It’s a sunny Saturday morning. I’m shopping at a grocery store. A guy comes to me, introduces himself, and says, ``he is new to the town''. Since he is a fellow Indian, I keep the conversation going. Questions about education, job, native place etc. follow. After a while, I attempt to leave. At this moment, the guy asks me about my plans for the evening. I become a bit cautious and excuse myself saying that I am super busy with research work. As a courtesy, I just tell him that if he visits university campus sometime, I can show him around. The guy takes my number and leaves. So far so good!
I come back home and in keeping up with my super busy schedule, resume watching a TV series on my laptop. At about 2pm, my reliably silent cell-phone decides to interrupt me. It’s that guy! He says that a friend of his has come over from Washington DC to meet him and they want to see the university campus before the friend leaves the same night. I pause for a while to re-work my super busy schedule and tell him that they can come over in the evening. The guys do show up on time. What unfolds next takes me back to some unpleasant memories of my past. A feeling of déjà vu!
Let’s roll back a few years. It was the year 2006, my second year of engineering. I was lodged in a big hostel of my college. During those days, there was a huge buzz in the hostel of a new business scheme, proposed by a company going by name `****.com’. Everyone seemed to be talking about the business idea. Soon enough, I was also pushed into it. The company had a motto of `Earn and Learn!’. You had to invest once to become a member of the company and you would keep earning for the rest of your life. Your earnings would get multiplied each time you convinced someone else to join. Additionally, you would receive study materials teaching you programming languages and such stuff. The company was clearly targeting students like me. I don’t remember who introduced me to this scheme, but he managed to win me over. I ended up investing Rs.6500. (To put the amount into perspective—(1) It is five times the monthly income of your family if the government recognizes you as a `below poverty line’ person, (2) It is also ten times the annual hostel fees I was paying at that time.) I don’t know why I invested, because I had no intention of selling the idea to others. Naturally, I did not earn even a single penny. What I do remember getting is a CD full of MS Word docs, apparently some study material, which I never used. Though the plan didn't work for me, a lot of my friends were earning their paychecks regularly and were very excited about it. One day, a bunch of 5-6 friends purchased brand new motorbikes with their `hard-earned' money. What a jubilation they had that day! They made several laps riding their new bikes around our hostel building with huge roars of `****.com ki jai ho!’ The same day, our college cricket team had returned home after winning a prestigious inter-university cricket tournament. But their celebrations that day paled in comparison to our ****.com heroes'.
Slowly the buzz around ****.com faded. We started hearing less and less about it. ****.com had stopped its operation, but nobody involved was ready to speak about it openly. Some of my more optimistic friends were happy with the fact that they had gotten a very useful marketing experience out of it and they were ready to dive into B-schools as soon as they finished with their engineering. Little did they know that your school grades matter a great deal in getting admits to top notch B-schools which they had jeopardized big time by devoting all their time to the ****.com business. Very few ended up in B-schools ultimately.
Fast forward to present. Last Saturday, two guys came to visit me. I had met one of the guys for the first time only a few hours ago and the other was a complete stranger. He introduced himself as a software engineer and a small time businessman from Washington DC. I was supposed to show them around the university campus, but they told me that they had already driven through the campus on the way and that there was no need to go back again. The guy from DC suggested us to go to a café. At this moment, I was alarmed. Since the guy had introduced as a software engineer and businessman, I speculated, he could be a freelance programmer trying to hire people. If he was going to offer me a job, I could at least promise him to spread the word across my friends. Thinking this, I sat in his car. He fed in Starbucks to his GPS and we started. The guy was asking me many questions during the ride. I was giving convenient answers making sure no eyebrows were raised. After a while though, I really got irritated. That was when he asked me how I spent my spare time for the third time. I gave him a long answer that explained how constant deadlines always kept me busy and how my advisor kept me on my toes all the time. (Of course I had made that up.) By the time I was done crying, we had reached our destination.
We were now at a Starbucks. The guy from DC sat in front of me and the other guy sat by my side. I was totally in their grip. Sure enough, the guy in front unleashed his weapon. He started by saying that he was looking to put together a team for his company and asked me if he could explain his business plan to me. Without waiting for my response, the guy started scribbling his plan on a paper. He asked me whether I would be happy to earn $1000-2000 per month apart from what I was earning at the university. I suggested him to first explain his plan before expecting an answer from me. Then the guy wrote down the magical word, `*****.com’. He told me they were into e-commerce. He drew a few pictures to explain me their e-commerce. (I have tried to reproduce them below.) Basically, you are expected to buy stuff from their website at `discounted' rates and promote it. If you bring in a new customer, you are paid $X by the company for every $Y worth of stuff the new customer buys. Your earnings get multiplied as more and more people join your network. Each person joining the network is called an Independent Business Owner (IBO) -- a fancy name for `customer’ in my opinion, although the guy explaining me insisted that it meant something bigger than an `employee’. The guy showed me a video of the company on youtube that demonstrated how great the company was and how even the biggest of the celebrities endorsed them.
Let's call the guy sitting in front of me Sr. IBO and the other guy Jr. IBO. Our conversation went something like this:
Sr. IBO : ``You can buy a house, buy a car, travel to places without having to work extra for it by joining us.''
Jr. IBO : ``True that!''
Fish : ``Awesome!''
Sr. IBO : ``Investment with us is totally risk free. You can buy beauty products, food and lot more at discounted rates all your life. Plus you'll get CDs and books teaching you how to expand the business for absolutely free.''
Jr. IBO : ``True that!''
Fish : ``Brilliant!''
Sr. IBO : ``I can show you a lot of examples of people who are enjoying a successful life thanks to *****.com. A scientist in NASA who has 18 patents to his name is a proud IBO.''
Jr. IBO : ``True that!''
Fish : ``Excellent!''
.
.
.
I raised a concern that I could not convince people as I lacked the necessary networking or marketing skills. The guy, of course was expecting the question. He unfurled a concept of tap-rooting whereby other IBOs would take care of outliers like me . After a few more exchanges, the guy pulled out a form and asked me to fill it up. I had to do something quickly. I switched a gear here. I told them that I would take some time to think over it. They suggested that it was time to act and if I delayed the decision, I would lose some precious money. Upon which I told them that I wanted to read online reviews before joining. The guy explained that I would get biased by negative reviews out there and therefore it wasn't a good idea. I kept on promising that I would contact them back. Sr. IBO got frustrated after a while. In a sad tone, he told me that in his experience, people who didn't join in their first meeting had never come back again. I didn't say anything. We all got up and went back to the car. I was relieved by the fact that I was getting a ride back home. The guys were nice after all!
Once in the car, Jr. IBO calls someone. He tells the guy that he and a friend of his would like to visit him. He gets an affirmative reply. They drop me off at my apartment and zoom toward their next fish. Life goes on.
Addendum:
While I do feel that certain Ponzi schemes make a sound business sense, I have a few critical objections against them. Whenever it comes to easy money, I become a bit apprehensive. Money doesn't come alone, it brings in new worries. It's never easy to come out of the loop once you get in. The guys who visited me are a case in point. The other major concern I have is -- you jeopardize your relationships as you start marketing these schemes. If I want to get more people on board for instance, I will naturally start with my best friends. I will have to make them invest for my selfish reasons. It's a high risk game, mind you. If they deny, you might lose them for life. But these are just my views, you might have a different perspective on all this. I would definitely like to hear your views.
Disclosure:
The author has no intention of hurting anyone's sentiments. In fact, the author secretly envies all the successful IBOs out there. :-P
