middle-men in it; before the online-ification of dollar stores, these factories used to directly contract with buyer-importers working for the brick-and-mortar dollar-store chains!
These factories have never done too well for themselves. There's a reason they never achieve "escape velocity" into having brand recognition. Even before giant online dollar stores, their production (injection molding not-very-detailed plastic parts, etc) has always been a commodity; whoever's ordering runs of 10000 Alf stress-balls or what-have-you could swap Factory A out for Factory B at the drop of a hat. (And this is why you never hear of factories in China with genuinely good working conditions; the margins are too low for paying a living wage to be sustainable for the employer. And yes, this does imply that the businesses themselves shouldn't exist.)
Also, while AliExpress/Wish/etc do make a profit, they do so on the back of a market distortion — the Universal Postal Union's special rates+tarriffs exception for ePackets shipped from China. Remove that, and such companies would collapse overnight.
I don't think they're "the top" of a pyramid. They're just selling their trinkets to whoever pays. If you want to buy a bunch of units, so much the better.
Also, I think some of this is somewhat outdated: wages in China have risen, and the really low-quality and low-wage manufacturing has started to migrate to SE Asia.
Well, yeah, that's what I said: dropshipping isn't an MLM. There's no pyramid there. It's just a race-to-the-bottom, but one with lots of hangers-on at various steps realizing they can "sell shovels in a [self-proclaimed] gold rush" to various parts of this logistics chain if they can convince them they need the help.
Surely the people at "the top" are the shareholders in AliExpress/Wish/Uber? The MLM is just a few levels, with everyone invested in making profits for the company that controls the platform.
Multi-Level Marketing has a very specific definition — it's a tree of people reselling ("marketing") stuff, on the expectation that the person at the next level will be able to resell ("market") it in turn to an even-bigger sucker. Or an end-user, maybe, eventually.
Something being an MLM, implies that the original producer of the product — either literally the factory, or the business that ordered the product from the factory as a work-for-hire to then begin marketing it — is the root node in that tree of reselling, and so is the one getting the most rich, since everyone else in the tree has part of their profits flowing back to them.
If a middle-man between the producer and consumer is getting richer than the producer is, then you're not looking at an MLM. You might be looking at some other kind of immoral market manipulation, but it's not specifically an MLM per se.
The guy who sells guides to "starting your own business" by drop shipping is not exactly running an MLM I suppose, but he's taking suckers for a ride all the same.
Unless you don't have the time/energy/learning style and want to learn about drop shipping you pay for a course. Many developers are self taught but others paid for someone to teach them.
MLM targets mostly women, not men (probably because more socialization is required for that particular kind of scam). Everyone loves easy money, we have reached perfect gender equality in that respect )
He also calls Trump and the Proud Boys MLM schemes, which shows he's using some definition completely different to the normal one. Probably just wanted to say "stupid people".
It's extremely bad in Utah's startup scene, and I'm sure that is because we are also the MLM capital of the world.
So many startups pop up and they don't even seem to have a good idea for solving a problem. It's a bunch of MBAs who think hiring a million engineers and having them build something will make everyone involved rich.
Yesterday there was a story on the HN front page about a professor at the State University of New York at Albany who acts as an expert witness in litigation, sometimes in suits against Monsanto. He is 86 years old. Some commenter called this a "side hustle". WTF does this term mean, nevermind how ridiculous it is to apply it to this gentleman.^1 What purpose does it serve to use the term "side hustle". How does it improve upon the language that already exists.
1. Generally there are very few if any "full-time" expert witnesses. Obviously to be an "expert" one generally has to have engaged in something other than testifying as an one. Some might be semi-retired or retired professionals.
True, but many pursuits are only financially advantageous for a small percent who 'make it' (startups and sports, for example). But take into account non-financial benefits too.
In startups we're pushed to solve challenges that no MBA or CS curriculum would ever have conjured, plus we have a chance at making a dent in the universe. In sports people make friends and get regular fitness. These aren't financially beneficial, but they may be enough to make the pursuit worthwhile.
But it's hard to find positives in a MLM Business. The participant is constantly stressed from short-term sales goals and has no spare time left for personal development.
Friends alienation too. There was a guy in our friends group that severed most of his relationships trying to sell Amway shit. Every time he initiated a conversation it was obvious where it will end
Similarly with ethics/activism driven NGOs (eg Greenpeace and the like), at least last time I was in touch with that part of the world.
There was a knowing extraction of youthful “enthusiasm to do good”. It became a common warning passed around much like “HR is not your friend” etc. “They will use your enthusiasm” was what I heard.
The only alteration in your formula necessary would be “struggling to live ‘ethically’“ for “struggling financially” and mutatis mutandis re empowerment/disrupting/changing the world.
Startup culture has a fake it til you make it problem.
In my journey as a 2x failed startup founder I meet many nice people, most of us were entranced by startup as performance theatre, occupying ourselves with every sort of entrepreneurial busy work except the harder work which would result in putting a product or service in front of customers, haunting an overpriced flexi-desk / office in incubator hell. And I met a few of the usual narcissists and sociopaths, scratching red in tooth and claw to become the Steve Jobs they knew themselves to be.
The only success I saw coming out of this system was an idea founded by some serious programming talent that had obvious shot at product market fit before they wrote a single line of code. Everyone else was just fooling themselves.
In this case I think using specific names and terms, tuned to a specific "market" helps trapped Girlbosses realize their situation. As the title says, OP is addressing a specific group. It's easier to think "yeah I'm not part of $group" if framed broadly as you are suggesting.
The two are sides of the same coin and both are founded in the need of capitalism to make people work more so more profits can be made and more surplus extracted.
My wife got involved in something similar that wasn’t MLM, but basically a program where you pay for training and certification (and the certification has to be renewed every year for a fee). The promise of flexible hours was also a big selling point of this new “career”.
It’s hard because to me the whole thing sounded like a bad deal, but you also want to support your spouse. We ended up just talking through our hopes/concerns, what would be an acceptable amount of money to lose, etc.
She decided she wanted to do it anyway, and I resolved to support her (basically just keep my mouth shut and not say “I told you so”). Nothing really came of it and we ended up losing an inconsequential amount of money. No regrets really.
But if it had been an MLM scheme that also required putting pressure on friends and family, or the costs were bigger, that could have been a much harder conversation.
> My wife got involved in something similar that wasn’t MLM, but basically a program where you pay for training and certification (and the certification has to be renewed every year for a fee). The promise of flexible hours was also a big selling point of this new “career”.
"My wife got involved in something similar that wasn’t MLM, but basically a program where you pay for training and certification (and the certification has to be renewed every year for a fee)."
I guess that may have led to harassing friends and family about buying / switching insurance. With agile, that's probably less likely. "Hey mom, I know you like baking, but I really think you could be much happier if you didn't just follow the recipe from A to Z but instead reacted to challenges in a more agile way."
Startups hiring early employees and asking them to have the commitment and work ethic of a founder but a tiny fraction of a founder's equity, playing up the exciting possibility of a billion dollar valuation while never mentioning the liquidation preferences and possibility of many years of illiquidity -- this is essentially an MLM and it's incredibly common among Y Combinator companies.
For Joe average, the expected value of working at a random startup is positive - compared to not working.
It's just the employee's gamble to figure out whether the expected value is high enough and the risk ratio is aligned with their preference.
The expected return for an average MLM joiner is deep in the reds.
From an individual perspective that's a huge difference.
But it isn't multi-level marketing (MLM) until he starts pushing some product onto his peers, or unless the employer starts hiring aggressively with equity as the main salary.
Employees have a better overall risk / reward ratio, as they usually do receive salary, unlike founders, who often invest their own money and have negative effective salary. So them having a higher equity is fair.
Many crypto "communities" that reinforce an in-crowd mentality and simultaneously pitch buying into a coin/NFT as a path to financial prosperity are stunningly similar. They generally just target male aspirations instead of female ones.
"#girlboss" (and the possibly even more nauseating "#bossbabe") are what some of us feminists (oooo, scary word) describe as "empowerful": something that sounds superficially like it makes women more powerful or freer, but absolutely doesn't, instead actually contributing to making things worse for most women involved, trapping them even more firmly in the situations they're trying to escape or improve.
I think "empowerful" isn't the best term for this phenomenon, as it's used widely for all sorts of things and programs that are anywhere from helpful, to probably well-intentioned, to unironic examples of the very thing I described.
People who promote themself as some kind of a community leader beyond their actual role have a massive chip on their shoulder. If you report to them, you can bet that ego's going to be nauseating, including the random power moves.
MLMs abuse key social instincts of a human (“we are family” and all that junk) and use them against other humans in order to profit higher levels of the scheme. Socialization itself is hijacked for the purpose of making sales, because that’s how the victim stays afloat. Every time I see it in person it’s sad to observe.
Yeah, but those MLMs are really a magnitude different and take this to cult like levels and use awkward psyche tricks.. if you never experienced one personally direct or indirectly and think this is similar to the normal work world (even startup craziness is not comparable, really) just feel free to visit one of their recruitment meeting shows.
(My mother got into one 20 years ago and dragged some people with her in, fortunately she was the only one with significant money investment lost..).
Indeed. Some companies tread out some light pablum around “we’re a family,” but MLM schemes weaponize human relationships and social conventions for profit.
The MLM metastasizes through social networks and often damages them pretty significantly. Having a personal relationship turn into an avenue for sales pressure is very dispiriting.
I would immediately ask "you mean with transparent financing, equal standard of living for everyone involved and taking care of each other even when we are sick or miserable?".
I don't think business must be ruthless. If it's a coop...
Only in the most technical sense. Consider LuLaRoe (I'm only 90% sure I've got the name right, this might be a different MLM); you pay for your own inventory, and then they ship you a random bag of clothes. If a certain pattern sells really well - you have no power to order more of it. If a certain pattern doesn't sell at all - you have no power to nix it from your future inventory.
You absolutely got the name and the “business” model right.
If I never again see a “super cute!”, eye-searingly gaudy pair of leggings or other clothing being flogged online by one of my sweet but socially-susceptible high school classmates, it will be too soon.
I think most people in MLM do know very well what they get into. They just think they are smarter than the others who will be still in that game when it falls apart. Recruit, cash in, leave. Of course, they'll also play the victim card as soon as it turns out they aren't as smart as they thought.
I'm kinda surprised at all the hatred this unleashed. I do think MLM's are a scam, so I can't disagree with any of it. Except this:
Have a little empathy with all the poor suckers at the bottom. They're trying to better themselves, and most of them are kind, hardworking people. It's too bad the MLM pushes them to become exploitive b_stards, and it would be nice to use all that energy ethically instead of just shutting them down.
I don’t know if Mary Kay is different than others but have known several women that made good side money with it, one that earned enough that it was her only (well-paying but not fu money) job. I mean, recruiting others as essentially a sales team isn’t that much different from the typical upwardly mobile corporate career track in the sense of expanding one’s sphere of responsibility and influence and getting compensated for such a progression.
~98% are making ~$255 or less PER YEAR in commissions. And then losing a tonne on expenses.
Then the ~2% making ~$25K/year in commissions are likely making a lot less once you account for expenses.
Only “Independent National Sales Directors”, ~0.044% of the salesforce, are making a good income. So about 1 in 2000, with the other 1999 making somewhere between “not much” and “large losses.”
FWIW, these numbers aren’t unique to Mary Kay, they’re pretty typical for MLMs. There’s some decent studies out there on MLM earnings, and all the big MLMs are reasonably similar. An exceptionally small number of people making legit good money, a small number making a little bit (still worse than minimum wage, after accounting for expenses), and the vast, vast majority losing money.
The key is there has to be a decent product at the end for an OK price. Makeup has a high enough retail margin that it can absorb the MLM overhead while being somewhat cost competitive.
My ex was into Mary Kay. We lost a lot of money on it, but I wouldn’t say it was particularly abusive.
> We lost a lot of money on it, but I wouldn’t say it was particularly abusive.
I don't know, if a business partner or employer really has no prospects for compensating you for your effort and doesn't level with you about that, I'd call that at least dishonorable if not dishonest and, yeah, abusive.
I worked at an “MLM” (we called it Direct Sales) SaaS company for a decade. We provided an e-commerce and commissions platform for many of these companies that you’ve probably heard of.
I’m well aware of the criticisms of the industry but it surprises me that no one ever tells the story of the hundreds or thousands of women in each of these organizations that are variously getting rich, making a living, or getting decent side money doing this.
Maybe they’re all exploiting the women in their down lines. Fair. But why are people reluctant to tell their stories?
I promise you - with the women at the top, there’s a lot of cocaine and sex and wild stories to tell. But that doesn’t seem to be enough of a draw for anyone to show a balanced picture.
Maybe because MLM advocates tell these stories 24/7, both in media and private conversation? Why does no one talk about Madoff actually being a great success (for a while), at least for himself and the people around him? It's easy to fall for these schemes, and there is no incentive to talk about the failures - so most you hear are the success stories.
> no one ever tells the story of the hundreds or thousands of women in each of these organizations that are variously getting rich, making a living, or getting decent side money doing this.
Because in these scale-free networks, each incremental person who is successful harms incrementally more people. For the network to grow, it must produce an ever-expanding long tail of losers. Nothing to celebrate there.
There are people getting rich. They are getting rich off of the poverty and misery of the people below them. This isn't a story of empowerment and success. It is a story of grift, abuse, and greed.
There was a series with Kirsten Dunst named “On Becoming a God in Central Florida” about the subject but somehow it didn’t grab me in the first couple episodes. It looked like yet another look at the industry from the bottom up, where the more interesting view is from the top down.
(I'm just curious about your perspective because I couldn't work at a place like that, so I'm trying to understand. I'm not looking to pass judgement or get into an argument.)
I am not sure. When an MLM is new and hot, it grows rapidly and there’s a lot of success for a lot of people. But there’s always a lot of churn at the bottom level, and if the organization isn’t growing, it’s dying.
I saw all this mostly from a detached view looking at tables in a SQL database, with the occasional glimpse of in person convention Bacchanalia. Many of my friendships and much of my professional network were forged in my 20s in this industry so this colors a lot of my views.
I'm not going to try and convince you of anything, but I'll offer my perspective to you. My guilty pleasure is watching MLM debunking videos, so I've happened to see a decent amount of MLM recruiting and training material. (I've known a couple people involved with MLMs, but not anyone I was close with, so I can't really say it's touched me much personally.)
Honestly I find it chilling. It's not just how they are manipulative with the people in the MLM, but how they coach them into manipulating their friends and family. They give them scripts to twist the language of love and support into cash transactions.
This is a tame example but the only one that's top of mind at the moment. I was watching a video the other day, and they said something like, "your friends and family need to understand that your launch party is a big deal. You're launching a business, and they need to be there to support you. Ask them if you can count on them to be there to support you."
And I just can't help but imagine getting a phone call from someone in my life, talking about how excited they are about something new they're up to, and then the feeling of dread as I realize what's happening.
"Can I count on you to be there to support me?" How do you respond to that? If you agree, you're enabling them to make a terrible decision, at what's probably the best time for them to turn back. If you refuse, you're hurting their feelings and pushing them away, into the waiting arms of their manipulators, and the line between MLM and cult can be pretty blurry.
>Maybe they’re all exploiting the women in their down lines. Fair. But why are people reluctant to tell their stories?
Fair? You have just explained that its fair for the workers at the lowest and lower tiers of any company to be exploited.
MLM is just a type of business, Ann Summers in the UK and Ann Summers parties is another example besides the US Mary Kay, how ever unlike Mary Kay, Ann Summer parties were exposing kids to sex toys and lingerie, especially as some of the poorest lived in small homes with no where to hide the "sales catalogues" and the toys, or the disruptions to kids that ensued when you got a group of sex starved women together round a house.
Remember the world hysteria comes from the Greek word hystera which means uterus as in hysterectomy.
In general the MLM's that tend to work is because they rely on the sales persons buying into said products. Female MLM selling female jewellery, I think there was a jewellery company called Pandora that did this, female MLM selling cosmetics eg Avon, Vorwerk vacuum cleaners being another.
Thing with MLM is its just a particular way of selling products, some are like franchises like McDonalds in that you have to hand over money before accessing the brand's products to sell on. Some are door to door, others are established in their own bricks and mortar retail outlet of sorts, other online only, or sometimes both.
MLM is just one way of getting staff lock in and selling to the public. IS it any more exploitative than other methods? Thats a legislation issue, just like uber and the london black cab drivers have found out.
Politicians can screw over groups of people with the ballot box.
I once read that business is the art of ripping someone off without pissing them off, and I've since made that a part of my life philosophy because it's very accurate.
These businesses are simply more devious manifestations of that art.
Except in this case the strong person fully disclosed up front that they would most likely take the wallet and run, but there is a chance they would give it back with twice the money. The weak person still made a choice.
Well when you put it that way, we have lots of regulations surrounding gambling for precisely the reason that a significant fraction of people hopelessly "fall for it".
They discuss exactly this question in a lot of detail. The FTC had started to go after some early MLMs, but then strong lobbying and political connections created a situation where you could have a "legal MLM" by following some rules, and the rules were basically written by Amway.
A guy I knew many years ago was a compliance officer for an MLM company - basically his job was to ensure the people in the system were not breaking the rules. He told us explicitly once that he’d never buy or sell the company’s product. He knew that MLMs were a scam.
It’s odd to me, because he was a super standup guy in everything else - this part of him always struck me as out of character
Its just another "life-your-dream" scheme. Thats what old artists and old bohemians resort to in the bitter end. You scam the youth of tomorrow to have something to life from.. the dream is interchangeable, music, modeling, game-design, movies, fame or business acumen.
It also always turns into something sour, probably repressed guilt, trying to scare the youngsters off.
My girlfriend is successful as an independent massage therapist, after working many years in day-spas where she had to accept lower wages and give up a lot of her income. Because she's successful, she's constantly being hit upon by female friends either inviting her into schemes or asking her for advice. (Some of these friends, she helps do their taxes - for free, because these 30-something women can't figure it out - but she doesn't give them financial advice).
Knowing a lot of these people and watching their schemes get derailed, I've come to a few conclusions.
1. Financial literacy basically doesn't exist. It's a miracle that my girlfriend taught herself. I'm not one to say that it's being intentionally suppressed in our educational system; I think the people who teach and write curricula are equally unequipped, so it's just a generational problem now in America.
2. The most paranoid / suspicious / likely to believe conspiracy theories are the ones who fall hardest for obvious ponzi schemes over and over. It's not clear to me why people who wouldn't accept a sandwich from a stranger are willing to put their life savings into an obvious scam (other than low IQ?)
3. It's brutal being a girl who gets into her 30s with a few kids and has no money and no prospects. Big companies hiring these women thrive on their desperation, so they're tolerant of smaller scams screwing them over and perpetuating the sense of there being no creative/industrious outlet for them.
4. Women's lib has been hijacked to the point that it's just another excuse for oppressing American women. This doesn't have to come in the form of workplace discrimination at Google. It's that the very inclusiveness of Google gives an excuse to the rest of society to dump the worst tasks and the most burden on women, with the excuse that everyone's now equal. That combined with a serious deficit in understanding the complicated schemes taking advantage of people results in this head-shakingly bizarre situation where tropes like "taking control of my life" are, over and over, just joining the latest iteration of Avon or tupperware parties.
So not to just sit here and complain, I'd offer a couple solutions:
1. Bring back real accounting and home eq classes
2. Have serious discussions in school about the life-altering consequences of early pregnancy
3. Tech companies need to take an active hand in labeling these things as MLMs or viral fads or simply not good investments
4. Women in their 30s-50s, who are a huge driving force of our economy, need to have paths to advancement that don't require going through get-rich-quick schemes, and this isn't something that can be accomplished by a few companies trotting out female VPs of marketing or something. Equal pay isn't enough; equal opportunities are what's needed.
A final thought; Jan 6th was supported by as many women as men. So was the Nazi occupation of Poland. Women can't be discounted as a force of political disaster if you create an underclass of so many disenfranchised people. The growth of these schemes among women is a very bad sign for our future as a democratic / market-based polity.
> It's that the very inclusiveness of Google gives an excuse to the rest of society to dump the worst tasks and the most burden on women, with the excuse that everyone's now equal.
I agree with literally everything else that you said except this one snippet. Women still aren't taking jobs that kill them and they're still not taking jobs that give them PTSD and cause them to commit suicide.
If you think the worst tasks and the most burden are being given to women, please remember that we're talking about office work exclusively and not hard, body/life-destroying labor.
Men just aren't complaining about it.
Also workplace discrimination at Google is equally as likely to go the other way. Every tech company that I've worked for has boldly and loudly claimed that they pay women more money for the same roles as their male peers to counteract the gender pay gap. Even the hedge fund I worked at 15 years ago made it very transparent that women were paid 4-8% more in the same roles.
I wasn't saying that women's office jobs are killing them. I'm coming from a place where most women don't have white collar jobs, and are barely able to hold blue collar jobs. But the "self-improvement" mantras they're plied with that make them feel inadequate, often rely these days on narrow examples of successful women in tech. They're sold this idea that it's all equal now, because if these women can do it so can you.
A pertinent digression: I know 4 women in their late 30s who are currently enrolled in IT courses at community college. None of them are for standard IT stuff. It's like, "Info Security" (how do you do that without coding?), "Intro to Artificial Intelligence", etc. These women have kids and come from things like - nail salon, lash girl, massage therapist, woo-woo crystal shop owner. The trend is unmistakable: The lifestyle of tech work as a white collar path for women which does not actually exist is being sold as a path out of poverty. I do know one woman who did 6 months of serious bootcamp from nothing, taught herself JS/React, and has a good job at a Fortune-500. But she's a severe nerd and has the wiring for it; she can sit there and talk to me about underscoreJS versus JQuery. The others I know ...it's just an idea, like becoming a rock star or something.
That was what I meant. It doesn't negate your point that men aren't complaining, and I wasn't trying to say that the biggest burdens in tech were being given to women, just that this is dangled out there as a means to freedom and it's almost completely a rip-off.
On point 2 it’s been my observation that people who believe in conspiracy theories are often quite arrogant. i.e. they believe they have secret knowledge that the rest of us don’t have. MLMs exploit this arrogance.
every MLM pitch deck and huckster knows how to dismiss that elephant from the room. simply stroke the mark's ego by assuring them that the overwhelming rate of failure in $MLM is due to the weak-willed who did not try hard enough, think big enough, or stick with it long enough, and this is thus their chance to distinguish themselves as one of the "blessed" few who reaped well-deserved rewards of hard work, goal setting, etc.
What people think they deserve is a little like pain tolerance. Do you ever have pain and think, should I be screaming right now? When other people say they're taking pills for chronic pain, are they describing something I shrug off every morning, or maybe is their experience of the exact same feeling so much worse, or have I just yet to experience that much pain? All the variables are subjective; no one knows. There's no counterfactual.
Same with people's perception of "deserving rewards".
Tl;Dw this man has been involved with ponzi-MLM after ponzi-MLM, and after coming on Coffeezilla to discuss one that's just blown up - it comes out that he's already in another one. But as he's fallen for scheme after scheme, he's also built a network of equally gullible people (he's a financial educator (!!!)) - so he actually ends up being pretty high up in the pyramid and making money.
Who knows what reflections he may have had after this interview and what changes he may have made to his life, but when Coffeezilla tries to explain this to him in the interview, it just sort of rolls off of him. (Iirc anyway, I haven't watched this interview in a year.)
Hah. I have a friend like this and we find it hilarious. Literally every time a cryptocurrency or a meme stock blows up, he's shot himself in the face.
Not for nothing, he's also prone to talking about taking radical measures to protect his kids from climate change, and doesn't feel it's worth living if the climate warms up by 3ºC.
He's one of my oldest and best friends, so I've spent a lot of time thinking about where this all comes from. His grandfather was an SS officer (and I'm a Jew- my grandparents, of course, were also Jews)... his father, a wonderful human being, and a serious anti-racist Austrian. Yet this form of obsession continues.
Timothy Snyder makes some great remarks in "The Black Earth"-
"There need not be any compelling reason for concern about life and death, as the Nazi example shows, only a momentary conviction that dramatic action is needed to preserve a way of life. [...] Perhaps the experience of unprecedented storms or relentless droughts will jar expectations about the security of basic resources and make Hitlerian politics more resonant. As Hitler demonstrated [...] humans are able to portray a looming crisis in such a way as to justify drastic measures in the present."
No one is immune from this kind of thought process, but all of us should be immunized by our socialization with one another. And rational investment (as opposed to irrational risk-taking) is a security token for society. The opposite is a bet against a rational future.
> The most paranoid / suspicious / likely to believe conspiracy theories are the ones who fall hardest for obvious ponzi schemes over and over. It's not clear to me why people who wouldn't accept a sandwich from a stranger are willing to put their life savings into an obvious scam (other than low IQ?)
Affinity fraud. Pretend to share the Mark's beliefs as a shortcut to building trust and then scam them.
Most women in this country don't live in SF, Seattle, NYC or LA. Most women in America have kids by the time they're in their early 20s. These are the women who are emerging after 18 years and trying to find a way into tech jobs. And failing that, are falling for ponzi schemes and memes.
Intelligent people, male and female, can be driven to emotional and mental instability by social media and can be ripped off by scams. The narrative you're trying to dunk on only exists inside your head, along with the straw feminists who seem to live there, rent free.
Criticizing the "girlboss" fad even a year ago would have been a bona-fide way to end up jobless and blacklisted. Glad to see a few people are finally using the term for what it deserves: a joke.
> Criticizing the "girlboss" fad even a year ago would have been a bona-fide way to end up jobless and blacklisted
This article was written in mid-2020. I don’t know how the article was received at the time, but presumably the author was not blacklisted or fired for it.
She’s a fairly young freelancer from UK. Looks like a lot of her stuff is pretty “fluffy,” and not my cup of tea, but she hasn’t been “canceled,” as far as I can tell.
She can be easily found on the Web (I won’t directly link to her stuff, but a quick google brings it up).
Now that I routinely read stuff generated by LLMs, I suspect it everywhere. That line about it "even" being on Schitt's Creek somehow tripped my "nice try, robot" response. The idea that LLMs are going to replace this kind of fluffier journalism is seeming more plausible to me.
> Until we all begin to acknowledge there’s more to life than “the hustle,” and that struggling financially is not a personal failure, MLMs will continue to recruit and exploit aspiring girlbosses under the guise of female empowerment.
You could easily change that to:
> Until we all begin to acknowledge there’s more to life than “the hustle,” and that struggling financially is not a personal failure, startup culture will continue to recruit and exploit people under the guise of [getting rich, disrupting tech, changing the world, etc.].
I mean, it’s not an organized thing like an MLM, but I see a lot of the same toxic language and behavior around startups.