What is Business Porn, and Why Is It Bad For You?

Ever wonder who writes those books about MLMs? Or "how to become a millionaire" type books?

Probably nobody you ever heard of.

G.K. Chesterton once wrote in his essay The Fallacy of Success,  "...On every bookstall, in every magazine, you may find works telling people how to succeed. They are books showing men how to succeed in everything; they are written by men who cannot even succeed in writing books. To begin with, of course, there is no such thing as Success. Or, if you like to put it so, there is nothing that is not successful. That a thing is successful merely means that it is; a millionaire is successful in being a millionaire and a donkey in being a donkey."

Don't get me started on Robert "Rich Dad" Kiyosaki... As I've written about his bargain with MLM, and how his success is due to selling to MLM, not due to his own success. He had f***ed over at least two of his partners. His advice on MLM doesn't even fit his own quadrant system. And he doesn't understand what Ponzi is but managed to write about it any way for Yahoo Finance.

Yet people seem to regard him as some sort of financial genius. Why?

Frankly, Kiyosaki, and many of these so-called business advice writers, write "business porn".

Do you know what is business porn? No? Do you know what regular porn is? It's sex, with the boring parts edited out and dressed up to look the most exciting that few if any sane people would f*** that way.

Porn is fake. It's a SIMULATION of sex. Business porn is the same... books that explain to you the bloody obvious: making money is good. Stock photos that you wish your office look like, and so on. It's NOT REAL.

People who buy these books think there's "that one thing" they will "realize / get" to suddenly turn failure into "success". Often it's something about "attitude" (or mindset), or "gadget" or tool or system, or certain behavioral gimmicks that somehow symbolizes "leadership". They put up the stock photos that their business would never look like, or sprout cliche slogans like "you have to fake it to make it".

But just as porn is not real sex, business porn is not real business advice, even though they sure sound like real advice.

Bad Argument: When You Comment, You Should Check Your Facts!

Was browsing YPRPariah's website, and found something amusing... Some Vemma noob came and posted some comment about how great is Vemma and how everybody else are losers for doubting Vemma, blah blah blah.

Vemma Product Photography and Ad
(Photo credit: themichaelminer)

Here's a point for point critique.  His stuff is in blue, and mine will be in red. 

Honestly I use to be skeptical about vemma just like everyone here. As a business student I’ve been approached multiple times. but I realized that if I’ve been approached so much times it must be a trend and I put my ego aside and just let my friends explain to me why their so excited

So he just admitted he's a victim of FOMO: fear of missing out.  

 At the end of the day you guys really have to choose who your listening too.

So why should we listen to him?  

For anyone who’s skeptical your choosing to listen to a wordpress blog which has no credibility over people like robert kiyosaki, bob proctor, and eric thomas who are all millionaires who all directly work with vemma.

It's interesting how much credence he puts in "credibility". I wonder if he knew the following:

Kiyosaki was an Amway rep and his book was made popular by Amway's Sager Group. And he advocates screwing over his partners because he got away with it TWICE. He charges big speaking fees to appear at events. 

Bob Proctor basically stole all his schtick from Napoleon Hill (and admitted so), and his wife and daughter are high-rankers in Vemma 

As for Eric Thomas, former NFL player and now "Hip Hop Preacher", he's an inspirational speaker who will come to your event if you pay him enough. Between 10K and 20K per appearance, according to one article, as spoken by himself. 

They work with Vemma because Vemma paid them. They are mercenaries, much like lawyers. 

 Why would such credible people put their million dollar reputations on the line to work with vemma if it was a scam? They don’t need any extra money so the risk of working with a scam DEFINITELY wouldnt be worth it.

The answer is simple: they can always speak for someone else. Kiyosaki is constantly pumping out more rehash of his books and has that stupid "seminar" for pumping people more money. Bob also speaks for various other companies as well as his own "The Secret" related seminars, and so does Mr. Eric Thomas. If anything happens to Vemma, it wouldn't hurt them much, if at all. The damage he *thinks* will happen to them is negligible, and the deterrence he relied on is nonexistent.

This is just "appeal to celebrity" fallacy, or "association with celebrity" fallacy.

MLM Absurdities: How Scam Evolve Around MLMs and Pseudo-MLM Scams

Previously, MLM Skeptic have pointed out that many so-called "legitimate" MLMs have scams revolving around them in what's known as "lead generation" companies. They work by sending out teases to large number of people by selling them bogus "business starter kits", then sell the info of these people who bought a kit to affiliates desperate to sign people up. Company benefits twice. (Read full details on the Verge)

Herbalife had realized this and in 2013 have disallowed the use of most lead generations companies, esp. those ran or have close ties to its own affiliates. According to its own affiliate agreement, affiliates are prohibited from selling leads to each other, but these lead generations companies had NOT been scrutinized... UNTIL Ackman raised the pyramid scheme allegations.

While the Herbalife situation is rather unique, in that Shawn Dahl's company is a clone of his mother-in-laws pyramid operation outlawed in Canada (also for Herbalife), the phenomenon of creating potentially ILLEGAL business around supposedly legitimate companies is hardly unique to Herbalife.

Let us explore the underbelly of network marketing... You will learn about:

• How "fake" lead generation really works
• How "sales aid" companies perpetuate the "tool scam"
• How top affiliates get rich from training other affiliates
• How feeder matrix schemes feed pyramid schemes
• How fake ad posting requirements in Ponzi schemes spawn ad posting companies

Let's get started... First stop... How "fake" lead generation really works...

MLM Absurdities: MLMers Encouraging College Kids to Drop Out and Do MLM Full-time... Crazy.

One of the most dangerous absurdities is the notion that MLM offers an even playing field, therefore you need NO education to succeed in MLM, and thus, college is not necessary and a complete waste of money (thus you should drop out). Plenty of people dropped out of college and went on to successful ventures.

This is often used by MLMs that concentrate on younger people, such as Vemma, with their Verve energy drink line, signing college kids and even some high school kids as their affiliates (formerly "brand partners").

We have to look at this myth in separate pieces.

• Does network marketing really offer a level playing field? 
• Can *any one* succeed in network marketing? Or is talent / education required?  
• Is College a waste of money? 
• Are the the successful college dropouts actually relevant to the premise? 

Does Network Marketing Really Offer a Level Playing Field for All? 

One of the often repeated myths is that NM is a level playing field, in that anybody can succeed. 

Frankly, that is absurd. The idea that you have an upline and s/he benefits from YOUR work should tell you this is NOT level at all. He got there first. 

Furthermore, there are a LOT of circumstantial evidence that the industry is plagued by insider advantage and cronyism... just like the "regular corporate America". 

Did you know that a mother-daughter team in Vemma, both "Ambassadors" (making 15000 a month in commissions) actually is related to the head motivational speaker for Vemma, and the speaker is a close friend of head of Vemma BK Boreyko and his parents? 

Did you know that a member of Herbalife's Board of directors has TWELVE family members and relatives among the top-tier "President's Team"?  

Network Marketing is not as level as they want you to think. 

Can any one succeed in network marketing?

I've had network marketing enthusiasts claim that the top income careers all require heavy education or extreme amount of physical talent, like doctors, engineers, sports stars, and so on... Except network marketing.  The claim is anybody can succeed in network marketing, and the playing field is even. 

At first glance, this sounds reasonable, as the top twenty income careers based on US Bureau of Labor Statistics are mostly medical and engineering careers. However, is it true that any one can succeed in network marketing? 

US Bureau of Labor Statistics 2010 "20 highest paying occupations, by median annual pay, 2010 census data"
The top entries are doctors, surgeons, engineers, lawyers, and very senior managers

The idea that you need no education to succeed in network marketing is actually quite ludicrous. At the minimum, you need to learn how to market. It is network MARKETING, after all. While some people have a talent for it, all people need some tests to assess their skills and add some remedial lessons for the areas they are lacking. In a Harvard Business Review blog entry, the author estimated that 70% of top salespeople have innate talent or natural instincts that give them an edge ins ales, while 30% had to learn to sell, having no such talent.   

It's safe to say that if you had not specialized in sales career before, you probably don't have much sales talent or instinct. Thus, let's assume that you have no such talent or instinct. What are your chances of 'success'?

According to the same author, given 100 people with no talent, 40% will fail, 40% will do average, and 20% will do above average, in a sales career.

Keep in mind that in network marketing, in almost every major MLM, "average" means making a lot less than 2000. This is the figure directly from Direct Selling Association (DSA). As of 2012...  15.9 million people sold 31.63 billion worth of stuff in the US.

Now if you do the math... 31630/15.9 = 1989.31 dollars... that's average RETAIL sold per person.

That's not profit. That's just retail sold. Profit would be less than half of that, perhaps a LOT LESS. That's less than $1000 PER YEAR PER PERSON.

Extrapolating from that 40/40/20... That means 40% of you will earn practically nothing. 40% of you will earn just a little (less than $90 a month), and maybe 20% of you will actually earn enough to call it a part-time job. And a tiny percentage of that 20% will really really earn a car or whatever.

Saying that you *can* succeed in network marketing without an education is like saying anyone born in the US of A can be president. While factually true, it is of no practical use. It's like saying any valid lottery ticket has a chance of winning. Duh!

The reality is you will have to spend time and money and effort to become a good salesperson... assuming you have the right personality traits to be one. And you will keep paying for seminars, meetings, training calls, workshops, and so on and so forth, just like any other education.

Also keep in mind that there are TWO colleges in the US that offers courses in network marketing.

Bad Arguments: Misrepresenting Pyramid Schemes, esp. by people who should know better

Some of the most persistent bad arguments presented by network marketers (not just noobs, but also many veterans) are various misconceptions about pyramid schemes, and using those misconceptions to explain how network marketing is NOT like that. However, that explained nothing since the rebuttal is based on a misunderstanding.

Today, we shall explore a website called "Engineered Lifestyles" by a guy named Jamie Messina, who claimed to be an automotive engineer before getting bitten by the network marketing bug. You'd think that an engineer would know about a bit of critical thinking... but let's look at the evidence, rather than presumptions.

Okay, what does Jamie Messina say about pyramid schemes? This can be found at:

http://engineeredlifestyles.com/mlm/pyramid-scheme.html

For a page with the title "Recognizing Pyramid Schemes, and subtitle: Is MLM a Pyramid Scheme?", the page is surprising light on information, as there is not a proper definition of pyramid scheme on this page at all. Instead, the entire page is actually a sales pitch about network marketing in an attempt by pointing out the pyramid like structure is all around us therefore a pyramid shaped organization is nothing to be afraid of.

While technically correct, that pyramid shaped organization is all around us and nothing to be afraid of, it is IRRELEVANT as it has NOTHING to do with a "pyramid scheme". This is a very common obfuscation defense even by famous "advisors" such as Robert Kiyosaki. A pyramid scheme is a type of FINANCIAL FRAUD and nothing nothing to do with organizational shape of an organization.

Jamie has gotten off to a bad start. Let's see if he can redeem himself in the second half...

Why Is Robert Kiyosaki Trying to Shoehorn MLM onto his Cashflow Quadrant in the WRONG Quadrant?

One of the most frequent pro-MLM arguments from fans of network marketing is "Robert Kiyosaki likes it!" (with an implied "he knows what he's talking about!")

Previously, MLM Skeptic has documented that Kiyosaki was actually an Amway rep (and a rather unsuccessful one, as he never touted his success there, or rather, NEVER EVER mentioned it) once upon a time, his book only became successful because it was "discovered" by Bill Galvin, a then diamond Amway rep, who recommended his sales organization, i.e. Yager Team, adopt it wholesale, as a part of the "Amway Tool Scam".  With the sales numbers "kickstarted" via MLM, Kiyosaki went to Warner Business Books and FINALLY (after YEARS of trying) got a real publisher instead self-publishing.

Thus, let's just say that Robert Kiyosaki is not exactly an impartitial expert when it comes to network marketing. Because he owes his entire publishing success to it, he's unlikely to say bad things about it.

But let's analyze the book Rich Dad Poor Dad, and its sequel, Cashflow Quadrant instead, and how it REALLY applies to MLM.

Most people who got the "recruiter's version" of "why you should choose MLM" will basically explain to you that MLM is in the "B" quadrant of Cashflow Quadrant, which looks like this, from a MLMer...

Employee works for Business owner, "has a job"

Self-Employed, or specialists, controls/owns their own job

Business owners own a system, so they can sit back and their business will continue to make money. (they hire employees)

Investor owns investments... money makes more money.

Sounds pithy, yes? Nothing *really* wrong with that. But... Where does a MLMer fit in on this quadrant?

The MLMers will say that it's in "B" quadrant. In fact, even Kiyosaki claimed that "network marketing is what I recommend for people who want to move to the B quadrant".

WRONG!

Robert Kiyosaki's Faustian Bargain With Network Marketing Is Confirmed

Previously, MLM Skeptic has raised the question whether Robert Kiyosaki had made a Faustian bargain with Network Marketing 

That's when someone pointed me to this sound-bite from Amquix, which confirmed that Kiyosaki was a downline in Amway under Bill Galvin.

http://www.amquix.info/sounds/kiyosaki_in_amway.mp3

Bill Galvin was a "diamond" level sales leader in Amway from way back when. In fact, he was thanked in the dedication / acknowledgement page of "Rich Dad Poor Dad". Here's a screenshot from the Amazon "look inside" and there's the name "Bill Galvin" right there. In fact, if you Google the names on this list, most of them *are* high-level Amway IBOs.

This is also confirmed via research done by SimpleDollar

Amway Global (Photo credit: Wikipedia)

He [Robert T. Kiyosaki] was involved in several business deals (most notably, nylon Velcro wallets) in the 1970s and 1980s which fell apart, leaving him bankrupt in the mid-1980s. In this timeframe, he became heavily involved with Amway, a multi-level marketing system, and began to cultivate relationships with many of the “top” members. In 1985, Kiyosaki founded Cashflow Technologies, a company that was designed to pitch a series of books and other educational materials that eventually evolved into Rich Dad, Poor Dad. 

By the mid-1990s, Kiyosaki had self-printed Rich Dad, Poor Dad and it was starting to appear in wide distribution among members of the Amway/Quixtar organization, as individuals higher in the pyramid would recommend it to people further down the chain looking to get ahead. 

Yet you NEVER hear Kiyosaki talk about his MLM career, did you? Nope. It was NOT mentioned in ANY of his books.

Perhaps he doesn't want you to know, hmmm?

But wait, there's more!

Robert T. Kiyosaki's Sins, According to Robert T. Kiyosaki

Recently I ran into this rather amusing vidcap of a Kiyosaki video:

Yes, that's Robert T. Kiyosaki giving his "haters" a piece of his mind.

Well, according to Kiyosaki's own words, Kiyosaki's a sinner!

How so, you ask?

Ah, that's a story to tell. There's betrayal, there's vindication, there's a second betrayal, and lies to "spin doctor" the treachery into triumph.

So have a seat, and let us discover a chapter of "Rich Dad" that Kiyosaki would rather you not mention.