Or has it?  They seem to be busier than ever and I’m sure the good karma has something to do with that.  In an effort to experiement with the model myself, and as a means of finally getting on the social media bandwagon, I’ve produced agweet.com as a personal sprint.  It allows you to update your twitter status by sending a text to an Irish mobile number.  This is something our neighbours in the UK have been able to do since the get go.

Doubtless Twitter will introduce and Irish text number eventually but until then there is a nice little opportunity to give away a little bit of value for free.  Thanks for Ciaran McCarthy for digging us out with a layout and a logo.  Also thanks to piehole for letting me get this going on company time.

On the train back to Dublin we got talking about her little outburst. Apparently she had attempted the same thing in several of the talks on the day and had succeeded in hi-jacking a good 15 minutes of fame in at least one. My traveling companions were disgusted with this blatant attempt to force a marketing message down the unwilling necks of the bizcamp attendees. I can see why she attended however. MLM schemes do offer a means for ordinary people to start a business of their own without any capital outlay. There are millionaires out there who have managed to achieve their own financial freedom by selling these products. I’ve never met an Irish MLM millionaire but I’ve met an American or two.

So what makes MLM so repulsive? This lady didn’t really do any big favours to her product or MLM in general. The audience hadn’t signed up to listen to her opportunity. That aside however, there seemed to be a general dislike of MLM schemes.

The theory is simple. Consumer products such as household cleaning items, vitamens, telephone services and broadband typically spend a good proportion of their budget on advertising. This normally means advertising through mass market channels such as TV, print and radio. A certain percentage of your eircom bill every month winds up in marketing budget which ends up on your TV screen.

MLM companies take this ‘above the line’ advertising spend and instead create a massive reseller network. Many MLM schemes deliberatly don’t offer their product through any other channel other than this network. So what is the problem? Well here are a few of the opinions that came up:

They would give a Jahova’s witness a bad name: These products are sold one-to-one by sitting down with a prospect and explaining the service and the business opportunity. This might take up to an hour or so. This is a fair chunk of time and while we might be able to put up with a 30 second toothpaste add in between the Saturday matinee, fourty minutes spent on one product is hardcore. Who would really spend that long making such a ’small’ decision. It seems inefficient.

They sell a ‘get rich quick’ scheme, not a product: There is always two products on offer in an MLM pitch. The first is whatever product or service it is (phone service, health drinks etc) and the second is the business opportunity. The opportunity is a way you can in turn sell on these products for a profit. For me this is probably what gives me a bad taste. If the product was that good – would you need to drop in a dream of eternal wealth to sweeten the deal? Of course it doesn’t mean that the products are not good (and many of them are great) – it just means our innate greed is going to be appealed to rather than a need or desire related to the product on offer.

They are a pyramid scheme: There is a perception that MLM companies are a massive scam, a little like franchise opportunities used to be seen as a scam until recently. What makes MLM different from a pyramid scheme is that there is a product or service being offered which could be considered to be reasonable value for the payment even if there was no business opportunity available.

Once you sell the product to your (ex)friends and family, the game is up: Once you sign up as an member of these schemes you are expected to offer it to all those people that you come across. There is a lot of potential of mucking up your social life. The last thing you need to do is end up as a billy-no-mates. Of course, this could kind of be said for anyone in business. My old man is a solicitor and besides a plaque outside his office, there isn’t much other than word of mouth that drives his business. He does a good job and because he does, word of mouth spreads and he comes into contact with new clients. I would imagine this is the same for a MLM affiliate. If I buy the product and it works well – I’m likely to recommend it. As an affiliate you have to treat your selling as any other business would, finding more leads to fill your pipeline.

Finally: The business opportunity looks easy: Rather than having to sign up customers yourself, the MLM model works on the assumption that if you sign up X number of people, then they sign Y number each etc – you will end up with a significant monthly cash flow. It sounds easy, ‘just’ sign up five and the system works itself out. MLM members will warn you that is isn’t as easy as it sounds but this simple proposition is very hard to ignore. Just get five people to buy and you will be rich! A friend of mine explained the reality to me in a more realistic fashion. She had met a MLM veteran who was now wealthy having sold MLM opportunities for 20 years. In that time he had sat down with 4,096 people . Of those 52 were interested in building a business from MLM. Of those 13 signed up. Of those, 8 stayed and 6 were now millionaires. I’ve no reason to disbelieve these figures, but I note that the MLM pitch never makes mention of having 4,096 meetings.

So what do I think about MLM? Well – I have to admit I admire the moxy of that girl who stood up at bizcamp. I’m not sure how effective it was for her. I can’t imagine she had many sign ups – but she did give it a go. And that is what any entrepreneur has to do.

A few months ago – I was at a meeting where someone stood up in front of about a hundred people and started to explain why they were investing in property. He was currently working for a large telecoms provider here in Dublin and was all too good at his job. He had a position with lots of responsability. He hated it. On the side he was investing so that he could ‘give up the day job’. So what? Well – what made this guy different was that he had something really worth while to do with his time when he did manage to get enough money coming in from his investments to fund his expenses. He wanted to build a hospital in Uganda.

He was asked when he was going to achieve this – and after some awkward questions – it finally emerged that he couldn’t leave the job – no matter how worthwhile the end game – merely because of the few grand a month he needed to pay the mortgage. It struck me as real waste. Here was a guy with what sounded like a fantastic drive and ambition – thwarted by something as mundane as a mortgage. So where is this going?

Cut to a few months later at the first mastermind group – where I had produced a ready reckoner showing the number of people you would need to have to have paying you monthly to meet your monthly financial commitments.

Along the left hand side is the monthly cash generated . Along the top is the number of ’subscribers’. You quickly see how many subscribers – paying what sub – are required to build what cashflow.

The striking thing is – to create a cashflow of 2.5k euro a month (0r 30k a year) – all you need is 50 people paying 50 euro a month. In other words – if this guy could get 50 people to donate 50 euro a month – for as long as it took – he could dedicate his time to building that hospital. It seems like a trivial amount. Of course – there is a lot more to it than that. Still and all – he could at least start raising funds etc to get it built -full time. Now consider all the worthwhile tasks in the world that don’t get done simply because there is a mortgage to pay. Kids who grow up not knowing their mothers, community play grounds that never get built – world hunger etc. There are thousands of people out there with worthwhile objectives for their lives who are trapped in a 9 to 5 .

There is another way however. Recently – while listening to Rails Envy – a computer nerd has offered up his time to work on open source community projects in return for 8k of funding. The guy will put aside his professional and personal work to work for the community of programmers that are involved in the Ruby programming language.

What a great idea. Why aren’t more people doing it?

So here is my pitch. I would like to build a website facilitating this type of activity. This is what it will do

• Allow people to post up their ‘pitch’. In other words – upload text and images explaining what it is they would like to do – how long it will take – how they plan to do it etc. This could be anything from cleaning an apartment complex to creating world peace.
• Supporters will be able to ’sign up’ and sponsor the mendicant for as long as the project lasts.
• Once the requisite number of supporters are signed up – payment will flow from the credit cards for the supporters. This will be handled by paypal, worldpay and other online money transfer systems. The website itself will not have any part in handling the money other than to allow supporters to manage their subscription (ie: stop payment, increase, decrease payment)
• The mendicant can then blog and email his/her supporters weekly/monthly/daily with progress on their project. If the supporters feel like they are getting value – the payments continue. If they don’t – they can end the sub.

So how can you help? Well – I will commit to building this website and promoting it. I am looking to prove the pudding by eating it. In other words – I am looking for a pledge from 50 people to pay 50 euro per month for three months until the site is finished. My vision is that hundreds or thousands of people can be given the opportunity to do something really worth while – supported by people who wish they could do the same but in the mean time would like to help out.

What can go wrong with this? Well – there may be all manner of legal issues to be tackled. I am pretty sure that I can get the site built easily enough – it is just a question of getting the marketing right. I have some experience with online marketing and better still – some great friends (you know who you are) who can help with this side of things. The major challenge would be to figure out how to get the word out. That is something you can help with be forwarding this mail to someone you think might be interested. Another way you could help is to pledge 50 bucks for 3 months in a comment on this blog post. If I get 50 people signing up – we’re up and running. That is 150 bucks in total. At the moment – you can’t manage the subscription etc and I will have to keep you up to date by regular old email. For this reason the donation is all upfront. This hopefully won’t be a problem once the site is built! If I don’t get enough people to buy in – I’ll just refund all the money. I’m sure there other T+C’s I should be thinking of. Leave a comment if you can think of anything useful.

Why don’t I just build it pro-bono? Largely because I want to see if this will work. As it happens – I can’t really afford the time with all manner of mortgage / rent and even tax man breathing down my neck. I do promise to work damn hard on it though – and not waste a penny.