MLM History: Weight Loss, DMCA Abuse, and Child Porn, Oh My

Weight loss industry is a 60 BILLION dollar business (2013 figure) and it's no surprise there are a lot of various unproven claims from companies that sell magic weight loss formulas, each with its own claims how its own secret ingredient can help you lose weight through some semi-plausible mechanism. Frankly, all of them are bull****. The more you diet and exercise, the more your body adjusts to counteract your efforts. Most of the contestants in "The Biggest Loser" gain back all the weight they lost in a few years, despite all attempts to keep off the weight.

Consumers are getting wise to the various weight loss woos, and the entire diet industry is seeing a slow down, no doubt helped along by magic claims such as "alternative" to gastric bypass surgery by simply swallowing something. That company is called Roca Labs.

To quote the FTC director of Bureau of Consumer Protection, "Roca Labs Has An Adversarial Relationship With The Truth". And that's only the beginning.  (for a complete list, see TechDirt's Roca Labs coverage)

They claimed their product has a 90 percent success rate. In fact, they conducted no trials or clinical studies with their own products.

They offer 50% discount to people who videotape their "success stories", but did not tell people to disclose that they were compensated for such stories.

They operated a website that showed dangers of gastric bypass, with a page that links to selling Roca Labs products, without disclosing they actually own and run the website.

They have a "gag clause" in their contract that if you buy their stuff, you are contractually prohibited from saying anything negative about them for ever and to anybody including review sites and even BBB. And they have sued such customers.

They also claim if you say bad things about them, they'll rescind any discounts you've been given and they'll sue you for the difference. (!)

They tried to sue pissedconsumer.com to shut down negative comments left by members. (They lost)

They threaten to sue the witnesses at their trial for violating the unenforceable gag clause, in a clear case of witness tampering, threaten to sue the other party's expert witness and threatened him with criminal violations, as well as sue the other party's lawyer for statements made in court.

They tried to use DMCA takedown to hide criticism against them

They threaten to sue TechDirt (twice) for reporting on the above egregious behavior, including once from merely QUOTING the lawsuit.

They claimed their opposing lawyer had bribed a state senator into passing the anti-SLAPP law of Nevada which hindered their SLAPP lawsuit. (It was dismissed)

Why should you trust your upline if s/he is making money off of you whether you fail or succeed?

From when you're but a wee little toddler, you've probably been taught some (or all of the following):

• Don't take candy from creepy people
• Don't take health advice from tobacco company
• Don't take money advice from loan company
• Don't take ethical advice from the Devil

So why do so many MLMers take business and money advice from their upline?

Think about it, In each of the scenarios above, it's basically inmates running the prison, or fox guarding the henhouse... There's an ETHICAL conflict in the scenario.

But, but you say, my upline *wants* me to succeed because if I succeed, s/he earns more, and so do I! How can this be an ethical conflict?

But that's because you fail to see the situation from your upline's perspective, but rather, from the MLM myth it perpetuates about itself.

Let's see it from your upline's perspective....

How to be a cranky troll: Guide to IGNORE all useful feedback

(Author's note: This is written as a contrarian piece... The advice is BAD for you, and you are meant to do exactly opposite of all this. Got that? Okay, enjoy.)

Do you have absolute belief in yourself, that you can do no wrong, therefore, everybody else must be wrong? Are you surrounded by people who intend to change your mind even though you know YOU are right and they are wrong, despite all evidence pointing to the contrary?

Here are six tips to help you silence the world and live only within your head where you are always right:


1. Reinterpret specific advice to be personal attack on you, your business, your "family"

Any and all advice that you don't like is obviously an attack on you, your "family", your business, and your way of life, no matter where it came from, including your dear mama. They obviously... "don't understand" about how you work, how you think, how you live and therefore they have no business giving you advice!  In fact, anything other than "great job" is an attack on your beliefs!


2. Ignore advice until they are no longer relevant, then rant about how the advice is useless

Ignore all advice until it becomes "overtaken by events"... i.e. completely useless, then claim the advice is useless. Go ahead and insult the advice giver as useless and worthless, never mind you never took the advice any way. That's merely some inconvenient truth to be swept under the carpet.

Commentary: How "Ultimate Guide to Network Marketing" illustrates what's wrong with Network Marketing

I often browse used bookstores, and one day I came across "Ultimate Guide to Network Marketing" edited by Dr. Paul Rubino. As the MLM Skeptic, I read it with a skeptical mind...  Overall, I am rather... disappointed. While several of the authors out of 37 did dispense practical advice, such as how to utilize modern tech like autoresponder and such, while others laid out do's and don'ts on what to say in a sales speech, ZERO discussed what's legal and what's not legal.

"Pyramid scheme" was NEVER discussed, other than as an resistance to be overcome, as doubt in a prospect that must be quashed, and so on.

Product-based pyramid scheme was never mentioned.

In fact, the entire book is devoid of definitions other than odd backronyms like WOO = window of opportunity. There is no glossary, just an index.

Consider the implication: how would the network marketing noob know what's legal and what's not if it was NOT discussed in a so-called "Ultimate Guide to Network Marketing"? How "ultimate" can this guide be if legal stuff was not discussed at all?

Furthermore, many of the chapters were about belief / faith. Belief in oneself, belief in product, belief in company, belief in team...  Belief involves TRUST. What happened to due diligence? Common sense? What makes the company, product, or team members WORTHY of trust?

This is basically a collection of "business porn"... written by network marketing "leaders" who claimed success through effort even though they can't prove that their success was a result of their effort. Anything they wrote are results of survivorship bias and self-serving bias, but people starting in network marketing believe these to be words of wisdom, and indeed, many of the 37 articles advocate "just ape what I do" or "create system that can be easily aped"

In fact, one article is about how to CREATE business porn... awards, recognitions, newsletters, mailing lists, podcasts, Youtube videos, and so on, as marketing vehicles.

Would you really consider "monkey see, monkey do" to be wisdom?  The entire book is thin on actual practical advice. Most are motivational talk and how to customize such for your particular market (i.e. your prospects). Again, it's business porn, and it does NOT help.

Just as porn is not sex but sexual fiction designed to titillate, business porn is NOT business advice, but sales pitch designed to motivate.  Porn is fine in moderate doses, but porn addiction is serious problem. Similarly, business porn is fine in moderate doses, but business porn addiction will simply depress you as you constantly choose to compare yourself to leaders, trying to ape them, without understanding WHAT made them successful (often, it's just luck) and what price did they pay (which is NOT depicted).

The book basically is all about trust, and duplication, with a few bits of sales techniques and marketing vehicles covered, but has ZERO advice on what to look for, how to spot good from bad, and how to spot legal from illegal.

The implication is very troubling: if this is the sort of book written by top network marketing professionals, network marketing is about faith and recruiting, not about sales and earning trust.

Bad Argument: MLM Strawman Arguments Labelled as Mythbusting

A lot of so-called MLM "coaches" write articles to drum up business and recruit downlines, and they have to deal with, what they perceive as "undue criticism" of MLM. However, what they often ended up doing is defeat strawman arguments.

Recently I came across a certain article titled "6 Biggest Myths about MLM -- A Must Read" by Nathan Sloan posted on Network Marketing HQ dot co dot uk.  (Interesting, the URL says 7, so he seem to have lost one in the edit), and it served as a prime example of how MLMers argue... broad insinuations, strawman, this guy used them all.

His myth #1: Pyramid structures are bad

Pyramid SCHEMES are bad. Pyramid structure or pyramid-shaped organizations are not necessarily bad. If a MLMer, even a noob, can't explain the difference between a pyramid structure and a pyramid SCHEME, s/he is uneducated in the MLM fundamentals and his/her upline should be ashamed.

However, instead of explaining this fundamental difference, Mr. Sloan instead pointed out that pyramid structures surrounds us. Basically, he failed to identify the real problem, and instead, went to equivocation fallacy instead. Indeed, this is a common "MLM defense" tactic, present a strawman equivocation with "safe" structures.

Verdict: strawman myth

Solution: Mr. Sloan should concentrate on differentiating pyramid SCHEME vs. pyramid organization. Pyramid scheme is fraud. Pyramid organization is just a shape.

His myth #2: MLM is a Scam

Is MLM a scam? Sloan's explanation is that pyramid schemes are illegal, MLM is not. However, instead of explaining the difference between MLM and pyramid scheme, he simply quoted an OUTDATED definition he copied from "Ultimate Guide to Network Marketing" without attribution. And yes, I have this book on my bookshelf. That's how I recognized it. It was published more than 10 years ago (2005).

For the record, MLM in its current form was created in 1979 when Amway settled with American Federal Trade Commission to institute several reforms (today known as the "Amway Safeguard Rules") in order to keep on operating. The short of it is, the difference between MLM and pyramid scheme is MLM NEVER pays on recruitment (but there are ways to disguise the payment). This is what Sloan failed to address.

However, Sloan then went on to knock down another strawman. He claimed that any one who said MLM is a scam are lying to cover up their laziness and failure. This is in clear contrast of several pyramid schemes that presented themselves as MLM that were shut down. FHTM (shut down 2013) and Vemma (shut down 2015) are just some recent examples. By ignoring a prime example where a scam MLM did operate, Sloan is guilty of lying by omission AND a strawman, not to mention victim-blaming.

Verdict: strawman fallacy, lying by omission (or ignorance), plagiarism, unsupported argument (did not explain difference between pyramid scheme and MLM)

Solution: Sloan should acknowledge that many MLMs are done fraudulently, and attempt to explain the real LEGAL differences why MLM is not a pyramid scheme. Simply quoting a definition is not defense without explaining how that applies to your defense.

MLM Basics: Why a MLM Comp Plan is MORE important than the product, not less

One of the biggest mistakes a MLM "noobs" makes is put all the emphasis on the product, without analyzing the business model itself, i.e. the compensation plan, or in jargon, "comp plan".  (Or perhaps there's only a cursory glance). They are all enthusiastic about the product. OMG, it totally works. I (blah blah blah blah),  product is (blah blah blah blah). You have to try it! It's totally legit! I didn't believe at first but now I do! (blah blah blah blah)

When critics / concerned friends/family told them the company is likely a pyramid because of X, Y, and Z, the first thing out of their mouth is "it can't possibly be a scam, the product works".

They are suffering from the "blind men and an elephant" problem... They cannot understand that what they experienced  may be true for them, but is NOT the WHOLE truth.

Here's a very simple analogy... Take a look at this car:

Those of you who know cars should be able to tell, by the GT-R badge on the hood, that this is an older generation, Nissan Skyline R34 GT-R (or a reasonable facsimile thereof), which is a two-door coupe.

Except this is not a coupe. It's a station wagon. A five-door station wagon Nissan GT-R, and no, it's NOT photoshop(ed).

The point is if you ONLY look at the nose of the car, you'd have assumed it's a GT-R. But it's not. You have to see the entire body to realize this is NOT a coupe but a station wagon.

Similarly if you ONLY look at the products of a MLM, you could not have gotten "the whole picture", on whether the company may be a scam or not.

That's why the compensation plan, i.e. what you need to do to get paid by a MLM, is FAR MORE important than the product... It is the PRIMARY indicator on whether the company is a pyramid scheme... or a real MLM.

So how do you determine which is which?