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Comment by thewebcount | Hacker News Reader

I feel like this could describe a lot of the culture around startups, too:

> Until we all begin to acknowledge there’s more to life than “the hustle,” and that struggling financially is not a personal failure, MLMs will continue to recruit and exploit aspiring girlbosses under the guise of female empowerment.

You could easily change that to:

> Until we all begin to acknowledge there’s more to life than “the hustle,” and that struggling financially is not a personal failure, startup culture will continue to recruit and exploit people under the guise of [getting rich, disrupting tech, changing the world, etc.].

I mean, it’s not an organized thing like an MLM, but I see a lot of the same toxic language and behavior around startups.

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I'll buck the trend and downvote.

I dislike the hard-link comparison to startups. I personally know people who got sucked into MLMs and are almost exclusively lower income families. There are literal playbooks, talking points from the organized MLM's themselves on how to "recruit" your families and get them to buy their own product so they raise in "status".

If you're connected to military moms' or lower income groups you know how pervasive and destructive these MLMs can be to these families. Not sure if you have any idea, but it is incredibly frustrating, disheartening to talk to them about how it's hurting them. In my case, it was their own cousin who got them involved and ultimately into debt. Not a 20's single-no-attachment, but this friend has a family to care for. I get angry simply remembering this. The only thing worse was for profit education.

Startups simply aren't at that level and even bringing this argument into play detracts from the focus of how destructive MLMs are.

I think it's all the same ocean and a lot of foul creatures swim in it. Some of them are getting you into an MLM where you shuck oysters on a TikTok Live, some of them are selling you grifty courses about flipping houses, and some of them are selling you grifty courses about getting a job in tech. They're not necessarily all morally equivalent, but they're drawing from the same well of rise and grind hustle culture.

MLMs are especially pernicious and harmful, but we do ourselves a disservice if we blind ourselves to the toxic culture that enables them - one that extends far beyond just MLMs.

Apparently, you've never watched those start-up tutorials sold on YouTube. Half the course is spent on arguing that by paying $2000 to learn how to make your own iOS apps, you're "investing in yourself". And of course the people that run the course make most of their money from running the course and not from actually releasing iOS apps...

I recommend "Contrepreneurs: The Mikkelsen Twins" by "Folding Ideas" https://www.youtube.com/watch?v=biYciU1uiUw

To be fair, any profession or field can be turned into a con. Just because deepak chopra advocates quantum healing doesn't mean the field itself is corrupt. MLM are by definition corrupt but startups aren't.

Maybe there is a tipping point where we start saying that "startup" is no longer a positive word.

Amount of wannapreneurs loosing money on scams, amounts of young adults exploited to work for below market rates for years, amount of scammers hiding under "startup" banner getting money from VCs or small investors are not "one Deepak using quantum healing".

> Just because deepak chopra advocates quantum healing doesn't mean the field itself is corrupt.

I must not be understanding what you mean. The field of quantum healing is entirely corrupt. There is no such thing, it's all bunk. Do you mean that quantum physics isn't corrupt? Because I doubt anybody thinks that.

"people that run the course make most of their money from running the course and not from actually releasing iOS apps..."

This is so pervasive. Even in the mainstream economy where we see universities marketing courses that might seem to lead to employment but in fact are very niche with little chance of leading to a job in that specialism.

I've been looking for piano tuition recently and it's refreshing to see marketing along the lines of how much enjoyment you'll get, with potential to entertain your friends at parties.

> Apparently, you've never watched those start-up tutorials sold on YouTube.

I have not. Probably because they simply aren't a significant part of tech or startup culture.

Not to you. Kids starting will easily believe that is startup culture.

I don't understand how Kids have an inaccurate and incomplete understanding of the world is supposed to be a rebuttal.

I don't understand how no-true-scotsmanning "startup culture" is helping either.

> A no true Scotsman fallacy, or appeal to purity, is a fallacy where the one arguing says or writes that all people belonging to a certain group have the same trait, and those in that group who do not share that trait are not really part of that group.

Care to point out where I made any universal claims about startup culture?

"Those MLM videos dont represent real startup/tech culture"

For the record, I agree with you.

The same MLM scam ads exist for becoming a cryptocurrency investor.

Kids will also easily believe that is cryptocurrencies.

The beautiful cryptography is completely shadowed by speculation.

And the kids would be correct in believing that.

This feels like concern baiting.

The comment you replied to wasn't "Startups are MLMs" and in fact goes out of its way to state that it's not implying they're identical, yet you still force your way into interpreting it in the least useful way possible.

The fact is, of course startups are not MLMs: but there are shared threads in how they lead to fallacious thought that puts someone else's goals and profit ahead of your own time, money, and general sanity based on not much more than a vague promise of a future payout.

> This feels like concern baiting.

I'll agree with you on this because I am trying to switch the concern - putting it back on how bad MLMs are in line with the article.

If you read the article and then read the most upvoted comment, it says "Oh yeah that's terrible, and look at how startup's terrible too in really similar ways!" That is "what-about-ism" - This is bad, "but what about..." Focus shifting.

It's the literal opposite of whataboutism. In no way, shape, or form, did the comment try to use startups to make MLMs look less bad, and in fact it did the exact opposite.

You're on a site where a disproportionate number of people are involved in startups/startup culture, and are also disproportionately in socioeconomic positions further removed from the effects for an MLM than a random population sample*.

(* I hesitate to even say this since I don't trust you won't try and build an enormous strawman argument out of it, trying to paint this as a "oh well readers here are to rich to care?!". I'm from a 3rd world country, so no, that's not it either.)

Drawing parallels to a topic that's relatable to the reader is exactly what you'd expect in any half decent comment section.

At the end of the day you're saying you intentionally interpreted the comment in bad faith as a springboard to push your own take. A take which just repeats the literal contents of the article rather than interpreting it in a novel way.

I appreciate the feedback but it looks like we won't see eye-to-eye.

> did the comment try to use startups to make MLMs look less bad, and in fact it did the exact opposite.

So you read OP's comment and thought "Wow, MLMs are even worse because startups have toxic culture."?

I did not. I read that comment and thought "now the most upvoted thread will talk about startups" instead of MLMs and how they should be regulated like for profit schools.

> Drawing parallels to a topic that's relatable to the reader is exactly what you'd expect in any half decent comment section.

> At the end of the day you're saying you intentionally interpreted the comment in bad faith as a springboard to push your own take.

Again, agreed, I do take the comment in bad faith, which is why I voiced my disagreement and downvoted. Because the parent comment did exactly what you state, drew parallels to something that "people understand" here by trying to make startups and MLMs morally equivalent with the phrase "You could easily change that to:".

That surface deep parallelism detracts away how destructive MLMs are - hence my comment from personal experience.

> I hesitate to even say this since I don't trust you won't try and build an enormous strawman argument out of it, trying to paint this as a "oh well readers here are to rich to care?!"

Not sure what you're trying to preempt here, but quite a weird comment, sort of a strawman of strawman.

It's interesting because we're starting from the same position. What you're accusing me of - I'm agreeing with you because that's what I'm trying to do, but the conclusions end up being different - thus, never eye-to-eye.

I think you've misinterpreted broadening the conversation ("this was interesting, but what about this other topic?") with deflection ("are MLMs harmful? Well, other businesses are not angels either you know, what about the crimes of startup culture?").

Whataboutism is necessarily a deflection relying on a stated or implied moral equivalence between something under scrutiny and something irrelevant. Accepting the premise that something is problematic and asking whether that reflects a problem in other places is introducing a new topic of discussion to a conversation. You are free to criticize that, but whataboutism is a mischaracterization.

(And in a strange coincidence, this is the second time I've defined whataboutism today, in unrelated threads. https://news.ycombinator.com/item?id=34919705)

> You are free to criticize that, but whataboutism is a mischaracterization.

I think this is the root of it. That the parent comment does the moral equivalence action with "You could easily change that to:" and then inserts startups.

The assertion that I'm rejecting is the mischaracterization of startups. There absolutely are predatory startups, 100%, but to say as-a-group/whole that they're anywhere near the moral equivalence is what I'm rejecting.

[edit]

I realize replying to the other comment is - I didn't want the most upvoted thread to be about how toxic, predatory startups are. I could see this forum would easily agree to that and discuss it at length. And that's why I called it "whataboutism" because it's focus shifting and you're right, probably less about mischaracterization.

May I offer you a piece of advice, which is to try not to let it bother you too much if the top thread is something other than what you'd prefer? I know how frustrating that is, I experience that all the time on this site. But it's outside of our control what people want to talk about. You can't push the river, but you can exhaust yourself trying.

Paradoxically, I personally believe that only by accepting this and giving up on trying to steer the conversation or convince anyone of anything can you engage in a way that might accomplish those things. Or at least, for myself personally, I find that when I get too invested my rhetoric gets too heated and I feel all sorts of perverse "someone is wrong on the internet" pressure, and I write dumb stuff that makes people angry but convinces no one of anything.

Thanks I appreciate the wisdom.

I agree with the distinctions you've drawn. But this is hn so it's not unreasonable to make that startup comparison here, while it would be absurd if we had the same conversation on r/antimlm .

This is where we talk about the "accredited investor rule".

Startups do not usually require the people brought in to put in actual money. They put in time, for which they are paid with a mixture of cash, and equity which is basically a lottery ticket. But they do not flow money back to the founders. Generally the only people putting in actual money are those who can afford to lose it. Occasionally on HN I've seen people complaining that they can't sell shares to friends and family - or buy a startup they "know" is going to take off. But this is why: it's too easy to be fraudulent.

Now, what field has no such protections? ICOs and cryptocurrency. What field is rife with fraud that's been called "MLM for men"? ICOs and cryptocurrency.

The word "startup" is used for multiple different things.

One is funded by VCs, pays you a healthy salary, and gives you a shot, if you're lucky, at wheelbarrows of money from stock options.

Another is a pretend job you do from the age of about 23 until 37, mostly by yourself, bouncing between "accelerators" and "mentors", paying yourself a wage that a graduate student would feel sorry for, slowly getting old, and eventually realizing, as you approach 40, that you are now actually unemployable.

They're not the same.

Information asymmetry is everywhere. In some cases this asymmetry is through organised structured hierarchy (employee vs manager/boss vs ceo/founder vs investor) and in some other cases there is no apparent overtly visible hierarchy – like open markets.

Markets are "efficient" at transferring money from "stupid" to "smart" people. Here "stupid" or "smart" is directly related to lower or higher in that information/power hierarchy.

This hierarchy is also self-amplifying in that it grows the asymmetry gap rapidly such that it becomes a very tall/pointy pyramid. So you could call it a "pyramid scheme".

Some schemes are overt/explicit pyramid schemes where flow of value from people lower in hierarchy to people higher is explicitly structured and visible (like most MLM schemes) and some schemes are obfuscated/implicit in this aspect (like corporate job ladder with perf/promo process within employees and between employees vs founders/execs and investors).

I think you are mixing up the general concept "hiearchy" with the very concrete concept of a "pyramid scheme".

The defining characteristic of a pyramid scheme is that the income at each level is predominantly connected to the recruitment of new members into the scheme. Twice as many new members per unit time translates to twice as much income, roughly speaking.

In management hierarchies, that may play a certain role, but your manager in a company isn't payed proportionally to how many new employees they recruit each month (unless they are explicitly a recruiter). It is rather proportional to the amount of responsibility which often correllates to the number of reports and their reports.

In other words, oversimplified, in corporate hierarchies, the pay relates to the number of people below you, while in a pyramid scheme, it relates to the first derivative of that value.

Except even if you receive money for a referral, you are still not getting any money FROM the referral.

My company gives 5k if I reference a developer that they hire. But he gets his normal salary, it’s not like he has to pay 5k, or even it’s deducted from the salary.

The problem with MLMs is that the money comes from other “members” not from sales… (Basically more than 80% of the revenue is other members and only 20% sales)

A normal company 100% of the salaries comes from sales (or shareholders, never from employees).

> Markets are "efficient" at transferring money from "stupid" to "smart" people. Here "stupid" or "smart" is directly related to lower or higher in that information/power hierarchy.

Why not just say "Markets are efficient at transferring money from less powerful to more powerful people." then?

Because not everything is about power. Redefining things as such is a net negative to communication.

information asymmetry is a kind of power, though. Your rebuke hinges on narrowing definition or common sense understanding of the term.

No, it's not reducing. In theory you can define anything as "power". If I know any fact you don't then, by your definition, I have power. But describing that as a power imbalance is a 100% hindrance to communication.

(Disclaimer: not intended as a complaint/disagreement with vinay_ys' comment, more of a rant about how I feel like how humanity as a whole could do a lot more to escape from zero-sum game scenarios)

> Markets are "efficient" at transferring money from "stupid" to "smart" people. Here "stupid" or "smart" is directly related to lower or higher in that information/power hierarchy.

Tangent: while this clearly applies in this context, I generally get really frustrated by this narrow way of modeling markets and by extension the economy, TBH, because it leaves out basically everything that's relevant to solving the really hard problems. Specifically, it ignores that real-life scenarios are not only strict hierarchies but complex networks that feature a ton of intransitive asymmetries (think rock-paper-scissors). Like, Buffet and Gates allegedly know about this[0] so it's not exactly obscure, and when you actually ask people on how they deal with trivial examples of it it becomes obvious that it's everywhere and people somehow try to work with it all the time[1], but whenever I hear people discuss markets it seems to be ignored. I dunno, I hope actual economists are less naive than the armchair kind (to which I certainly belong).

It kind of makes the misuse of the model feel like applying an algorithm that only works with DAGs to graphs full of cycles. It's not useless (just like how identifying DAGs is really important and useful), but when used to oversimplify complex scenarios it obscures the potential "good" cycles (virtuous ones) and "bad" ones (vicious cycles, deadlocks).

[0] https://www.quantamagazine.org/mathematicians-roll-dice-and-...

[1] https://aeon.co/essays/attempts-to-choose-the-best-life-may-...

The papers/articles you quoted actually strengthen my argument. The information asymmetry is also about education/comprehension of complex concepts and rules of operating. Vast majority of humans participating in the economy (including a lot of smart techies) don't have sufficient access or strong enough aptitude/interest to seek out and learn such things to make material difference to their decisions. Instead they depend on psychological shortcuts to make "poor" decisions that keeps them lower in that information/power hierarchy. The game theory aspect of it is this – it is in in the best interest of the few to maintain/reinforce the mechanisms at play to keep the masses blissfully ignorant and continue to be dependant on those psychological shortcuts. If more and more people become conscious of it and start to "squeeze" the value in the middle of the value-chain, then the value accruing to the people at the top significantly reduces. Usually when that happens, powerful people change the rules of the game to reintroduce more information asymmetry again.

The study linked in the article says that 99% of MLM participants end up losing money. Unless you have some data to back up similar stats for startup employees, you're creating a false equivalence (and a startup failing isn't the same thing as the employees ending up with a net loss, mind you).

https://www.ftc.gov/sites/default/files/documents/public_com...

“ The epiphany that explains the crypto boom, Andrew Tate, “passive income” strategies, dropshipping, finance influencers, executive training programs, meme stocks, etc is the commercial realization that American men are extremely susceptible to multi-level marketing schemes”

https://mobile.twitter.com/jherrerx/status/16123398697071083...

A thing is only an MLM if the people at the top of it are actually getting rich off of the backs of the people below them. Which is true of some of the things in that list. But for others (e.g. dropshipping — and also "freelancing" for companies like Uber) it's just participation in a sector-wide race-to-the-bottom, where the free competition and commoditization of every role in the system drives margins at every step to zero, resulting in literally nobody getting rich.

Pretty sure alibaba and über execs are doing just fine financially.

The people at "the top" of dropshipping aren't AliExpress/Wish/etc; they're rather the job-shop owners making the junk that gets sold on these sites. The supply chain originating from these factories existed long before these online dollar stores came into being as middle-men in it; before the online-ification of dollar stores, these factories used to directly contract with buyer-importers working for the brick-and-mortar dollar-store chains!

These factories have never done too well for themselves. There's a reason they never achieve "escape velocity" into having brand recognition. Even before giant online dollar stores, their production (injection molding not-very-detailed plastic parts, etc) has always been a commodity; whoever's ordering runs of 10000 Alf stress-balls or what-have-you could swap Factory A out for Factory B at the drop of a hat. (And this is why you never hear of factories in China with genuinely good working conditions; the margins are too low for paying a living wage to be sustainable for the employer. And yes, this does imply that the businesses themselves shouldn't exist.)

Also, while AliExpress/Wish/etc do make a profit, they do so on the back of a market distortion — the Universal Postal Union's special rates+tarriffs exception for ePackets shipped from China. Remove that, and such companies would collapse overnight.

Surely the people at "the top" are the shareholders in AliExpress/Wish/Uber? The MLM is just a few levels, with everyone invested in making profits for the company that controls the platform.

Multi-Level Marketing has a very specific definition — it's a tree of people reselling ("marketing") stuff, on the expectation that the person at the next level will be able to resell ("market") it in turn to an even-bigger sucker. Or an end-user, maybe, eventually.

Something being an MLM, implies that the original producer of the product — either literally the factory, or the business that ordered the product from the factory as a work-for-hire to then begin marketing it — is the root node in that tree of reselling, and so is the one getting the most rich, since everyone else in the tree has part of their profits flowing back to them.

If a middle-man between the producer and consumer is getting richer than the producer is, then you're not looking at an MLM. You might be looking at some other kind of immoral market manipulation, but it's not specifically an MLM per se.

I don't think they're "the top" of a pyramid. They're just selling their trinkets to whoever pays. If you want to buy a bunch of units, so much the better.

Also, I think some of this is somewhat outdated: wages in China have risen, and the really low-quality and low-wage manufacturing has started to migrate to SE Asia.

Well, yeah, that's what I said: dropshipping isn't an MLM. There's no pyramid there. It's just a race-to-the-bottom, but one with lots of hangers-on at various steps realizing they can "sell shovels in a [self-proclaimed] gold rush" to various parts of this logistics chain if they can convince them they need the help.

The guy who sells guides to "starting your own business" by drop shipping is not exactly running an MLM I suppose, but he's taking suckers for a ride all the same.

Unless you don't have the time/energy/learning style and want to learn about drop shipping you pay for a course. Many developers are self taught but others paid for someone to teach them.

This is assuming that the person teaching the course actually has a clue.

Yeah but the different is that the drop shipping course is typically marketed in a misleading way that misrepresents how much one stands to gain.

With dropshipping, there are a lot of "pay me $500 and I'll teach to you get rich dropshipping!" classes.

It's not quite the same as an MLM because the teacher doesn't get continuous income off the people they recruit after they finish the class, but it is like an MLM in the sense that the people recruiting people to their class are the only people making any money. And they tend to create "levels" of classes, etc to keep people paying.

This is „selling shovels in a gold rush“ and has flat hierarchy.

MLM requires the mid tier to aggressively re-sell it down the line. Which is where the worst part comes from.

You mean like those guys that purchased an online course on how to run a walled-garden online course and then are aggressively selling their own online course (on how to run a walled-garden online course) ?

Yes. But courses on dropshipping don't teach you how to teach others to do dropshipping.

> A thing is only an MLM if the people at the top of it are actually getting rich off of the backs of the people below them

… otherwise it’s just sparkling scam? ;)

It depends on the context – at the peak of Uber/Ola in India I met and spoke to a lot of drivers – they came from villages where they left behind agricultural land and large joint-family life (agriculture is hard/risky work no doubt, joint-family can be judgemental and lack personal freedom) for the promise of romanticised independent city life and being your own boss. What they didn't understand fully was that they were being saddled with a car loan and a commitment to drive 16+ hours per day and sleep in the car and eat poorly for several years just to meet the car loan payments, fuel and maintenance for the car and also send some leftover money back home. Performance incentive bonuses paid by Uber/Ola were strong early on to attract and grow this base. But it quickly dried up after the first few years. So, the drivers who did well in those first few years became the brand ambassadors to recruit more drivers. Those who joined in the later years are screwed. Meanwhile the company valuation grows exponentially and goes public and helps transfer more money from retail investors to early institutional investors etc. In this there are examples of multiple levels of information asymmetry resulting in a few getting rich off the backs of sweat and tears of a lot of people.

>American men are extremely susceptible to multi-level marketing schemes

Men are under extreme environmental pressures to be successful providers. Perhaps it's why they suffer the highest suicide rates. Equating their eagerness to provide for loved ones with susceptibility (i.e. stupidity) is misguided.

These don't seem like MLM schemes...

He also calls Trump and the Proud Boys MLM schemes, which shows he's using some definition completely different to the normal one. Probably just wanted to say "stupid people".

MLM targets mostly women, not men (probably because more socialization is required for that particular kind of scam). Everyone loves easy money, we have reached perfect gender equality in that respect )

It's extremely bad in Utah's startup scene, and I'm sure that is because we are also the MLM capital of the world.

So many startups pop up and they don't even seem to have a good idea for solving a problem. It's a bunch of MBAs who think hiring a million engineers and having them build something will make everyone involved rich.

That’s startup culture everywhere.

And as long as the staff and founders areon payroll and not making terrible sacrifices, it’s just voluntary wealth transfer.

Yesterday there was a story on the HN front page about a professor at the State University of New York at Albany who acts as an expert witness in litigation, sometimes in suits against Monsanto. He is 86 years old. Some commenter called this a "side hustle". WTF does this term mean, nevermind how ridiculous it is to apply it to this gentleman.^1 What purpose does it serve to use the term "side hustle". How does it improve upon the language that already exists.

1. Generally there are very few if any "full-time" expert witnesses. Obviously to be an "expert" one generally has to have engaged in something other than testifying as an one. Some might be semi-retired or retired professionals.

> Obviously to be an "expert" one generally has to have engaged in something other than testifying as an one.

I don't know, it seems to work for a great many consultants.

No court system is dragging 23 year old experts onto the stand to talk about "containerization"

True, but many pursuits are only financially advantageous for a small percent who 'make it' (startups and sports, for example). But take into account non-financial benefits too.

In startups we're pushed to solve challenges that no MBA or CS curriculum would ever have conjured, plus we have a chance at making a dent in the universe. In sports people make friends and get regular fitness. These aren't financially beneficial, but they may be enough to make the pursuit worthwhile.

But it's hard to find positives in a MLM Business. The participant is constantly stressed from short-term sales goals and has no spare time left for personal development.

Friends alienation too. There was a guy in our friends group that severed most of his relationships trying to sell Amway shit. Every time he initiated a conversation it was obvious where it will end

Similarly with ethics/activism driven NGOs (eg Greenpeace and the like), at least last time I was in touch with that part of the world.

There was a knowing extraction of youthful “enthusiasm to do good”. It became a common warning passed around much like “HR is not your friend” etc. “They will use your enthusiasm” was what I heard.

The only alteration in your formula necessary would be “struggling to live ‘ethically’“ for “struggling financially” and mutatis mutandis re empowerment/disrupting/changing the world.

Equity in startups is often some kind of joke, but at least they do give you your salary and health insurance as agreed.

Startup culture has a fake it til you make it problem.

In my journey as a 2x failed startup founder I meet many nice people, most of us were entranced by startup as performance theatre, occupying ourselves with every sort of entrepreneurial busy work except the harder work which would result in putting a product or service in front of customers, haunting an overpriced flexi-desk / office in incubator hell. And I met a few of the usual narcissists and sociopaths, scratching red in tooth and claw to become the Steve Jobs they knew themselves to be.

The only success I saw coming out of this system was an idea founded by some serious programming talent that had obvious shot at product market fit before they wrote a single line of code. Everyone else was just fooling themselves.

In this case I think using specific names and terms, tuned to a specific "market" helps trapped Girlbosses realize their situation. As the title says, OP is addressing a specific group. It's easier to think "yeah I'm not part of $group" if framed broadly as you are suggesting.

The two are sides of the same coin and both are founded in the need of capitalism to make people work more so more profits can be made and more surplus extracted.

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