Saturday, December 7, 2013

Is Robert "Rich Dad" Kiyosaki in a Faustian Bargain with Network Marketing?

Robert Kiyosaki Flipping Off the Haters
Robert Kiyosaki Flipping Off the Haters
(Photo credit: i am real estate photographer)
Before 2000, NOBODY knew who Robert T. Kiyosaki is, other than a few seminar attendees, desperate for some advice to get rich.

Then in 2000, the book "Rich Dad Poor Dad" was published by Warner Business Books, and that thing just TOOK OFF like a rocket, resulting in a series of books that are just one rehash after another, filled with "pithy" sayings that may or may not apply, anecdotes that were presented as "these are the true stories of my two fathers"... but later admitted to be a myth, a fiction.

But what is the real secret behind the success of Robert T. Kiyosaki and his book "Rich Dad Poor Dad"?

A implicit bargain with an industry desperate for legitimacy... the "network marketing" industry.

Is it a Faustian bargain?  Does Kiyosaki care, or he just view everybody who asks as "haters"? As he can't make a mistake?

Who made Kiyosaki the man he is today? It's not "Rich Dad". It's all the MLMers desperate to believe that they are making a valid choice for income.
“...Rich Dad, Poor Dad was originally self-published in 1997. As Kiyosaki worked the seminar circuit, he sold enough books to get the attention of Warner Business Books, a major publisher with better distribution.”  -- Slate Magazine, 2002
In other words, Kiyosaki's seminars pushed the books to income opportunity seekers who’s looking ot get rich by attending such seminars. And it took him THREE YEARS. (Current edition was first published in 2000)  By then, network marketing have been around for TWO DECADES (Amway started in late 1970's). And they are STILL barely accepted in society.

Most of those income opportunity seekers are looking for income opportunities, not merely advice, and like all such "sagely advice", most people will read the parts they *want* to read and ignore the rest, esp. when the reasoning behind the advice was not fully understood.

With crap advice like "go big or go broke", and "own the system" Kiyosaki told the hesitant to jump in with both feet, instead of analyzing the strengths and weaknesses of each model of business, such as traditional retail, work, consulting, franchising, direct sales, network marketing, and so on, it's just "you can't win if you don't play".

Kiyosaki basically peddled that book hard enough and found a willing audience for his crap advice to reach critical mass and gone viral. And things that gone viral is just bandwagon fallacy. I have read most of Kiyosaki's books, and found them to contain merely generic advice that doesn't stand up to close scrutiny.

Yet you will see many network marketers almost worshiping Kiyosaki as God, pay thousands for his seminars, and walked away full of dreams and empty wallets. Practically all network marketing companies that are recruit-heavy (i.e. suspect pyramid selling schemes) would include Kiyosaki in their reading lists.

You know who else peddled books containing bogus advice? Kevin Trudeau, who just went to jail for criminal contempt of court, promising things to Federal court, then breaking that promise.

But back to Kiyosaki... and MLM. His latest books, Business for 21st Century, is an all-out endorsement for network marketing. Though he had made plenty of videos before, claiming that people in network marketing, belongs in the B quadrant, i.e. business owners. instead of E (employee) or S (self-employed).

Is that really true though? The idea of a "business owner" is if you have the right leadership in place, you can walk away and the business will continue to run itself, and make you money, according to Kiyosaki's own Cashflow Quadrant book. Like, say, if you own a grocery store or gas station and hired workers there to run the business.

Is network marketing such a business, the answer is NO, not if you are following the Amway safeguard rules!

Number one on Amway Safeguard rules is known as the "10 retail customer rule"... i.e. you need to sell to ten different retail customers every month. Not your downline, YOU. If you don't sell to ten customers yourself, you should not qualify for any commission.

There's also the "qualification"... That you need to make X amount of sales before you qualify for all that commission from your downline. Most companies fudge / ignore the Omnitrition ruling that requires the sales to be true retail (i.e. to ultimate consumer that is NOT a part of the comp plan), but that's a secondary issue... in that you can "fake" the sales by buying the stuff and dump it in a garage somewhere.

So it's clear you cannot step back and let the "business" run itself. While you can generate significant income relying on other people's labor, you cannot go full hands-off.

NM is clearly NOT the "B" he was talking about.

Which means Kiyosaki had been giving crap advice for a whole decade now. And he's just about to hit 15 year anniversay of bad advice... by riding the coat tails of an industry that has had legitimacy problems from the very beginning (getting sued by FTC and was only allowed to live by instituting some major reforms).

Quid pro quo. You scratch my back, and I'll scratch yours.

In my opinion, it's a Faustian bargain... for both sides.

And neither side will ever admit their "mistake". They'll simply chalk up any criticism to "haters".
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