10 Steps to a Perfect Scam: How cults and pyramid schemes work the same

The List

Multi-level marketers aren't all greedy slavering jackals nipping at your checkbook's heels. And not all of their minions are as dumb as the henchmen in Hollywood movies are. The fact of the matter is effective marketers are way too savvy to allow their image to manifest in such an unsavory way. The truth is clever marketing works in much the same way as does a purposefully launched cult and the believers are often kind, well-meaning people who have been meticulously led astray.

Here's the list of the 10 things required to start a cult or a multi-level marking scam:

  • 1. Charismatic leader
  • 2. A good story
  • 3. A good show
  • 4. That first sucker
  • 5. Bring on the testimonials
  • 6. Swell the ranks
  • 7. Give praise and succor to the believers
  • 8. Defend assaults from outside with ambiguity, sweet talk and open arms.
  • 9. Take checks to bank.
  • 10. Laugh silently when no one else is around.

1 and 2 – (a charismatic leader and a good story)

All you need to start a cult is a charismatic leader with a good story to sell. Someone who has some decent insights into some great or even not-so-great human need. For the cult leader, it's spiritual access to some secret universal sphere, or communication with the aliens following the meteor around, or access to some savior figure in some magic place... whatever. Just something mysterious and that needful people might find easy to want to believe, something they couldn't do before they met this person and his or her wonderful idea. Something they would like to be able to feel or do or know.

A good, charismatic marketer does the same thing, promising access to a different type of mystery, the mystery of getting rich or powerful through special learning whether it's about wealth building or amazing fuel efficiency, maybe a cure for baldness or how to make money online. Who knows what it is; it's usually their creativity that gets the whole thing off the ground. They have a business plan or program that if you learn it you too will be an amazing financial success (or something), or at least well on your way - (That's the line I always love. If I take one step to my left I'm well on my way to France too even though I'm in California right now.)

3 and 4 – (the show and that first sucker)

Outside of charisma and some "essential insight" the key component for people who want to start a cult or be at the tip of a pyramid scheme is that their story needs a grain of truth; they need something genuine to weave together the web of lies and lunacy, and whatever is being promised, it has to seem easy. Not like stupid easy, either. The leader has to create the illusion of some effort going in for the sake of reality, but ultimately, rewards have to seem attainable easily and without believers having to take the conventionally gradual steps that credible and proven institutions like universities or time-honored religions are endlessly putting forth. Cults and scams usually present something that is "gradual" too, but amazingly, it's always a much faster form of gradual than those other old fashioned ways.

This is where "the show" comes in, and how they get "that first sucker" to buy in. For a cult leader, this often involves the type of trickery seen at fairs and fortune telling demonstrations or even at magic shows, although that is not always how it is done. Done right, actual truths can be revealed and hyper-interpreted to give meaning to the core idea, or at least certainly seem to be. It's mostly smoke and mirrors (in premise or in fact) with some basic psychology... mix in a good show delivered enigmatically by an artful and charismatic leader, and with an audience's need for answers that aren't otherwise easily to be had, and BAM a cult is born.

For scammy marketers, the situation works much the same. Some razzle dazzle numbers presented well, and especially in areas of technology like the Internet where most people who buy into this stuff have no idea what illusions a clever operator can perpetrate, and the next thing you know they have believers buying in. They just need enough truth to make the idea plausible and initially verifiable and the optimists start pouring in. I would call them hopeful and naïve but behind closed doors these kind of scammers have been calling them "suckers" for many, many years. "There's one born every second," is how their old saying goes.

The leader just needs to continue administering the right dosages of this plausible reality while all the time stroking the ego and optimism of the members, particularly the new recruits and eventually he or she can grow the flock big enough to launch to the next phase. You just can't give them NOTHING, however, so it's very important that there at least be some scrap of truth to bait them deeply onto the hook. For the most part though, if someone needs or wants the big promise bad enough, a leader really doesn't have to give them very much. Any morsel will do, and hope will fill in the rest.

5 , 6 and 7 – (bring on the testimonials and swell the ranks, then give praise and succor to the believers)

Once it's underway, a successful cult will thrive and develop a sense of community if the leadership consistently pours praise and positivity onto the flock along with these tiny seeds of truth (sometimes fear is used, but let's not get too far off track). The leadership must constantly lavish approval and a sense of well-being on them, just as one might do to a child or a pet one wants to train, until he can finally get them to believe. Pavlov's dog studies underscore this behavioral element of what's at work. Dogs learn that the sound of a can opener is akin to food and they begin to drool automatically. People can be trained in the same way if they are fed positive stimuli upon performing a given behavior or task.

In the case of a marketing scheme, pointing out how well progress is coming in learning the materials or techniques of passing along the scheme, or rewards for how many new recruits have been brought in is rewarded with recognition, often publicly for other cult members to see so as to enhance the neurochemistry. Whatever the rewarded behavior is, it's always in keeping with the program being pushed and the behavior (in a marketing scheme for sure) is never rewarded with any actual wealth. If there is a monetary reward, it's always a pittance that seems to teeter on the brink of some imminent cash cascade if the follower can just get to that next big step, a taste but never a feast. The big rewards are always at the end of that infernal stick.

The Mastery of Praise

It helps a charismatic leader if the people he or she is working on are honest and trusting folks who are willing to work very hard and who can't help but try to see the best on others constantly. Trusting people are by far the easiest to take advantage of by the very nature of who they are. Many are quite intelligent, and because of this often feel that they are safe. But they aren't, because the root device being used is recognition and praise, which as Maslow pointed out, is a very important human need. So don't be fooled into thinking that adults are past wanting to be praised. It happens little enough in our older years, and most are far hungrier for it than they will ever say out loud.

The real art of this love lavishing, however, is in doing this with extreme subtlety, particularly in a marketing scam or pyramid scheme. Leadership has to be delicate enough to not go about it too obviously, but this is not hard for certain personality types naturally attuned to this type of thing. In fact for some people this kind of manipulative subtlety comes quite naturally, even intuitively - often it's the thing that makes them charismatic to begin. And if they have any depth of study in psychology, theology, anthropology, sociology, marketing, or, heck, even literature and art, one of these personality types can really get their cult or multi-level project off the ground.

Once the community is formed, it becomes easier to keep the snowball rolling if the original idea has any plausibility. Done right, with a large enough core of supporters, even the smallest success or piece of evidence can be trumpeted loudly for everyone to see. And the tight knit community becomes a thing of glue. Once people are accepted in a bond of mutual belief and acceptance, and are made to feel empowered by it, not only are they no longer able look at it objectively, they will fight ferociously for the collective pride. It becomes normalized and any attempts to point out flaws in it will be taken as personal attacks.

8 – (Defend assaults from outside with ambiguity, sweet talk and open arms)

This is where the real genius of the founder comes in, and it's an insidious thing in the workings of a cult or rip-off enterprise. Done properly, the members of these schemes will not allow any kind of attack on the foundation of the system they have bought into, for to let such accusations fly implicates those very followers themselves. Recognizing or admitting that the core idea is false or even flawed insinuates that they are dumb or gullible. And while this may not be the case in actuality - they've merely been exploited through the avenues of their own faith in the good nature of others and their own kind humanity - at this point it is probably too late.

The cult leader has locked them down by their own psychology and they won't admit that they've been duped even if they wanted to, even if their minds were actually open to see. The thought becomes too humiliating to even entertain. Denial comes into play. There is essentially no chance for them to have an honest look. The logic and reasoning of their leader and the social network that keeps them buoyed emotionally will sustain them far beyond genuine reasoning, it has to because there is simply too much invested and at stake. It becomes faith based and no longer subject to logic or perspicacity.

9 – (take the checks to the bank)

In many ways it is difficult to see what could possibly be wrong with this hugely powerful communal bond. If something makes someone happy and fulfills some inner need that they might have, even if it's only just the hope of salvation or gaining Internet wealth some day, how is that a bad thing?

Well, that is exactly the foundation of the cult leader or marketer's defense. Plausible deniability. A clever leader of one of these operations can spin attacks on his methods like no White House press secretary ever could. These guys pretend to have the moral or personal interests of their followers at the forefront of anything they do, and that's certainly what they say out loud. Everyone knows the standard felon's attitude towards the lie: Stick to your story and deny, deny, deny.

But these guys aren't "standard felons" at all. They are clever, intelligent and insightful; they understand people in all their emotional and biological simplicity (complex as we are, we are still pretty predictable in many ways). All they have to do is speak softly and with love and compassion and patience, emulate people that society has learned to trust, even offering sympathy for the lack of understanding their critics suffer from. They pity naysayers politely behind falsely smiling teeth. They grin and nod and maintain their angelic outward calm. Soon their followers will surge to the forefront on their behalf as emotions sweep any chance of reason from the field. Their minions fight the battles while these charlatans take their money to the bank.

And that's how it works.

10 – (Laugh silently when no-one else is around)

Multi-level marketers aren't stupid which is why they laugh at how gullible people are. They get this stuff I've outlined as clearly as I do. They don't even care if you do too. In fact, they laugh even when they get caught, because they can dash off criticism so gloriously easy by pretending it's them taking the high-road once again. Poor martyrs that they are. The best way to discredit an article like this very one is to point out how negative the criticism is. That's the oldest one in the book. But if that becomes too simplistic, a typical defense goes something along the lines of this:

Shadesbreath is clearly, and unfortunately, cynical. He's obviously trying to do what he thinks is best for his readers but he confuses our beliefs with something that we expressly forbid to happen in our (school, system, compound... whatever). We at Marketing Cult, Inc. are not in this just for the money. Not at all. Obviously money is useful, but truth be told, we're here because we honestly believe that everyone deserves a chance at happiness.

We understand how, in a world that is so angry and quick to judge, our methods might seem too good to be true. But they are not. We work very hard and every one of our members knows that they have so much work to do. We don't try to fool anyone. This isn't an easy path, and for some it may even prove too hard, as has been seen in the actions of a few. But with effort and dedication, and with the support that our community ultimately provides, and with the guidance our fine leaders, our members will eventually find the successes that they are looking for. And they'll make some friends along the way. We're sorry that Shadesbreath has found so much insincerity in the places he has gone along his path through life, and we sincerely hope that he finds trustworthy people somewhere along that road. He's even welcome here with us, should he ever feel interested to try.

You see how nice that sounds? I can dismiss charges of profiteering easily with a glib "obviously money is useful" and then misdirect on to something else. Lots of squishy feel-good nonsense that says nothing really fills in the rest. And it's all so nice. Who doesn't want someone that kind and welcoming in their lives?

Unfortunately, all of that up there was crap. It sounds good, and it would be good if it was said in sincerity, but since I can come up with a spiel like that just off the top of my head as a writer using tricks of language and authorial voice, imagine what a marketing team could compose in response to some attack on its insidious ways. Notice how there is not one negative remark about Shadesbreath outside of "cynical" and how everything is couched in kindness, acceptance and love. That's called rhetorical device. Not all rhetoric is nasty or obvious.

These kinds of people aren't obvious at all, they're subtle as all get out. Look, nobody with something of value to sell talks like that, and these guys know it. It's a form of reverse psychology that's been around in snake-oil selling and cult conversions for at least a zillion years. "If I don't sound like a salesman, they'll never know I am." But don't be fooled. Crocodiles don't cry. Snake oil doesn't cure baldness or consumption, and none of the other stuff that is obviously garbage works either. Just know what you're looking for and watch out for people who will take your money while telling you they only want to help. Nobody is that nice. And if they are, they don't want anything from you at all. Especially not your cash.

Once again, the List

Here's the short list of what these scammers need once again:

  • 1. Charismatic leader
  • 2. A good story
  • 3. A good show
  • 4. That first sucker
  • 5. Bring on the testimonials
  • 6. Swell the ranks
  • 7. Give praise and succor to the believers
  • 8. Defend assaults from outside with ambiguity, sweet talk and open arms.
  • 9. Take checks to bank.
  • 10. Laugh silently when no one else is around.

Don't throw your trust around too casually. I'm an American and believe business can do great good. Capitalism, frankly, is an idea that is music to my ears. But be aware that the sweetest voices singing it are often the nastiest villains of bunch.

More by this Author


Comments 87 comments

Eric Graudins profile image

Eric Graudins 8 years ago from Australia

You're good. This is an excellent analysis.

Methinks that your involvement with a recent hub of mine may have inspired this one. A bit. Somewhat.

And you forgot about appendix 10(a): If you can fake sincerity, you've got it made :-)

Regards, Eric G.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Hmmm, perhaps just a coincidence? These things are so hard to pin down sometimes. lol.


Eric Graudins profile image

Eric Graudins 8 years ago from Australia

After the knives I've removed from my back, pins aren't really a problem :)

Here's another important rule:

Gain an instant air of credibility by association with a recognised authority symbol.

Have something like "College", "Institute" or "Church" as part of your name.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

If you refer to the deluge of orchestrated marketing that your hub got as "knives" I feel you man. That was a hell of a wave. Got to give their charismatic leader props for running his system well. Clearly not a novice, that one.


Eric Graudins profile image

Eric Graudins 8 years ago from Australia

Yes knows what he's doing.

Wonder if he'll reply to my latest post to him?


pgrundy 8 years ago

I absolutely loved this hub. You nailed it, every last bit of it.

I had this job where I wrote copy for this MLM site--not a site for a single MLM scheme but a kind of MLM directory (who would want to go there? I don't know, but the guy is doing well with it)--it was my first paid work writing online, and it felt like cleaning toilets. I still cannot believe the number of scammers out there right now, it's insane.

The religious cults are even scarier to my way of thinking. But you know what I find interesting is that even at my 'normal' wage-earning job, a lot of these techniques are employed now. It's a huge corporation, and even though it is almost impossible to sell anyone anything doing the work I do (I'm in a big bank's call center so all we do, I mean ALL we do, is talk to people who are insanely, slavering-at-the-mouth angry, poor, and overdrawn on their accounts)--even though selling to these people is a nutso idea, a few years back the CEO decided to make service reps sell and base our entire performance pay on this. We are at the absolute bottom of this pyramid. We have to sell millions of dollars in investment products to see even a couple hundred bucks our paycheck--meanwhile, our last CEO (the one who had this brilliant idea) retired with a $146 million severance package just as the bank's stock was tanking--It went from $38 to around $4 a share due to his investments in subprime lending products and subprime investment products.

So clearly, we at the bottom have almost no shot at real money, and yet there are people there who are slavishly loyal and believe they will indeed get rich. Any attempt to point out the obvious is met by full-on attack-mode gaslighting--as in, "We're so sorry Pam that you can't see the opportunity in this. If would only your change your attitude the money would come...it starts on the inside, you have to change yourself. We want you to succeed, we really do, let's go over your performance again..." At which point I'm coached to stop using the toilet or something like that.

Now they have us working off the clock about three hours a week, grubbing for missed sales. When I pointed out that working hourly employees off the clock is illegal, all the employees started to get worked up (because we all know it's true) and management flew immediately into frantic obfuscation and BS and the disclaimer "no one works off the clock when I'm in charge, I promise to make sure that is absolutely not happening!" And then nothing changes. We all still work off the clock about three hours a week, or else.

Even in this economy they turn over employees like so many pancakes. Fresh meat every month or two. They don't care.

I think America has turned into an MLM scheme sometimes.


Eric Graudins profile image

Eric Graudins 8 years ago from Australia

@pgrundy.

Ouch. No wonder you write hubs to try and stay sane!

Anyway, you've probably seen this before, and it probably is similar to the thinking in your bank.

===============

It's been a frustrating week, and I'm reminded of the tribal wisdom of the Dakota Indians, passed on from generation to generation, which says that when you discover that you are riding a dead horse, the best strategy is to dismount.

In modern education, government and business, however, a whole range of far more advanced strategies are often employed, such as:

1. Buying a stronger whip.

2. Changing Riders.

3. Threatening the horse with termination.

4. Appointing a committee to study the horse.

5. Arranging to visit other countries to see how others ride dead horses.

6. Lowering the standards so that dead horses can be included.

7. Re-classifying the dead horse as "living impaired".

8. Hiring outside contractors to ride the dead horse.

9. Harnessing several dead horses together to increase the speed.

10. Providing additional funding and/or training to increase the dead horse's performance.

11. Doing a productivity study to see if lighter riders would improve the dead horse's performance.

12. Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead, and therefore contributes substantially more to the bottom line of the economy than do some other horses.

13. Re-writing the expected performance requirements for all horses.

14. Promoting the dead horse to a supervisory position.

I'm thinking that seeing the horse is already dead, perhaps you sometimes need to put a bullet in the rider.......


silvalinings profile image

silvalinings 8 years ago from Richardson, TX 75080

I see your point. The facts are that 97% of MLMers will fail. A lot of these people are recruited on false expectations and dreams of making money quickly.

Here's the difference as I see it between the "cult leaders" and the legitimate teachers/business people. In recent weeks I have personally met with several entrepreneurs who are considered leaders. You can buy their training materials or go to their seminars. The really successful ones provide iron-clad money back guarantees with a reasonable time frame (usually thirty days but some offer up to a year). They put up a lot of training materials and/or ebooks for free so you get some sort of idea of what you're getting before buying anything. Then they back up their guarantee by offering even more than your money back - they PAY you for wasting your time. I stood to make $1500 this past weekend for a training program I attended in LA. Some people found the program was too intense and did take the money. As for me, between the software products I received, resources I was going to buy anyway, and the business partners I met, I more than made back my investment and that doesn't even include the actual training.

Alluding to Mike Klingler as a "cult leader" is unfair and inaccurate. He is also one who puts his money where his mouth is. He is doing everything humanly possible to give the best training possible to people who don't know how to use the internet. The bulk of his University members are attending for free, yet they still qualify for help beyond the group classes. I provide a ton of free counseling to members. He has invested a lot of money to help promote the individual work of his students, not his university. Before he started the University, he was known as a person who would freely give of his time to help other people learn how to grow their business.

You are not alone in your distrust -- unfortunately, there are a lot of scams and selfish people out there. But it is not fair to lump every network marketer or every industry leader into the same category. There are people trying to do good. There are people trying to turn the negative image of the industry around by providing a solid training ground in an ethical way.

I got burned big time my first six months in business. I was VERY careful about where and with whom I invested my time, money and trust after that. Mike is the real deal. And there are others out there. He's not leading a bunch of mindless sheep. And he is not Little Boy Blue napping behind the haystack while the money rolls in. No one works harder, gives more, or has better intentions.

Surely you can find a better way to use your talents than to continue to make fun of something you don't know enough about. Generalizations are one thing - but if you are going to single someone out, do your homework. I gave both you and Eric the benefit of the doubt - I went to your hubs, I read and found value in your writings. But on this one...you're DEAD WRONG.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

LOL I haven't seen that before. That's funny, ERic.

And, PGrundy, that job seriously sounds like it sucks ass. I hope you're shopping your resume around.


CJStone profile image

CJStone 8 years ago from Whitstable, UK

This is brilliant Shadesbreath. I thought I'd already left a comment on this hub, but it seems to have fallen through a crack in the floorboards. I just wanted to point you to Bard of Ely's hub about Scientology, which completely fits the bill for all of the above, with the odd exception of the first: that is, when you actually hear L.Ron speak he is curiously without any kind of charisma. Which is probably why he hid himself away for so many years. http://hubpages.com/religion-philosophy/Bard-of-El...

But a great hub. I also think that all of the above applies to the current political and economic system on a grand scale. In my terms (something that occurred to me recently) capitalism is a cult which we all have to be deprogrammed from.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Silvalinings, I've gotten to speak with you a little already, and you are clearly a kind heart and quick mind.  However, I must say that once again you have read something into what I wrote that I did not put there. 

If you run back through my article, you will see no mention whatever of Mike Klinger or RU.  Not one.  No allusion to him or it.  Nothing. 

As you have pointed out twice, once in Eric's hub and once in mine, I DON'T know much about RU or Mike specifically.  I certainly will agree that, unlike Eric who did take the time to look into the subject, I have not spent any time investigating any of that, which is why, if you read less defensively (again) that I point no fingers in this hub whatever.

If you have found something in my general analysis that struck a chord, fine, that could explain how you feel, perhaps might even, uncomfortable as it may be, be something for you to think about.  However, if you didn't find anything that struck a familiar chord, then I must confess to being once more at a loss for why you feel that I have done something to make you mad.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

And yeah CJ, his book carried a lot of the weight for him. But I have to be careful getting into religion. They all start as cults, become sects and move to religion (with the obvious exceptions of the real ones that are truly divinely inspired ect. and so on), but it's not my purpose to fire that up just now, fun as it might be.


silvalinings profile image

silvalinings 8 years ago from Richardson, TX 75080

I'm referring to the comments - clearly making a connection with Eric hub and the "charismatic leader." You're not making me mad, a little frustrated maybe. The chord you strike is that you are correct about MLMs and misguided leaders. It is my mission to be a part of a movement which changes that. Obviously, I'm passionate about the subject, and about this particular training opportunity in particular - because it stands out from the rest.

I remain your friend and fan. No one says we have to agree on everything.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Rock on, Silva. :)


pgrundy 8 years ago

Eric, that is HILARIOUS! No, I've never seen it but I'm immediately emailing it to everyone I know. I have been sending out resumes for months. I've had two interviews, and one of the interviews I did get a job offer, but there was no health insurance. I wanted to take that job so bad, I mean, it really hurt to turn it down. I can't get health care and I have a health issues (hell, who doesn't at 55?)--I mean I feel good and I'm active, but I don't want to like, stroke out and then lose my house. It happens all the time. Thanks for a good laugh though!!

Shadesbreath, my job does indeed suck ass. What I do seems to be the 21st century version of millwork--when jobs do come open around here, 90% of them are in these f**king call centers. I'm going on my 7th year in these places, and it's not like I don't know how to do anything else. The economy really is that bad. If we had any public health care options at all I'd pull weeds for the neighbors next door if I had to, anything to get out of there. But it's not looking very likely.

CJ is right, capitalism is what he said. But it's going down. Seriously, can't you hear the death rattle out west there? I can hear it in Michigan real loud.


CJStone profile image

CJStone 8 years ago from Whitstable, UK

No shadesbreath, you're right, keep out of the religious market. It's even more vitriolic in there.

Eric, I've just come back from a belated tour of your RU hub and all the comments. Phew! The amount of self-justification in there... it was was just astounding. Reminds me of a line from the bard - the original bard: "methinks the lady doth protest too much". But I agree with pgrundy about the above comment. We should have a "best comments of the week" hub. Yours would be at the top of the list.


Eric Graudins profile image

Eric Graudins 8 years ago from Australia

@ shadesbreath.

My apologies for bringing up the RU matter in this hub.

@ silvalinings.

You are clearly an intelligent lady, who writes very well. I'm glad that RU is fulfilling your current requirements for learning about internet marketing.

Please direct your wrath at me for making the connection between this hub and RU. It's just my sick, negative attitude at work again, as has been repeatedly proven on that horrible, horrible hub that I wrote.

Someday you may discover why I wrote it. (And also the reason that long refund periods are used :-) )

 @ pgrundy and CJStone.

Thanks, and I'm glad you liked the management lesson.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Eric, feel free to bring up anything you'd like on my hubs any time. I'm happy to field whatever fun or fury comes my way.


bright_sorcerer profile image

bright_sorcerer 8 years ago from London, Canada

I'd never really sat down to examine the specifics, as you've laid out here. Quite comprehensive and a good read...I know everybody likely has their own story so I'll be brief. Writer's Literary Agency - a big promise of publication for a novel I spent several months on. The catch of course, was that it had to be "critiqued" but that was "usually only between $70 -$90" and of course they had a "reputable" editorial service they used which supposedly gave them a break in the pricing, only because we were "now one of their valued authors". I was just so elated that somebody else had deemed that novel worth publishing and I actually got as far as having them send a contract. Bad nightmares that night, which I always take note of when they occur, did some searching online and found, of course, that  they were a scam. If that wasn't enough, they phished my damned email address and I suddenly found my email box full of returned unsolicited spam for penis enlargement products!!! This was the day after I made contact with them and yet I didn't want to admit it was them. Yeah, I felt like a complete moron but I was so hyped about somebody finally taking notice of my writing that I chose to ignore the obvious. So I can relate in a big way to this hub. I will definitely be passing on the URL for this hub to a few friends in the hopes it may open their eyes. Unfortunately, I doubt it will. Thanks again, shadesbreath, for posting this. It was VERY informative and to be frank, got my blood pressure up a bit...lol. Oh, and I won't even mention the grammatical and spelling errors on their so-called contract and blog. Once again, I chose to remain oblivious but didn't sign with them. Yeah, sure could have used this knowledge back then. Be Well. 


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Thanks Bright, I'm glad you got some use from this. Hope is a double edged sword for sure, especially when it comes to something like trying to get a book published. Trust me, I know how that goes for sure. The upside tho is you did get all those marvelous penis enlargement offers. I mean, can we ever be large enough? lol

Thanks for the comments.

(Oh, and no editor/agent worth their salt will EVER charge to read your stuff. Nor will they have copy costs or anything else later. Ever.)


dineane profile image

dineane 8 years ago from North Carolina

pgrundy said, "But you know what I find interesting is that even at my 'normal' wage-earning job, a lot of these techniques are employed now." Which is exactly why MLM's have so much appeal. I was involved in a network marketing company for a couple of years, and I have no ill-will towards the company nor my "upline". the truth is/was, I had just as much chance of moving to the "top" of their "pyramid" as I have in the corporations I've slaved for...actually, I probably had a better chance with the MLM, even with my lack of sales talent.

There's corruption and abuse everywhere. Your hub, Shades, unfortunately applies to more than just MLMs and Cults.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

I think if you really carefully and meticulously applied ALL ten essential elements to any situation, not fudging on some to try to squeeze it in, you will see how one circumstance will fit and another (most) won't. None of the individual things I point out, like charisma or praise etc. are unique to cults. All I've done here is try to show where the line is drawn, and how the perfect storm is formed when all ten come together with an intent.


sixtyorso profile image

sixtyorso 8 years ago from South Africa

Shades a great hub and indeed a cautionary tale. Unfortunately, the human being, after need, is fueled by greed, and greed is the hook which generally gets us. This is of course over-simplified somewhat as we need to look at all Maserow's hierarchy of needs. So an ability to be eloquent, empathetic and an opportunity to "save you" financially or spiritually is the perfect setup for a scam. Lambs to the slaughter. 


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Well, informed lambs can look up, away from the fluffy white rump of the lamb in front of them, and, rather than continue to follow, take a gander at what's going on around them. Maybe save themselves from being chopped into chops or nibbled on by wolves.


Diyana Alcheva profile image

Diyana Alcheva 8 years ago from Portland

What you are also referring to is how the Stock Market developed in the early 1900's. A lot of leaders and "minions" called it a scam before they embraced it.

It's a pyramid scheme. Now our entire economy is based on it.

Personally, I am inspired when I see leaders inspire others to create something.

The Hub Pages community itself wouldn't be here if there wasn't one or more charismatic leaders who had "made" people feel empowered to get behind a vision and create something that didn't already exist.

Their motivation was money but their intention is what matters.

Their intention was to make you and I, "the so called minions" (as you call us), feel empowered to share our views and build an audience by creating Hub Pages.

So welcome to the Hub Pages "Cult" as you've described it!

Get up on your soap box everybody.

Build an audience!

Build a dream!

"Make" others feel empowered to build their dream!

That's what creates jobs, new products and services (a.k.a - value).

It's the economy silly! :)

Partners in Progress,

DiDi Alcheva


hatedmlm profile image

hatedmlm 8 years ago from Bothell, WA

Yeah, I always hated MLM stuff as you can see from my user name. In fact some Inernet flunky just stole $1500 from me (hacked in and got my credit card - I think it was Pay Pal related). So I am skeptical and afraid to get chopped or nibbled. However, (here it comes) I too am a fan of Mr. Klinger. He is especially good at training poor people that do not even know how to drag and drop. I wouldn't have the patience.

In the meantime don't let us overzealous cult members slice it too thin. I always realize there are two sides too every slice.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Diyana, while I certainly appreciate the enthusiasm with which you approach the topic, I must confess that the grounds of your argument are gelatinous at best.  The stock market was hardly "developed" in the 1900s - despite when the exchange in the U.S. may have formally begun - as it was merely a formalizing of an established practice of shared risk ventures (joint stock companies) that dates back as far as medieval Europe - precisely when and where being somewhat subject to what scholar you choose to read, but in the area of the 16th century at least.  To suggest that the stock market was a pyramid scheme tossed up willy-nilly by some charismatic chap with a smoke-and-mirrors show screams unfamiliarity with the subject on an enormous scale and ultimately does nothing to found or sustain your second point at all.   

To your second point about HubPages, I can only smile and nod politely, and suggest perhaps when you have more time you take an earnest look at each of the ten points that I outline in my article and see if they all actually fit.  My article is not about the "list of ten items for which only three or five need be applied" it was about ten as a unit.   I do appreciate your comments though. 

@ Hatedmlm,

That seriously sucks about the 1500 bucks. :(

But... I must point out to you that you have done the same as I pointed out to Silvalining up above: not only did I not mention Mark Klinger, I mentioned no one at all.  Should you happen to reread what I wrote, you will also see that I mentioned no specific cults or organizations either.  My article presents a specific list upon whose elements I expand.  Any commentary about or resemblance to Mr. Klinger or his organization is purely based on the application of the list by readers who may or may not have dealings with him in some way.   Application is left to the reader; I haven't pointed my list at anyone.


Zsuzsy Bee profile image

Zsuzsy Bee 8 years ago from Ontario/Canada

Shadesbreath! This is an excellent hub. A well put together list to my thinking.

regards Zsuzsy


SweetiePie profile image

SweetiePie 8 years ago from Southern California, USA

This hub describes any cult or exclusive group to a T.  You know once a telemarketer told me I had won a trip package to the Bahamas for only 300 dollars, so I asked him to put this in writing so I could peruse it at my leisure.  Once I said this he started trying to guilt trip me and tell me he was affiliated with the Marriot and "do you know my reputation?" bit.  I politely told him I do not believe the Marriot is so hard up for customers that they would run aggressive telemarketing campaigns offering all inclusive trips to the Bahamas for only 300 dollars.  Once I told him this he became very irrate and told me I just did not appreciate how wonderful his resort was, so I told him I had to go.  He tried to use the above tactics on me, but I just do not have much sympathy for telemarketing.  I know people need to make a living doing this, but I hate receiving calls such as these and usually do not pick up if I see an 800 number.  If it is an important matter I assume they will leave me a message and and I will call them back.  I have always been a heavy screener do to telemarketers, except for the few times I accidentally pick up the phone.  Thanks for the interesting hub.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Zsuzsy, thank you very much for the kind words.

And thank you to you as well Sweetie Pie. That telemarketer sounds annoying whether he was part of a pyramid or not. I love the "do not call" list.


Eric Graudins profile image

Eric Graudins 8 years ago from Australia

Here's how I deal respectfully with Telemarketers

http://hubpages.com/business/make-telemarketers-ha...

(I think this is the first hub I published here. Seems like a LONG time ago !)


Arc_Jet1 profile image

Arc_Jet1 8 years ago from Los Angeles, CA U.S.A

great i appreciate your hub....keep a good work buddy.


Constant Walker profile image

Constant Walker 8 years ago from Springfield, Oregon

The comparison to MLMs and cults is brilliant. Great hub!


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Thanks Arc and thanks CW.


marketingmerge profile image

marketingmerge 8 years ago from Portland, Oregon

I think Didi had a valid point.

Many large company mergers did take place in the early 1900s, such as the one that combined 10 steel companies (these were the 'drivers' of the industrial revolution and the major influencers of the world we live in today) to form the United States Steel Corporation, which set into place a number of events that led to the robust development of the stock market as we know it today.

As industries consolidated so did their relationship with the Federal Reserve, government and the entire banking system. Some would call the entire system we operate out of today a pyramid scheme because if money were to suddenly be pulled out of the stock market we would be in one hell of economic situation.

Our entire economy thrives on having more and more charismatic leaders creating companies (or trying to and failing often) so they can create jobs and gather investor's money by telling a good story, giving a good show, and doing the rest of the things you talk about in your list (although most wouldn't use the negative language such as 'suckers' to describe all the failures that take place in between the successes).

But to avoid writing an essay to support this statement let's assume all what I've said isn't true.

Still true is that there are countless examples of people in history and in present who have helped shape our economy and the way in which we live our lives... who could 'fit' onto your list (with or without the negative language you used to describe the failures that happen most of the time as they try to create companies and make their ideas materialize in the market).

Charismatic leaders

Telling a good story

Having a good show

Taking in the first 'sucker' (or winner) depending on the outcome of the proposition

Bringing on the testimonials

Swelling the ranks

Giving praise to believers

Defending assaults

Taking the checks

Laughing silently AND out loud

One such example (out of thousands I could choose from) would be Charles Schwab -- who once worked for Andrew Carnegie, running his private steel company. Well, Schwab had an idea. He wanted to merge 10 of the steel companies – all of them that controlled steel at that time, including Carnegie's company, make it a public-traded company, and cash in on the deal with an excess of tens of millions to go to the players involved.

He was said to be one of the most charismatic people of his time--while putting together the deal many business leaders thought him to be a shyster--and they thought the entire idea to be a scheme no less.

Carnegie himself was said to have major doubts in the concept of stocks and thought it to be shady at best. But he was handed a big check to buy the company out... hundreds of millions… money raised as part of the anticipated plan to sell off shares of the company to a greater number of people, thus increasing the value of the single company, United States Steel. The entire concept was risky at best for some and an absolute con job to others.

Those who were there say that Schwab gave one hell of a charismatically presented story on one evening to some of the wealthiest people of that time to start selling the idea.

I quoted this from the following location:

http://www.fundinguniverse.com/company-histories/U...

In December 1900 Morgan attended a now-legendary dinner at New York's University Club. During the course of the evening Schwab gave a speech that set forth the outlines of a steel trust, the nucleus of which would be the Carnegie and Morgan steel enterprises, together with a number of other smaller steel, mining, and shipping concerns. With Schwab and Gary as intermediaries between Carnegie and Morgan, negotiations were concluded by early February 1901 for Carnegie to sell his steel interests for about $492 million in bonds and stock of the new company. The organization plan was largely executed by Gary, with Morgan arranging the financing. On February 25, 1901, United States Steel Corporation was incorporated with an authorized capitalization of $1.4 billion, the first billion-dollar corporation in history. The ten companies that were merged to form U.S. Steel were American Bridge Company, American Sheet Steel Company, American Steel Hoop Company, American Steel & Wire Company, American Tin Plate Company, Carnegie Steel Company, Federal Steel Company, Lake Superior Consolidated Iron Mines, National Steel Company, and National Tube Company.

You can get a more 'close-in' perspective on the story by referring to Napoleon Hill's version as told in his famous book, Think and Grow Rich.

Our history is full of such charismatic people who had an idea, told a great story, have a GREAT show, took the first 'sucker' or winner, depending on how it worked out.. And who meets the other criteria on your list to create a dream.

Airplanes, cars, computers, movies, television... everything that was once a pipedream but we now take for granted and can't imagine life without was started by at least one charismatic person who did the things on your list.

There are more cases of when those leaders failed in making the dream come true and that's often when people are called suckers.

When the charismatic leaders pull it off they are applauded.

Refer to Think and Grow Rich for more about the difference between a poverty mindset vs. a success mindset.

Once you understand the striking difference between the two this discussion changes.

You realize that scams don't come and 'get you' like the boogie man.

It's just a matter of you deciding to pursue success (or not)...if you decide to pursue success you become a student of it by learning from others who are successful and you become responsible for your own decisions and the outcomes.

All anyone has to do to get started is refer to all the great books on the principles and philosophies that create all the new products, services, businesses, non-profits, new discoveries, new banking concepts, new technologies, money and success in general--the book, Think and Grow Rich by Napoleon Hill, is a great place to begin.

Ultimately it's true there are scams out there but they are few in today's highly regulated industry.

What is scarce is the willingness for people to take responsibility for their own decisions and the outcomes of those decisions.

Read and study from the great authors like Napoleon Hill--study the success principles--it will be easy to decipher fact from fiction and a scam from potentially successful opportunities.

Interesting discussion. I'll let the great authors like Hill take it from here...

Mike Klingler


Team Building Information 8 years ago

Hey Shadesbreath,

I think you have a great angle on your little diatribe here. I couldn't help but chuckle a little to myself because this is the exact lens I would have written a few years ago when I was pretty bitter with the MLM industry. Your argument is good, except you leave out one very important factor: the fact there are real products being exchanged.

The fact is, in many (if not most) cases, you're right, when folks treat their Network Marketing business like a money game people get hurt. It's simple to see why: people (looking to make money) looking to recruit more people (to make money) to recruit more people (you get the picture). Structuring any business like this is obviously unstable because there a no customers simply looking to benefit from the use of the products.

Imagine a block of Verizon stores side-by-side with each "owner" buying his cell-phone franchise under the premise of keeping his distributership only if his cell-service is active. The only products being transferred are to those people looking to earn an income. . . this is obviously unstable because as soon as that distributer figures out it's not as easy as it sounded, and they're surrounded by other reps, they cancel their monthly order and drop off the face of the earth.

But what about those people, like myself, who spent years in pain who are actually being helped by the company's products? Or the family whose breadwinner got their identity stolen and could have never afforded to recover it if not for the I.D theft plan they invested in? WHat about the folks that need the products being sold?

The plain fact is, ALL businesses are structured like a pyramid, it's the only real structure that works to build a business. Look at Bill Gates, Don Trump, Richard Branson aren't everyone of these businesses structure like a pyramid? The big difference is #1: the distribution model and #2: the fact that the distributer can actually make an increasing profit the more effectively she sells product and builds an organization.

You say: "A good, charismatic marketer does the same thing, promising access to a different type of mystery, the mystery of getting rich or powerful through special learning whether it's about wealth building or amazing fuel efficiency, maybe a cure for baldness or how to make money online."

I don't know if this is true. . . at least not in all cases. My business, for example, now I never ever talk about money, ever! I did when I started in the industry, because that's what I thought I was supposed to do, and the people I brought into my business were desperate and broke. My target market are intelligent folks who hate having a boss crawling up their ass on a daily basis. These people are motivated, smart, and looking for a way out of their daily hell they call a job.

Do I sponsor everyone I can actually get my grubby hands on? Hell no. My grandpappy told me "Boy, you can't polish a turd." Good advice from a smart guy. Some people don't belong in an MLM business, or a business at all. There's no shame in running a mop for the rest of your life if that's what you choose to do. . . so be it.

I don't lead with my product, the opportunity, or how wealthy I am, I lead with the ideas behind what keeps me breathing everyday. Call it charisma, I call it absolute independence and and alternative to kissing corporate ass in exchange for a wage until the day I die.

Real people have and do make fortunes in MLM, that's the truth. What's your alternative? You seem like a real intelligent guy so I'd like to know what your solution to all the scammy MLMers (suckers) out there? Best start puckering up.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Mike (and Team Building Information),

  I appreciate you taking the time for such a vociferous reply.  While I believe that the attempt to compare US Steel with a pyramid scam is merely a red herring of titanic size (albeit fun), I will show how and why that analogy falls apart.

  US Steel companies actually owned properties and hired workers on salaries that were guaranteed.  Each mine and steel mill and various other component of the company functioned to output tangible goods continuously.  These companies (viable enterprises prior to the merge) had measureable wealth for everyone involved in the form of salaries. There was no “maybe” or “eventually if” about it (horrific labor conditions aside).  The only “if” involved was if they produced a product that the market was interested in buying.  If there was no market, or if it failed, then, well, the jobs could have gone away.  But there was no smoke and mirrors about the operations themselves and they weren’t operating on a shred of truth.  The business was about the excavation and extraction of ore and the production of steel and steel products.  They worked on a basic production model of business that has been around for eons.  (I’ll get to stocks momentarily.)

  While it might be said that some random pyramid scheme might have claim to a “shred of truth” that constitutes an actual product of some kind as I mentioned in the article… the difference is that the core of the “wealth” to be earned in a typical pyramid scheme comes not from actually selling that product so much as it does from getting more and more people to sign on to help sell that product to the point of  building a pyramid of salespeople who far outstrip the “demand” for the product itself.  It’s not about building the business for the sake of a product or service; it’s about building the business of building the business. 

  An argument can be made that pyramids pay commissions like a real business does.  This might be closer to the truth, but again, there is no actual product being sold with any genuine intent.  Yes, there is a “grain of truth” product there in the form of foul toothpaste or the User’s Guide to the Universe or whatever, but if anyone spends one honest second looking at the foundation of the company, and if they follow the money to the end, they will see that the prospects for actual wealth with incomes guaranteed at all levels are ludicrous.  Again, it’s not about building the business for the sake of the product or service that defines that business; it’s about the business of building a business building the business – razzle dazzle.  A good scam is one that knows how to blur the line – blurriness makes it hard to see (particularly for trusting folk who don’t know exactly what they should be looking for).

  Which gets me to the stocks.  A stock company (like US Steel) sold stock for the purpose of bringing in revenues to grow the steel works (and the wealth of the shareholders proportionately to their holdings).  The risk was clearly stated and not ostensibly tied to the effort of the shareholders.  The shareholders had no effort at all beyond putting up some dough and letting their money ride (and voting on officers etc, but anyway…), and they certainly weren’t buying into the system for the purpose of talking other people into buying into the idea of talking people into buying the idea of selling shares etc. ad nausea.

  So, the difference might seem slight, but it is enormous.  Stock companies take money in exchange for a percentage of actual existing company value, which, true, a company can fail, but that is up front and they are buying into the operation.  They are owners outside of it and betting on the success of the commodity with returns (or loses) based on the percentage of their ownership. Granted the influx of money creates larger value, but that inflow is then turned to greater wealth through investments in further mining operations, mills, or even just investments in other companies.  Heck, even just as liquid capital poised to strike at some opportunity should it arise.  But the wealth does not just disappear (unless the company is poorly run etc. but we’ll assume that it is not since US Steel did so well).

   Here’s two models:

  Model 1 – US Steel

  US Steel produces steel product, let’s say … fish hooks.  So how do they become successful?  Do they A) hire salespeople to sell fish hooks, or do they B) hire salespeople to find more salespeople?  The correct answer is A: they try to sell fishhooks.  The more people who buy fishhooks, the bigger the company gets, and then it hires more sales folk, who go out and sell fishhooks and so on.  If they don’t sell fishhooks, they go bust.  If they do sell fishhooks, they make it and grow and create more secure jobs as they do.

  Model 2 – US Steal

US Steal sells a book on how to get rich by making fish hooks.  The book actually does tell people how to make fish hooks, but it’s a complicated process requiring access to raw metals, a factory with forges and molds and people who know about metallurgy, product distribution and lots of other stuff.  The book has a “grain of truth” for sure, but the reality is, there just aren’t too many folks out there who are going to go out and actually do all this stuff.  Of course the management of US Steal can shrug and say, “Well, we told them how, if they can’t do it, even after all our help and guidance, well, it’s not like the information we gave them isn’t real.”  And this is totally true. 

  However, if this was the case, US Steal would go broke in about a week because that book wouldn’t sell for crap because it would have no success stories at all, particularly not in any reasonable period of time.

 

But, there is a way to save good old US Steal from going tits up while it tries to accumulate some testimonials.  They include chapters in their book (or even offer a second book for a nominal fee) that shows people how to market the book to others, allowing them to become a “member” of the glorious enterprise of US Steal while they, in theory, are poking about the business of making fish hook empires for themselves.  The original authors recruit people to push the fishhook making program as affiliates, so, rather than actually making fishhooks, they just keep trying to get more people to join in the idea.  Occasionally people will buy the book; there might even be a few who try to make fishhooks in their back yard, but the real business is to get as many people in to sell the books as possible.  Everyone gets a little piece of the book sale involved, the original founder and his cronies get a cut, obviously, and the person who sold the book gets his or her “commission” for having brought someone else in.  That new person is not going to make a fortune in fishhooks either (which is why he just go ripped off) but he is going to try to get someone else to buy the book too.  But how much genuine income is that new person going to earn unless he can make a crapload of fishhooks or sell a crapload of the books?

 (continued...)


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

This is the difference between the two business types.  One actually has a product, the other doesn’t.  One has a truth, the other an ostensible truth, a “grain of truth.”  Once actually provides something, the other provides information about how to maybe get something.  The latter may try to write it off as instruction and even call the cost of the fishhook guide something in the order of tuition for the learning experience… you know, like a trade school or college or something.  But, how many colleges exist for the purpose of getting more students in?  Go to school, learn engineering or art and, mostly, how to recruit new students to come pay tuition to grow the campus more.  Such an institution would be suspect at best.  Fortunately there aren’t many out there like that.  Whew.

  So there you have it from my point of view.  When it comes down to the pursuit of success that you referred to, Mike, it becomes a matter of odds.  A company that actually has something at its core beyond itself has a better chance for success than one that only has a “grain” of actuality, with which I suspect those authors you talked about would agree (unless they are explaining how to run a pyramid-scam obviously).  I hope this helps clarify some things should you ever run across such an enterprise yourself.  I know you do good work because the mass of testimonials I’ve read on Eric’s hub touting your merits as a human being, one of them even likening you to Jesus Christ.  I think that is amazing and neither my mother, my wife nor my children hold me in esteem so lofty as all that.  You are clearly excellent at what you do for RU.   I wish you the best with your enterprise… you and all your “little ducklings” as one of your people self-referred. 

  Thanks again for your comments.


Scam 8 years ago

It's great to see someone who holds multi level marketing in as high a regard as I do :D


RUTHIE17 8 years ago

Great Hub! It was only mentioned in passing a couple of times but the parallel to politics is glaringly similar to the MLM and cults. It seems that the bottom line for everything today, politics to charities, is how much money can be made from it.

What a sad place the world has become!

Ruthie


Marlene_OnTheWall profile image

Marlene_OnTheWall 8 years ago from Singapore

What an interesting hub, not just the article itself, but the subsequent discussions. I've always been ultra-sceptical of MLM schemes and "cults", and I think you largely nailed it, shadesbreath, except maybe for point no. 10. I think some of those "charismatic leaders" actually believe passionately in their own messages.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Ruthie, I agree there are some unscrupulous louts in politics, and some not. It's unfortunate that many of the ones who would do well are the least "charismatic" and many of the real jerkwads are the most so. Thanks for the read and comment, I appreciate your taking the time :)

Marlene,

Yes, the discussion did get lively and fun. And, truth be told, 10 was rather tongue in cheek, as I expect you surmised. But you're right, I imagine a good half of cult leaders believe their own story, at least most of the time. I'm sure there are moments of clarity for a goodly portion of those too, however, even if only briefly in front of the bathroom mirror or lying awake at night, alone and exposed to the singular scrutiny of God, Fate or even just mortality.


Bonnie Ramsey profile image

Bonnie Ramsey 8 years ago from United States

There is a difference between a pyramid scheme and an MLM business. Pyramids are illegal and they are the ones who have no products and make all their money on sign-ups. A reputable MLM business lets you earn good retail profits while you build your team members. Yes, you do make money when you recruit. It's called residual income. It strikes me as very strange that people tend to label MLM as illegal pyramid schemes when they have been around for over 50 years and some of the most well-respected people endorse them, such as Donald Trump, as well as many MLM businesses being accredited by the BBB. This could have been an excellent hub if it had actually been what the title claimed, which was PYRAMID schemes and cults. But the second I opened the hub, the first thing said was not pyramid but MLM. I really wish people who are not in the MLM industry would do some research and learn the difference.

Bonnie


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Bonnie, thanks for your input on this and I respect your opinions. However, unlike the people you mention who do no "research" I know exactly and very, very well how this stuff works. I've been in sales, management and marketing for 22 years, and I've seen a lot of stuff. Plus I read :)

I'm not sure if you read the last exchange between Mark Klingler and I, but one of my main issues is with products that seek to create a salesforce that outstrips the demand for a product. I totally understand creating a salesforce for the purpose of creating a demand, but that's only the standard method, the "new" method you pointed out as having come on the scene in the last 50 years is not the same. The 5,000+ year old method is about salespeople pushing for product sales where the 50 year old method is about salespeople pushing for more salespeople, with an occasional attempt sell the product. In the second business model, the product or service is no longer primary, it's about pulling in members first, selling product second (or third or fifth... whatever).

This does not mean that people can't generate an income or join the BBB, but what it does mean is that the focus is not on product quality or customer satisfaction at all. It can be argued that many modern businesses don't care now on the conventional model either, but, if they don't care long enough, they go broke. The MLM model just keeps dragging in new recruits on the hope of "building a business." They don't realize they are customers being used horribly or that they are using their customers horribly. They get too caught up in the "dream" to see what they are doing, or realize what has been done to them. Point it out and they feel foolished or embarassed and usually they get defensive and then you can't talk to them anymore... like ontological debates with most pious folks. At that point, meh, what can you do.

I accept MLM as a reality, but I will point out it's predatory disregard for the "customer" any chance I get.


funnebone profile image

funnebone 8 years ago from Philadelphia Pa

do any of you mlm'ers sell glasses cause this ws a lot of reading. All I can say is "shades, you owned them" good job!


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

LOL yes, it was a lot of reading. I think I got carpal tunnel too. lol. Thanks for hanging in for all the fun though.


Bonnie Ramsey profile image

Bonnie Ramsey 8 years ago from United States

I have also been involved with MLM for 25 years and have tried many different companies. Are there bad business models out there? YES! But my point was that MLM and pyramid schemes are two absolutely different things. Pyramids are illegal. MLM is not. Whether the company is a good or bad model doesn't change that fact. Many failures happen in MLM because of bad training of people in the old school business model. Instead of being taught that MLM is NOT a numbers game but a people business, they are taught to pounce on anyone within screaming distance of them. I agree that there are some bad companies out there but if you ask me, corporate businesses are at the head of the line for using and abusing people. Been there for 20 years as well! It is just really frustrationg to constantly see your profession smeared as an illegal scam when it isn't. There are some excellent MLM companies out there if people take the time to learn how to look for them. This industry has a bad image and some of the older teachings may deserve some of it. However, many MLM companies are working hard to try to change all that and it makes it harder when people are so bias against the entire industry because of what some have done. The whole industry is prejudged today and it is unfair. "Predetory disregard for customers"/ I see this on a daily basis in any business I open the door to.

Bonnie


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

For the record, I made no legal commentary at all. And I am sure there are many nice people doing MLM; I've said as much. My issue remains with the premise, not the people who get pulled in once the campaign is under way. However, I do agree with you that the old standard business model is filled with unscrupulous merchants. But then again, life is filled with unscrupulous people. The big difference is, if they are bad enough in what I call a "real" business, they fail. Further comment risks me covering ground already travelled, so I'll leave it there. I do appreciate your taking the time to share your perspective and I genuinely respect your point of view.


Bonnie Ramsey profile image

Bonnie Ramsey 8 years ago from United States

I understand what you are saying. My main point was that your title states how cults and pyramid schemes work the same. But you switched from pyramid schemes to MLM. MLM is NOT a scam according to the federal government. Pyramid schemes, on the other hand, are and they are also illegal.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Well, that's the whole "walks like a duck, quacks like a duck" thing to me, but, this has all been covered already too. As far as government recognition goes, well, I'm sure you don't believe and support everything this government does or says any more than I do; it's proven itself to be flawed and foolish endlessly. Our system is set up on the premise of proving guilt beyond a reasonable doubt... what that ends up being most often is just the ability to generate plausible deniability (also covered), so, meh. As I said before, I respect your point of view. But MLM is focused on growing a network of network growing, they are NOT commited to product development and service first and foremost. That to me bodes nothing but a desire for easy money and has little or no genuine concern for quality and the customer it serves. A happy MLM customer is one that can grow a good network beneath them, not one that has disovered an excellent product or service that they would genuinely recommend to a friend.


Glenn Frank profile image

Glenn Frank 8 years ago from Southern California

Even many of the religious organizations that are not technically in "cult" status have at least the first 9 of your list. Even if they are doing what they do for a "good" cause. It is the nature of man to take something simple, make a program out of it... and then make it their kingdom (or someone else comes along seeing an opportunity to grab power and takes it to the level of your list of 10). This happens in business, religion, non-profit organizations and noble causes around the world.

Great analysis of the whole issue. Loved the article.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Yeah, there's a lot of just plain human nature involved. Application becomes a matter of subtlety and, perhaps, point of view in some cases. But in the cases that irk the heck out of me, and some that don't but are just glaring anyway, it's not too hard to see. Kind of a hobby to point them out. lol

Thanks for the read and comments.


Diyana Alcheva profile image

Diyana Alcheva 8 years ago from Portland

To Shadesbreath:

There are so many issues that need addressing here it's just impossible to poke at them all. Your points over generalize.

I do enjoy different points of view so I don't mean this negatively toward you. I support your efforts to share how you see things.

I agree with Bonnie Ramsey... my take on this Hub is that you have way over-generalized to the point that the good points you've made are diluted.

For example, to say that, "...[MLMs] are NOT committed to product development and service first and foremost," is a grossly over-exaggerated statement. If most customers who buy from MLM companies were in it for the money the industry wouldn't remain.

Sure, there are junk MLMs just like there are junk companies in all industries (such as those that just go for venture capital funding and border fraud), but any sustainable MLM like the list of them on NASDAQ remain in business because they have a loyal customer following who buy and enjoy their products. Too few of them will ever build a business from it to support the model.

One company is Mannatech, and they're just one example. I buy their products because I think they are high quality nutrition, not because I make money. I am not building a network with Mannatech. I use their products. Period. I know of many such people. The economics wouldn't hold up if the only people buying MLM products were people building a network. In fact, to the contrary, MLM products are typically much higher quality than the products you find in the store because their customer base is more educated. This is supported by the fact that those who buy from MLM companies are more skeptical to buy from someone they bump into (as opposed to a trusted store outlet) and do a lot more research on the company and product ingredients or quality/service before they buy.

There are some REAL reasons why MLM gets a bad wrap and they are legitimate. Since it costs practically nothing to get started with an MLM company there are a great number of unpolished, unseasoned, unprofessional people who represent the companies.

And since MLM leverages word of mouth advertising so well many start up companies who have very little capital to launch a product line choose MLM as a distribution model because it requires so much less start up capital.

Where you have a lot of start-ups and low entry costs you will have some crap. That's capitalism. But don't generalize that all successful MLMs fall into the same category as the start ups. Unless you want to dilute your points.

There's a good point to be made about how the use of 'brainwashing' and misplaced loyalty pervades organizations, including religious, political, and MLM--anywhere you have a social group getting behind a cause based on beliefs or for personal gain.

But when you over generalize it weakens the point you want to make.

You also miss a point made by some others that many of the elements you criticize are found in leading people to invest into new ideas, companies and thus technologies... as well as positive organizations and new movements like 'taking better care of the environment.'

Charismatic leaders are found everywhere and many of the things they do to motivate or inspire people lead to very positive outcomes. To make this hub more credible you might include a more object discussion on that and how it relates to how they negatively impact society.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Diyana, I appreciate your take on my take and I'm glad you have found a source of nutrional products that makes you happy.  However, I must point out to you as I have done several other times over the course of this discussion that my list is 10 steps to a perfect Scam.  I actually intended to include all ten of them, even if number 10 itself is a bit tongue in cheek. 

 Those instances above, while certainly accurate in their having spotted an item or items from this list in the activities of one company or politician or another, are mostly recognizing specific traits that happen to appear on my list without being able to place those politicians or companies fully on my list.  I think if you have a look at your company of choice for nutrition, you will find some elements missing from it, or may, perhaps, have to work very, very hard to stuff it into some of them at best. 

So, I do appreciate your taking the time to descibe the company you use, I must deny your accusation that I've generalized in the regard you suggest that I have.  I was very specific in my selection of ten traits and I intended them as a whole. Anything falling short of all 10 becomes less clearly a scam and more moving into the gray area betwixt scam and legitimate. There's enough gray area there to choke a maggot.


Jewels profile image

Jewels 8 years ago from Australia

Again, you've grabbed my attention. Was interesting to watch myself have pangs of defense justifying my own involvement in a spiritual school. Nothing to fear as I have a very healthy level of discernment in anything to do with cults and spiritual studies. Lets say I must have been burnt at the stake as a witch in a past life. Seems to be a healthy reason to question anything smelling slightly scorched in the integrity department. Nonetheless I like when I have to stand accountable to my own truth and at the end of the day that's all there is.

MLM, whilst they have a good reputation as an equal opportunity employer, stretch boundaries in the ethics department. I have absolutely no doubt about this. Having spent 17 years in the banking industry I can see how initially subtle pressure marketing was. I left that industry in 1997. Today's marketing is led by pitbull terriors with the cunning of foxes. I responded to another hub, explaining how a telecommunications salesman parading as a human being pushed himself into my house under the guise of 'giving me something that is in my best interests.' After seeing right through the facade of high level training in salesmanship, I smashed him very assertively and held firm in not being conned. Because that's exactly what underlies the strategy: don't lie, but don't tell all the truth either. I was very kind to this young boy, but at the same time very strong in blasting through his facade. He ended up telling me the truth about what was the best company to sign up for, and it was not the company he was representing. Even selling what appears to be good nutritional products, there is a level of meme intake where the marketer becomes so passionate about the product they are selling, they become blinded by human values. In many cases the marketer doesn't even use the product but will stand by it no matter what.

I'm glad your hub hit nerves, it should.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Thanks, Jewels, I'm glad it did too. After Erics hub got the topic rolling I couldn't help want to flesh out the concepts being bandied about, whether they apply to the company on his hub or not (which ultimately led from here to my Excrement, INc. hubs of course LOL, but hey, I can't help that stuff, it just comes out.)

I think you were right to push that kid past the blind allegiance to the company line, too, btw. A salesman can make a great living selling an average product if he sells it with personal integrity. People will buy from a person over a company if they are given any reason to make the choice. Not many people have the patience (or ability) to push back like taht. You probably did that kid some good. Frankly, he probably had good in him or he never would have got there to begin.

Thanks for your comments, and I'm glad you liked this hub.


Jewels profile image

Jewels 8 years ago from Australia

Yeah, I'm glad I did push him. He was a great kid (probably 20 to 23). Thing is if he had the ability to put so much energy into this type of selling, imagine what he could do with something with more substance. I saw the bigger part of him and that's who I wanted to speak to. It's a bit heartbreaking to see human conditioning of this magnitude - it is like a tidal wave with Arhiman at the helm.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

When they're that young, they often operate on the axiom, "Eat first, have morals later." They can't be blamed for it in a world where a man is nothing if he can't generate an income. They can, as you did, be educated in their outlook though.


spryte profile image

spryte 8 years ago from Arizona, USA

Loved this hub too :) (Am I getting close to the end...or are there many more?)

My mother LOVED to play with telemarketers or anyone foolish enough to knock on the door of our house.  How I loved to hear those sweet words fall from her lips..."So, should we invite the nice Jehovah's in for a chat?" 

True story of telemarketer's call received today at office:

*ring, ring*

Hello?

Good Afternoon!!  This is Perky calling from your local Yellow Pages!

(oh joy!)

Impossible!

Uh...ma'am? 

It's 9:30 a.m. in the morning here.  If you are already into the afternoon...that doesn't make you very "local" does it?

Oh...hehehe (uncomfortable laugh).  Well...I am calling to confirm your company's mailing address.  Is it (insert mailing address here...and I'm not about to tell any of you what it is)?

Yes..it is.

Wonderful!  Now if you could just hold the line a moment, my supervisor will be with you shortly to make sure tha I did my job correctly (because I'm a complete idiot).

[brief muzak...very brief...so brief you might believe that Perky and the supervisor could very well be sitting right next to eachother swapping the role every few calls to alleviate boredom.]

Hello? (business-like tone that sems to indicate this person believes she is smarter than Perky)

Yep?

Thank you for holding.  I must inform you that this phone call may be monitored for quality control.

(I always love this idea...this way it's possible to achieve some sort of immortality)

Okay...

Is your address (reads address back to me - and I STILL won't tell you what it is)?

Yes it is.

And who am I speaking to?

Laurie

Okay, Laurie...what is your posiiton in the company?

I am the phone answering peon.

Uh..haha...mmm...I see.   And as the uh...do you have the authority to make phone decisions?

Duh!  I'm a peon.  What do YOU think?

Well we can always call back another time.  Is there a better time to reach the person who has the authority to make these decisions?

Mmm...how about tomorrow afternoon at 7:00 a.m.?

Thank you Laurie...we will call then.  Goodbye.

Of course, my boss was sitting across from me for the entire conversation looking like he was about to pee himself. 

So!  Remember...no matter how annoying or aggravating these calls can be at times...no matter how irritating those religious fanatics at the door can be...never pass up a potentially FUN time.

spryte


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Hah, Spryte, yes, exactly. I can't count how many times I've derived joy from them, in person or on the phone. When I have time, it is my great pleasure to mortify them with their own ingorance of the very things they try to sell. Nothing like having someone come along trying to pimp a religion they know less about than the person they're trying to sell. God that's fun.

And, no, you're not yet done if you're trying to find the bottom of my weirdness. I haven't seen you on the Good Neighbors or the Dog post... I think you found the Self Cannibalism one, but I'm not for sure. The Dog post has a poem I'm very proud of despite how horrific it is. lol. But you are getting close. The rest are my earliest attempts or hubs for the purpose of studying Internet traffic and SEO stuff on a most rudimentary level.


spryte profile image

spryte 8 years ago from Arizona, USA

I remember your poem...even think I said I liked it. I think you thanked me for liking it. But then again, I haven't found anything I haven't liked yet, I think...

I've been on the self-cannibalism one...maybe missed the good neighbor. I'm bored. I couldn't get the damn chat server to work. Keeps telling me it isn't installed even though it is. Grrr...

I may just have to torment people on mIRC...


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Funny, I logged into it tonight and .. nope, nobody there. Perhaps eventually I'll catch it with a full room.


spryte profile image

spryte 8 years ago from Arizona, USA

Dunno about a full room...but at least now I know where to go: Undernet...#hubpages. Did you manage to figure out mIRC yet? I figure I'll check it out this evening.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Didn't even try. I tend to forget. Out of sight out of mind etc.


nytsmasher76 profile image

nytsmasher76 8 years ago from Republic of the Philippines

The cynics SHOULD inherit the earth, not the GEEKS and NEVER the MLM marketers...ooops correction on the third one; they should manage the Earth...

I think like 'em.

Keep on Hubbing dude! c';


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

I wouldn't mind inheriting the Earth but damn the inheritance taxes would be brutal on that I bet.


sixtyorso profile image

sixtyorso 8 years ago from South Africa

Telemarketers Ugh. where do they get your cell number from?

The number of times I have won a prize. Yea right! You just need to...

"You have won a free cell phone...

just give me your id, number bank account no. and we can do this over the online banking...

OK if you dont want to give out that info how about your credit card no. and the last 3 digits on the other side."

Yea right pull the other one it has bells on it!


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

LOL Sixty, don't get me started. I actually have a hub percolating on that stuff. I'm still brewing the anger and sarcasm needed to pull it off without being preachy or boring, but, grrr, I'm with you man.


Eric Graudins profile image

Eric Graudins 8 years ago from Australia

OMG. I see that the shadecloth sewing circle is here almost in full force. All we need now is the horny one. :-)

The foreign call centre telemarketers are in full cry in Orstyaylia as well.

Here's how to deal with them in a very caring, non aggressive manner. Their scripts don't cope too well with this one!

http://hubpages.com/business/make-telemarketers-ha...


sixtyorso profile image

sixtyorso 8 years ago from South Africa

Eric absolutely spot on!  your method is great. I sometimes like to say:

"beep! The subscriber you have dialled is not available. The mailbox is unfortunately full so you cannot leave a message. He will get back to you from the caller id you have left on his phone. If you have made an unidentifiable call. We are sorry. Good Bye" and hang up. Say this in your best dead pan english no inflection in your voice. By the time they have figured it out they are left with a dead phone. they usually don't call back.


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

Hah, I ws gonna try that after I read it, Eric and forgot. You know, that's the problem with hubpages, there's so much good stuff it's hard to A) read it all, and B) go back to stuff that you liked. It gets lost in the miasma of Internet garbage being thrown around.

And Sixty, as fun as that is, don't underestimate the joy of a straight up: "F-off, I did your mom." It's crass, but generally they hang up too LOL.


sixtyorso profile image

sixtyorso 8 years ago from South Africa

My concern would be that I might really know their Mom Ouch!


Shadesbreath profile image

Shadesbreath 8 years ago from California Author

LOL. Hope she was hawt.


Mr Nice profile image

Mr Nice 7 years ago from North America

Very well researched and well explained hub.


Clara 6 years ago

MLM - just find a good one, good product, reasonable compensation plan - and just do it. If you can't , YOU'R the only one to blame. If YOU can't - You can't.. Some can. Your fault, not theirs. Money never comes easy, but it comes for some. With strategy, and work, and not past 20 years, generally 2 or 3 will be enough for millionnaire minded (Are you?) . I can tell you how. clarapv@clix.pt


Shadesbreath profile image

Shadesbreath 6 years ago from California Author

Clara, I've pretty much covered my opinion on this, but I'll just point out that statements like "Money never comes easy, but it comes for some," is not only a platitude, it's even a platitude that requires a softening with "some" to make sure you can wriggle out of it when pressed later or for details, and it only further makes my case. As for the "millionaire minded" - as if that is an actual thing - people like that will do much better starting a business of their own, a real one (as I defined above) and not smoke and mirrors stuff carefully designed to make OTHER people rich.

I'm not saying there isn't money in MLM. You just have to be the charismatic one that starts it or at very most in the upper tier. Then you can suck money out of the morons down stream that buy the lie and tell them, "You'r the only one to blame. If YOU can't - You can't. Some can. Your fault" [sic] when they fail. But thanks for stopping by, I hope you do well, I just feel sorry for the people whose money and/or time you take to do it; the ones who are "to blame" because you made them think they can get rich in two years but, woah, turns out they are yet another one of the masses who is not "millionaire minded." Aww, poor bastard. It's their fault. F-em for being stupid enough to believe you and only hear the optimistic part of what you said. I imagine that's working well for you in this economy. Did Dante have a circle for you?


kschang profile image

kschang 6 years ago from San Francisco, CA, USA

Clara is obviously in the "assimilated" stage (5-6-7) of the MLM cult. She had been brainwashed into blaming one-self for the failure of the system.


Shadesbreath profile image

Shadesbreath 6 years ago from California Author

Yep, kschang, I believe you are right. Possibly even into 8, but we don't see that part from where we are. It's the nature of the beast once the kool-aid goes down.


clarapv 6 years ago

Hi , I was looking for something around and got stumbled in several recent posts in several groups. This is funny ! I had no idea this discussion was so recent because my life is really running wild. No my dears, not a cult. Goals. You put a goal (for instance for the next 3 months), and that means disciplined routines, remember! like when we were at school and had to do home work for 3, 4 or 5 hours instead of seeing TV? Not the discipline imposed by a boss. Discipline at our own cost. And that means I make phone calls 10 -15 new leads, and then I call people who were interested for the last 6 months but didn't sign, 5 each day, and then I call clients who didn't do any sale for 2 months, so after around 25 calls, 10 emails ( not spam, emails to people already contacted) I have at least some one to meet in the next 3 or 5 days. Not everyvody is able to do it . IF YOU CAN'T YOU WON'T HAVE THE REWARD. Goals, and discipline. Some people have neither of them. They reap peace of body and probably have more time to go to the cinema. But I sleep with the conscience of having an idea and don't look back. Going It. And that's great! So these last 6 weeks I signed 11 people, ELEVEN PEOPLE. 8 in my country and 3 in Brasil ehehehehehe.

I love my product and I am proud in being coherent with myself! Just look around and think if the s--t of the politicians in the world anywhere have a tenth of this kind of integrity.

Clara ( I forgot how i signed up here, so i signed again with my new nick)


Shadesbreath profile image

Shadesbreath 6 years ago from California Author

Clara, we can agree that discipline is definitely the key to maintaining a successful sales pipeline. I'd go into the business model again, and point out what's actually happening, but I won't. I'll leave it at that and just say that I'm glad you are happy. :)


billymontchamp 6 years ago

Great analysis. I guess the boys at FHTM fit right in.


Shadesbreath profile image

Shadesbreath 6 years ago from California Author

Well, I haven't heard anything good about them yet, but can't claim to be an expert on them specifically as I tend to blow that sort of thing off these days.


Greg Sage profile image

Greg Sage 5 years ago from Orlando, Florida

Excellent tips. Thanks. Now I'm well on my way.


Shadesbreath profile image

Shadesbreath 5 years ago from California Author

Sweet. Now you just need a comet and a favorite Koolaid flavor.


Scott 4 years ago

In MLM, there is a GURU, and there are hamsters. The people are the hamsters. The Guru tells the hamsters to sell his stuff, and in the hamsters hard efforts, the Guru may give you a small raise from 20% to 30% commissions, while you keep running on your endless wheel, recruiting members and selling his product. The truth is, the Guru's product may not be good, and the Guru is not doing any work or believe that anyone can actually become rich like him. He gives the hamsters false hope. There is one new system that has come out. It gives Guru powers into the hands of the people. I wont use this space to advertise for the site but as far as internet marketing, this is a whole new category.

@Grumpy. I agree that America is a giant pyramid anyway.


Shadesbreath profile image

Shadesbreath 4 years ago from California Author

Scott, thanks for reading and sharing your opinions. I think we agree. If you want to leave a link to a site, given that you were polite enough not to just jam it in, feel free to link if you'd like. I'll have a look at it, but keep in mind, I'll be honest what I think about it too. :)


MikeLies 2 years ago

Mike is everything but what you claim. I am one of 5 to date that got crewed by him in our class. I am sure if I were to contact other classmates the number would rise.

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working