Small business – Grokking with LodRose!

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One early evening the past week, myself and a few close friends who were former colleagues (NOT an oxymoron, while we were all really aggressive competitors during our time together, we became really good friends outside work) were graciously met by an outright “pera-pera” (money greedy) businessman who presented us with a business proposal.

Don’t worry N, we understand and forgive you – you may be married and a new father but still young, surely at some point pitches like this may slip and pass by your judgement.

This businessman that I’ll be referring to as J, didn’t even bother to hard sell the product that was supposedly the center of the universe of their business. We even asked him if the product managers allow this and not get offended. J says, not at all, so long as the money comes in.

The business model they’re pitching was the membership on their networking system, the price being several bags of the product and a few good marks, err, referrals with two steps:

Have the marks, err, referrals invest a nominal amount into the business
Extend membership on the network system by “inviting” a similar bunch of referrals on your group of friends to a business proposal meeting

The 4 of us attendees were already nodding, making knowing looks at each other, trying to be polite, asking relevant questions. I see potentially good poker partners there.

If we weren’t this ~~old~~ wise, we’d probably sign up right away.

Of course who doesn’t want tons and tons of money? We could definitely use some. Then again, we have enough to get by doing the things we’d love to do, and though you may believe we’re being hypocrites for the lack of willingness to subscribe to the kind of money mentality that you have, this is who we are. Also, it is no surprise that the earlier venture of the product owner folded. It did not happen simply because a person from public office intervened.

Umbrella/binary/pyramid/network marketing always has a bottom – it is not sustainable:

Networks get exhausted
Business does not cycle when there viable marks are no longer available
It has no real social value

Another significant and most overlooked aspect of this is tampering with the quality of personal relationship your investor has with their referrals. When you get into something like this, the trust factor gets compromised. Of your credibility and a question of your values as a person, since you are in effect endorsing the mindset of the businessman you introduce into the life of your friend/colleague/referral.

Again, J, I’m not being negative or spreading any bad vibes with how driven you and how much you believe your business will succeed as it is doing so now, as I can see from the fancy watches that you and that lady were wearing, and the huge amounts on the checks you showed us.

I won’t speak on behalf of P & R & T, but with absolute certainty, I do not fit the profile you are looking for.

I am financially struggling with my startups, and straightforward as you are with how you do your business, in that same manner I’m proud of where I am. My eventual end customers are uncomfortably lodged at the BOP (base of the pyramid) – we are lifting each other up.

Best of luck to both of us, and if you can funnel in that tons of money my way as patient capital – perhaps we will both end up where we want to go financially.

Other get-rich-quick schemes:

Social Media, Shams, & the Create Abundance Business Community – this group in particular caught my ire because they dare call themselves as Social Entrepreneurs!