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.
https://mobile.twitter.com/jherrerx/status/16123398697071083...
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.
Also, I think some of this is somewhat outdated: wages in China have risen, and the really low-quality and low-wage manufacturing has started to migrate to SE Asia.
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.
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.
MLM requires the mid tier to aggressively re-sell it down the line. Which is where the worst part comes from.
… otherwise it’s just sparkling scam? ;)
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.
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".
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.
Ans as long as the staff and founders and on payroll and not making terrible sacrifices, it’s just voluntary wealth transfer.
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).
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.
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).
Why not just say "Markets are efficient at transferring money from less powerful to more powerful people." then?
> 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-...
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 this 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 just thinking about 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 recommend "Contrepreneurs: The Mikkelsen Twins" by "Folding Ideas" https://www.youtube.com/watch?v=biYciU1uiUw
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".
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.
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.
I have not. Probably because they simply aren't a significant part of tech or startup culture.
Kids will also easily believe that is cryptocurrencies.
The beautiful cryptography is completely shadowed by speculation.
Care to point out where I made any universal claims about startup culture?
For the record, I agree with you.
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.
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.
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.
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.)
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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.
> 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."?
> 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.
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 tonight, in unrelated threads. https://news.ycombinator.com/item?id=34919705)
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.
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.
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.
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.
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.
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.
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.
I don't know, it seems to work for a great many consultants.
https://www.ftc.gov/sites/default/files/documents/public_com...
> 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.