Is Everything an MLM? (2019)
annehelen.substack.com
annehelen.substack.com
See: Uber, Subway franchises, academia, Amazon truck drivers, or any of your classic MLMs
Counterfactual: franchises.
There was a segment on John Oliver's program about Subway being particularly predatory about this, as well as deliberately maintaining information asymmetry to mislead franchisees.
In which sense do you think franchises are counterfactual here?
Plenty of franchises have sustainably made money for the franchiser and the bulk of their franchisees. That stands in stark relief to the history of MLMs.
I think of the airlines and rewards programs, google identifying people, and silicon valley startups selling stock.
If your research into the Subway franchise indicates otherwise, I'm all eager to hear the counterfactuals.
That's not really the point. I'm not disputing the correctness, I'm saying your argument is flawed. Imagine I told you "the sky is blue, my cat told me so". Well sure, the sky is in fact blue, but that doesn't make my cat a good source of information. A comedian, even one playing as a social crusader, is not a source, much like my cat is not.
> If your research into the Subway franchise indicates otherwise, I'm all eager to hear the counterfactuals.
Do you mean counterarguments? Counterfactuals are things that didn't happen or are not true, not a response to an assertion.
I think we just have a different approach to communication. If you told me "the sky is blue, my cat told me so", I would probably just verify the color of the sky and completely disregard the 2nd portion.
And no, that doesn't make your response flawed, because it mentioned a cat. It just makes it padded with irrelevant information. Part of comprehension is filtering irrelevant stuff like that from text in order to arrive at distilled facts that can be checked or verified through an experiment.
Same way that my mentioning John Oliver doesn't really impact the weight of my arguments, since the facts within accurately reflect reality. It was just an irrelevant padding for context, not something that was supposed to give extra weight to my arguments.
Does that make sense?
I also feel the need to acknowledge that I'm slightly entertained to be conversing with "antisthenes" under the handle "seneca".
Information or power asymmetry is the problem. Sometimes it’s the other way around. E.g. a large retailer selling a small company’s products.
That first sentence was important context for the second.
1 person has limited time. They can be doing it themselves and still sell you the rights to do it too. It would be pure coincidence if the market demand fit exactly into 1 persons ability to supply it. I say 1, but this is not limited to 1 person.
Selling information is a valid transaction. It requires much less time, and the price is justified by a similar idealogy to having trade secrets. Yes I could pursue this list of 100 potentials and convert 5% of them for 50k over the next couple months OR I can sell it to someone else for 2k and do something else with my time.
If selling information is an established type of sale, then it follows that at a large enough scale of demand, someone can specialize in that sale rather than acting on the relevant information at all. And now AGAIN it would be pure coincidence if that 1 person specializing in selling only information is exactly meeting the demand for such activity. So they accept money to train others on how to sell information.
Hence the entire data broker industry.
The problem is that even though this truth exists, the trust involved is easily abusable. I don't think I need to explain how.
It isn't a pyramid scheme, but it can very easily become a saturated market where late comers end up getting no value back since there still is a very real limit on demand. But it is not good for sales for the people training others in the sale of information to acknowledge that limit, so it ultimately leads to people effectively getting scammed even without anyone explicitly trying to scam anyone.
>The materials touted that he could make more than $75,000 and perhaps as much as $300,000 every year. The application required that you have $10,000 in startup capital, but the ad he saw also said that the fee might be waived for veterans.
>Aside from Ramos, all of the business owners and drivers interviewed for this piece see themselves as working primarily for Amazon, not for an independent small business. That mentality has added to the disappointment for workers seeking autonomy
>“It’s not a partnership. This is working for Amazon,” the veteran said. “We DSPs are not business owners, we’re paid managers. They control every aspect.”
>After the DSP owner is paid by Amazon, the owner then has to pay the drivers, taxes, leases on the vans, repairs to the vans, new clothing (the physicality of the job means some drivers go through gear every couple of weeks), worker’s comp and other costs.
https://www.protocol.com/workplace/amazon-delivery-program-t...
The contractor manages the delivery schedule and logistics. The contractor purchases their own vehicles rather than leasing them from FedEx. They're paid per route and per package rather than based on a ratings model.
Furthermore, FedEx pay for brand placement on vehicles and for branded uniforms.
This is a much more equitable system: both FedEx and the contractor have skin in the game. The contractor company aren't vassals to the corporation: they own their trucks and can sell their routes and contract to another business if they'd like.
They do not provide any net value to the society, all they do is shift the risk onto the franchisee with a pretty much unilateral contract. You have to engage in whatever shit they come up with, like buying expensive equipment. (McDonald's pizza anyone?)
The only instances where a franchise makes sense is when a franchisee could realistically walk away from the contract and stay in the business somehow.
https://www.eposnow.com/us/resources/how-much-do-franchise-o...
He’s still doing well but it wasn’t a dominos kinda thing.
These are weird comparisons. In some cases, the individual is the sales function, in some cases its the supply function, in other cases its a full blown SBU.
I don't think you can bucket all of these into MLM, because, well, some of them have nothing to do with marketing (ya know, the M part of MLM).
If it were MLM, your local neighborhood Subway would by trying to sell you a franchise (instead of a sandwich)
Maybe we need a new term for these types of businesses. "Contract Predators" sounds about right. Maybe "Risk Pushers."
If she hadn't become a pharmacist, my wife's back-up plan was to be a chemical engineer, which generally means she would be working for an oil company baby-sitting a machine in a refinery. Over the same period that pharmacists job quality declined, ExxonMobil went from the largest company in the US by market capitalization to the 12th biggest in the US, and from what I've read the quality of life of ChemE's has declined a lot in step with that. So this clearly isn't something where "STEM jobs will save you."
I remain puzzled as to why software engineering seems to be immune to this overproduction problem. Is it just that since software is still eating the world, we haven't found a natural limit to the demand for our kind of engineers yet? Is it that we are so unproductive and failure-prone that we guarantee ourselves full employment?
Few reasons:
- While an ever increasing number of prospective students enter the field, a much lower number actually graduate.
- People that do graduate quickly get weeded out in technical interviews. This is why you see a high disconnect between unemployed devs and companies who claim they can't find talent.
- Of course the number of competent engineers in the field is going up as well, but that is matched by increased demand, as pretty much every company is now employing programmers for some business process.
Software Engineering is probably the widest and deepest career choice out there. For example, Web development is just a tiny piece of it.
I agree with that.
> A free labour market ensures that skilled people get allocated to the highest value work, which is a great outcome for everyone.
Value in terms of dollars is not really correlated with productive value to society. I think a lot of the software that's being built, shouldn't be built.
No correlation? No, I don't think that's true. Sure, there are externalities, but if something truly isn't valuable, you can't make money from it.
Also, what do you think shouldn't be built? I have a hard time coming up with "a lot" of software that has zero or negative value. Sometimes a startup will build something that doesn't end up being valuable, but it was at least potentially valuable, or it wouldn't have been funded.
You do seem to be discounting a STEM career / education, however. E.g. stating that "STEM jobs [won't] save you." Yes, there isn't much growth in the oil industry for chemical engineers or in the construction industry for civil engineers, but that doesn't necessarily mean the work or jobs are bad. You can still earn a decent living doing fun, mentally challenging work. You might not make 600k a year doing it, but you can probably get close to 400k household income if your partner also does it.
Universities are not in the business of properly meeting labor demands of the market with skilled workers, and they never have been. Their goal is to increase enrollment and capture as much grant and tuition money as they can. Universities don't care if too many lawyers, chemical engineers, etc. are being trained.
There are several paths into software engineering, many of which bypass the education industrial complex. It's getting easier to access just the education needed to do a technical job like programming.
> Is it that we are so unproductive and failure-prone that we guarantee ourselves full employment?
I think there's some truth to this, but I also speculate that software devs are much more productive as a cohort than we like to let on. Just think about quickly everything in the industry changes. There's a new way to write JS apps every 3 months and a major breaking, paradigm-shifting change to React every couple years it seems like, and that's just the web side. Most workers don't have to deal with the amount of change throughout their careers as programmers do, and it is absolutely exhausting.
Example industries I’ve worked in: pro audio(Avid), consumer hardware (Apple), social networks (Facebook), medical marijuana, education, crypto currency (Coinbase).
My work has impacted tens of millions of people and generated massive revenues for the companies I’ve worked for.
Sadly Chemical engineers and pharmacists are very specialized jobs that often require masters degrees and hence don’t have the same career flexibility.
This friction in career switching combined with the cost of education in the USA is a big problem. Their are few professions that offer the same bang for your buck as software engineering. We are a very privileged and lucky group of people.
Considering that everyone in the 1st world country has access to a computer, and given that much of our lives are entangled by software, it's just a demand problem. The demand for software completely outstrips the number of software engineers available. Given people's short attention spans, and the incredible number of concentration and patience the discipline requires, I expect the shortage to continue for the foreseeable future.
Future jobs will expect coding as a skill, not an end to itself. You can even see the inklings today with the explosion of data science, analysis, and digital marketing. In two decades, with an assumed coding skill, we'll have orders of magnitude more. Just as we can ask today, "What happened to all the typists?" we'll be able to ask, "What happened to all the coders?"
1. https://fred.stlouisfed.org/series/LEU0254503100A
2. http://ibmselectric.blogspot.com/2016/03/topaz-bronze-select...
3. https://teachyourkidscode.com/
4. https://www.monster.com/career-advice/article/how-to-teach-k...
1. hilariously this result was found when searching "advice for typists" https://www.typinglounge.com/finger-exercises
Right now, we professional coders make our living because we have trained our brains to think like a computer does. It's why we can tell them what to do, but it means that we simply don't think like a "normal" does. As long as that is true, I doubt that it is possible to be as common as typing skills.
If it is possible to develop a programming language that is high enough level that it can actually be written by a normal who thinks in normal, human ways, then that might change things. Or if it possible to build a computer that thinks in human ways enough that you could give it natural language direction like you would to a human, either of those would render the skill of "thinking like a computer" obsolete, but I'm pretty sure that the solution isn't going to be "everyone is now expected to think like a computer." That's just too hard a lift for most people.
What is astounding is that the victims of MLMs never see it, not even after the fact. If greed drives the spread, delusion prevents building herd immunity. It's the weaponization of Mark Twain's old saw about the American poor believing they are just millionaires down on their luck.
I think the end-game will be an MLM-as-a-service (MaaS) which services those enterprising folk who see the only way to profit from an MLM is to make a new one, and so start at the top. Make it easy and factor out everything but branding and sales. The customer would pick their product archetype (vitamins, cosmetics, whatever), pick a name and a logo that gets put on the boxes at the factory, and be on your way. Enrollment, payments, shipping, and all of that is all taken care of. For a small fee, of course.
Arguably, the ICO boom was a realization of this end-game. There were guides to create a new etherium-backed crypto token in minutes, services to help create and manage them, and so on. Each ICO functioned as its own MLM, with the differentiating factor usually being branding, sales, and whitepaper quality.
Programmers / designers pay yoga teachers for yoga.
Yoga teachers pay the drop shippers to learn drop shipping.
The drop shippers are all paying crypto gurus to learn crypto trading
And the crypto gurus are all in bootcamps to become programmers.
And everyone is simultaneously trying to become a yoga teacher.
It's a big circle of everyone trying to make money by selling a way to continue to be a nomad to other people who are already nomads but are running out of money by claiming that their thing is the stable way (which it isn't because they need to pyramid scheme it to get by).
edit: forgot to throw in, there is a lot of "life coaching" going on in all of this
Low wage jobs have shitty wages and conditions, because "at least you're not living on the street". Professional jobs (and the academic institutions that support them) can demand insane requirements for their candidates, because "at least you're not flipping burgers."
This leads to young people flocking to different degrees in a desperate attempt for some level of security. There pushed by the promise that if they bust their ass with a degree, maybe they'll get a decent job that allows them to eventually retire.
Ultimately, this isn't a college problem, or an "MLM" problem. Conditions won't improve unless people have the ability to say no to unreasonable demands.
"Any sufficiently advanced business model is indistinguishable from a scam."
https://www.cnbc.com/2022/06/02/24-year-old-who-makes-8000-a...
Outside of for-profit and lower-tier schools that really have no business issuing postgraduate degrees, the worst that happens to postgraduate degree holders is that their income model takes a ding for not having been in industry since getting their undergraduate degree. but they still mostly have a prosperous future.
Grad students get exploited as cheap labor when they could have been making more, and advancing industry careers, for sure. But that's not nearly as sad as turning people of low education and low attainment into pyramid scheme victims. That's outright evil.
For example a new chat application might require 10.000 users to pay off for the computing power needed to run the servers, so until you reach those 10.000 users you need to lure them in promising everything will work just fine. If you reach that threshold then everything will indeed be fine, but if you don't and run out of money you'll have to let a lot of people hanging. An MLM cannot possibly reach that threshold.
https://en.wikipedia.org/wiki/Multi-level_marketing
> MLM salespeople are, therefore, expected to sell products directly to end-user retail consumers by means of relationship referrals and word of mouth marketing, but more importantly they are incentivized to recruit others to join the company's distribution chain as fellow salespeople so that these can become downline distributors.[1][8] According to a report that studied the business models of 350 MLM companies in the United States, published on the Federal Trade Commission's website, at least 99% of people who join MLM companies lose money.[9][10] Nonetheless, MLM companies function because downline participants are encouraged to hold onto the belief that they can achieve large returns, while the statistical improbability of this is de-emphasized. MLM companies have been made illegal or otherwise strictly regulated in some jurisdictions as merely variations of the traditional pyramid scheme.[11][12]
I don't get it. Were people getting canceled for saying "pyramid scheme" or something?
It's actually different though the business model is the same.
Pyramid schemes actually frequently ran without an actual product. Those were made illegal (in the US). MLM's have a product but selling the product is secondary to recruiting underlings. The way to make money in an MLM is to never buy the product and recruit people who buy and you get a cut.
(Btw: TTRPGs = Table-Top RolePlaying Games :P)
Everything is adtech,
Everything is marketing, surveillance, and spam...Close, but not quite - because you end up selling to management or executives when it's the rank-and-file who actually use the software and don't get much purchasing power.
In this case, the problem is the overblown enthusiasm for 10x-type employees - because no one trains anymore - and the lengths companies will go to find them. Contrary to the situation described in the article, the end goal is to find singular workers who can be paid exorbitant salaries (but still less than the cost of the teams they'd replace). It's a very difficult problem, so if you're unsuccessful, the next best option is to simply outsource responsibility. The MLM-ization of society is something akin to cancer, in that the causes are multitudinous.
Yep, I'd say that capitalism itself is an MLM.
> *A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products
Unless, of course, we reach the inevitable point where resources become so scarce that no one can consume anymore. But that future is still distant enough to be systematically ignored. Hell, even climate change is still being barely addressed.
This is why, for example, people are always encouraged to have children. It's marketing to coerce people to reel more people (in that case, unborn people) into the scheme.
What's the difference between that and any other MLM?
That’s an absurd take.
In fact, there are capitalist countries (coughJapan) where encouraging baby-making, in the face of a demographic crisis that threatens to catastrophically disrupt economic stability, is state policy.