Analysis of Wazzub June 1st Webinar Transcript

NOTE to readers: a different reader pointed me to this "transcript" at webinarrecap.blogspot.com that supposedly is the recap of the June 1st 2012 Wazzub webinar. While I have not yet confirmed the accuracy of this transcript, I don't doubt its authenticity. Thus, I will analyze it as if it is real.

For the following, all of "their" text will be in blue, while my comments will be in red. Format will be changed to divide up the statements, opinions, and so on, but no content will be affected.

From here, I will refer to Wazzub / Perfect Internet just as "Wazzub".

The most stupid question in MLM, or is it?

Here comes probably the most stupid question in MLM to ask your "sponsor".

"How much can I make if I join, realistically?"

MLM veteran Len Clements says you should not even ask, as it'll not get you a straight answer.  It would be a stupid question.

Why? Because there are many unknown factors. It'd be like (his metaphor), if you are a great high school basketball player asking a college recruiter "How many NCAA championship rings will I get if I go to your university?"

He is absolutely correct. That would be the "anecdotal fallacy", where one person claim his personal experience can be easily replicated, when we don't know what other factors, such as his personality, his salesmanship, his charm, his friends and family (susceptible to his sales), his social circle (access to market), and so on, would affect his success.

However, I think you should ask the question any way, and I'll explain why.

When Experts Fail: the "appeal to improper authority" fallacy

You should not accept advice from just about anybody just because they are the closest person available.

EXPERT, but is he YOUR expert?
And how do you know he didn't give
bad advice?  (Photo credit: Pete Prodoehl)

Would you trust computer security advice from some sales clerk in some store, like Best Buy / Office Depot / whatever? Or accept car engine calibration advice from some oil change guy in your local Fast Lube Oil Change?

Well... Maybe, but only if it's actually GOOD advice, something you are NOT equipped to determine, as that's why you're seeking the advice in the first place!

Ah, but you say, I'll just ask an expert!

So what constitutes an expert?

Bad Argument: "Show you face!"

Logical Fallacies 3 (Photo credit: Mark Klotz)

Some critics of scams and/or MLMs prefer to keep their identity hidden, and let their analysis and evidence speak for themselves. They do not want to be accused of using "appeal to authority", as in "I am an expert, trust me".

MLMers, to "defend" their opportunity against criticism from such critic, will often respond with the "show your face" tactic.  It takes the form of "He won't show his face, thus what he said cannot be trusted." It is a variant of genetic fallacy.

Genetic fallacy is a fallacy because the argument presented is not affected by who made it. Does it matter who said 'X+Y=Z', a homeless person, or a billionaire? No. The source of the argument is a red herring. 

"Show your face" tactic expands upon genetic fallacy by adding "appeal to emotion" / reciprocity to the retort. Instead of addressing the argument, logic, and/or evidence, they are appealing to emotion (we don't know who he is!), and demanding disclosure (he must tell us who he is!)

"Show your face" is also often followed by circular reasoning ("he can't be trusted because he won't show his face, he won't show his face because he has ulterior motives, he has ulterior motives so he can't be trusted")

Why you should NOT choose overcomplicated compensation plans

What does Mega Millions lottery have in common
with overly complicated MLM compensation plans?
(Photo credit: Wikipedia)

People look at any income opportunity, MLM or not, for the income.

However, there are THREE aspects to any decision making: cost, risk, reward.

Income, is obviously the reward.

Cost would be "what do I have to do / pay to earn the income?"

Risk would be "what are the chances I would get little to nothing for whatever I did / paid?"

Ideally, all three factors would be crystal clear. However, in practice, most MLM plans are only clear on the reward, but not the cost or risk. Indeed, some MLM comp plans are INFAMOUS for being so obtuse it takes several single-spaced pages to explain it in detail, and even its own members have a hard time explaining things.  Most simply gloss over it. There's personal volume, there's bonus volume, there's shares, commission, levels, tables, matrices, and more.

It's gotten so complicated that often the comp plan has been distilled down to "what you can get", but NOT "how you get it". For example, "you share 6 levels down" and "car bonus" are simple comparison points. A comp plan with 6 levels down ought to be better than one that only offers 5 levels down, right? And one with a car bonus ought to be better than one without, right? WRONG! Because you don't know HOW TO GET IT OR THE CHANCE OF GETTING IT!

In other words, an overly complicated comp plan leads people to highlight the reward, and minimize cost and risk, leading to a completely distorted picture.

Explaining WHY is Social Security NOT a Ponzi scheme

When a business is suspected to be a Ponzi scheme, there are two general lines of defense, which goes like this:

Approach 1

A: Biz X is a Ponzi because of X, Y, and Z.
B: BizX is not a Ponzi because of R, S, and T.

Approach 2

A: Biz X is a Ponzi because of ____, ____, and ____.
B: Ponzi you say? No big deal. Social security is a Ponzi scheme. It's still here.

The problem with Approach 2 is it's an application of "so is everything else" defense, which is a variant of the "Tu Quoque" fallacy (which is a red herring).

However, I am going to address this specific fallacy, that Social Security is a Ponzi scheme. Actually, I am not. I am going to let a famous author, who basically wrote *the* book on Ponzi schemes, to bust this myth.

Subjective Validation, or Why you see more than you should

General evaluation scale.
Do you ever evaluate yourself fairly?
Or are you tricking yourself into believing
whatever you yourself believe in?
(Photo credit: billsoPHOTO)

Subjective validation is a variant of confirmation bias, and it's nothing new.

Few if any people are capable of proper self evaluation. When exposed to statements possibly describing oneself, one's mind started to make associations for validation, and often such associations turned out to be completely bogus. Basically, one's mind looks for meaning that may not be there.

This fact had been exploited by the Oracle of Delphi, and every psychic and guru (such as Nostradamus) ever since. They issue extremely vague prophecies and people reading their own meanings into it.

People who wish to change your mind (for better or for worse) are exploiting this mental bias. Self-help people from Dr. Phil to Joel Olsteen use the messages to compel you to improve parts or your life, and less scrupulous people are using the same mental bias to compel you to do some things that may not be good for you.