In a down economy, there are no
shortage of people and companies coming out of the woodwork
to encourage us to create our own income-generating
opportunities who then bill us for all this encouragement.
Multi-level marketing (MLM) operations
have field days when
economic times are uncertain.
They play off peoples' doubts about their economic
futures in order to suck in a lot of new enrollees, nearly
all who are doomed to fail.
Now here's the million-dollar or perhaps just $1.25
most MLM people fail because the MLM deck was stacked
against them from the start or because they're just plain
Where's All The Moolah I Was Supposed To Make
I discussed the reasons I thought most MLMers fail in the MLM game.
I won't repeat what I've already written there.
Suffice it to say that a lot of people wind up
dropping out of their MLMs companies with bitter memories
and with lighter wallets and go out of their way to call the
entire MLM model a scam.
Experiment M, discussed below, proposes to come up
with a more exact answer why and how many people fail with
the model rather than rely on failure statistics anti-MLMers
pull out of their asses.
The other day I got e-mailed a letter
from South Africa.
Three names were on the list.
I was instructed to transfer R50 (US$4.90) to each
name, then add my name to the bottom of the list as I cycled
the other names up.
I was to subsequently contact at least 200 people by
e-mail and get them to do the same.
In a matter of weeks, I was told I'd see R3,200,000
(about $314,000) rolling in.
Do I believe this will work?
Not at all.
But that doesn't mean I think it's a scam.
people I contact follow the instructions and then get 35-40
people to follow the instructions who then get 35-40 people
to follow the instructions, I would earn R3,200,000 or more
. . . but that's a huge stack of ifs.
This letter from South Africa was
flawed for several reasons.
There were specific South African bank details for
each name on the list.
No one but a South African or South African
bankholder could easily transfer R50.
I also didn't really know the guy who sent it.
If he'd known me, he'd have realized I didn't live in
South Africa and couldn't participate.
The sender had no credibility with me, a major reason
not to act on it.
This got me thinking.
How many times have I received an e-mail urging me to
pass it on in X number of minutes or days or I'll receive bad luck?
We've all gotten letters like these and until
recently, I was passing a few of them on.
Enough people forward these letters or we wouldn't
keep getting them, and yet for what?
The promise that good luck will grace them if they
forward them and bad luck befall them if they don't?
Can such a lame reward/punishment package be the
reason this crap keeps flooding into our Inboxes?
In the last two years, I've gotten crap that Bill
Gates and Microsoft
will be paying $200 for each e-mail you forward
on asking other people to do the same.
At least on this second scheme, there's some
ludicrous promise of a payout, though none of the overly
eager participants bothers to question why Microsoft would
pay so much money for a task so easy, how Microsoft could
track the number of e-mails you send, and where Microsoft is
to send your "hard-earned" reimbursement when you never
supply them with payment details or a physical address.
The only reason any of these e-mails
ever got read by me in the first place and sometimes, though
rarely, forwarded is because someone I know sent them to me.
Had they been spammed into my Inbox, my spam filter
would have junked them automatically or I would have junked
Successful MLMers follow similar
recruit under them people they know.
Or at the very least, direct acquaintances of
people they know.
This is because credibility exists at the very
beginning of the contact.
People listen to proposals of people they know and
possibly follow their lead if this person is someone they
I decided to devise an
experiment, called Experiment M, that would target and pay
out like the MLM model, but unlike an MLM, not require any
significant investment or time or risk that would scare away
If the experiment winds up a success, with most
people making more money than they invested and with their
results being proportional to their measurable efforts, then
I can conclude that it's just the particular MLM companies
and the heavy buying demands they expect of their members
that condemn most MLMers to failure.
If the experiment turns out a failure, then the only
explanation is people's lack of interest or laziness.
We can't blame the failure on complicated business
models, high recruitment turnover, or any other reasons
critics typically cite to justify the typical MLMers crash
and burn rates.
Experiment M is designed to be as
simple as possible.
We take the same letter I received from South Africa,
but instead of listing complicated bank account transfer
details or requiring monetary notes be stuffed into
envelopes at the post office, we make things as easy as can
be by requiring that all money be transferred electronically
It used to be
free to transfer money with Paypal; with a personal account,
the Paypal recipient was charged nothing.
Times have changed and now Paypal takes a
transactional charge of several percent no matter what type
of account you've got.
Nonetheless, while it ain't like it used to be,
Paypal payments can be made across different currency zones
and allow for the instantaneous transfer of money vs.
reaching for a checkbook and having to send money through
the postal services.
And since most of us buy stuff on eBay, we're all
likely to have accounts.
If you lack a Paypal account and have no intention of
signing up to get a free one, you cannot participate in
Experiment M. Simple
Up front, we deal with people's fear of
investing a lot of money in a scam by not asking for much to
Total required: US$8.
Who among us can't afford to lose $8?
If you're among those who can't, you shouldn't be
wasting your time at
Doug's Republic reading about experiments.
You should be out there earning more money.
Since I, as the initiator of Experiment M, have no
one to pay US$8 to, I have donated US$13.60 of my own
hard-earned dough to a local school, so that I'm as vested
in this as any other participant.
Where did I arrive at $13.60?
$8 covers my initial inclusion at the #3 spot, just
as it does for every other participant.
I also had to place two other people in the #2 and #1
spots. These two
don't get to profit through all three positions, so their
cost to participate becomes less.
Spot #2 allows one to recoup $8 twice as fast as spot
#3, and spot #1 five times as fast as spot #3.
Therefore, their cost to participate lessens in
proportion to the quicker recoupment times, to $4 (= $8 ÷ 2)
for spot #2 and to $1.60 ($8 ÷ 5) for spot #1.
$8 + $4 + $1.60 totals $13.60.
If you agree to join us in Experiment
M, your first step, before doing anything else, is to login
to your Paypal account and send over the three paltry
amounts to all three names listed
For later tracking results and to spare any wrath from Paypal, send the money over as
a personal gift titled "M Gift" or "M Repayment" or some other moniker of your own devising.
If your account is
denominated in a currency other than U.S. dollars, you can
still send the amounts in U.S. dollars and they will be converted for the recipient.
Next, move the name and e-mail in the
#3 spot to the #2 spot, and the name and e-mail in the #2
spot to the #1 spot.
The name currently in the #1 spot should be removed
Place your own name/business and your Paypal e-mail address
in the #3 spot. The
payable amounts listed on each line should remain unchanged.
The #3 spot always gets paid US$1, the #2 spot US$2,
and the #1 spot US$5.
Last, copy or alter the message
here, with your
amended list at the end of it, into your e-mail client and
contact as many qualified people as you can. Take the time to translate the message if the recipients are not native English speakers since they will be forwarding the message on, most likely,
to other non-English speakers.
Do not spam anyone!
This is not an empty disclaimer meant to cover my own
is a waste of time for this experiment.
It won't work.
Following the MLM recruitment procedure, you should
only contact people you know on some level in order to have
credibility established from the onset.
Your contacts should
receive the e-mail and at least recognize your name or you
can kiss off any chance of them participating.
If the person
receiving your mail doesn't know you all that well, I'd
suggest adding a short introduction at the very beginning of
the post explaining how you know them.
This is Peter McKinnick.
I contacted you about six months ago to see if you
were interested in buying that prime ocean front real estate
Don't worry. I'm
not following up about that.
This correspondence deals with something else
entirely I think you'll have fun with."
Then, copy the rest of this post along with your
updated Paypal list of beneficiaries.
Ideally, each of the e-mails you send
out should be mailed one at a time and personally
addressed (i.e. "Dear Bob").
If any of your contacts sees himself cc'd with 99
other names in a group e-mail, your mail won't get read or
acted upon. Try
to imagine the more respectful way you'd treat the e-mail if
you received it addressed only to you or cc'd with half of
greater New York.
The subject of the e-mail should, preferably, be
something personalized like "Frank, check out this
experiment . . . from Peter McKinnick."
If there are the two characters FW: before
your subject title, meaning you're just forwarding on
the e-mail, you've significantly lessened the chances of
anyone looking at it, let alone acting on it.
Just think about all the junk e-mails you delete
without opening them first.
You do so because the subjects are irrelevant and the
sender has no relationship with you or the sender has
contacted you with so little enthusiasm and conviction.
For this reason, I would advise you not to invite people via your Facebook wall. Lots of us have multiple "friends" we have very weak ties with. These friends might enjoy finding out if your kid just won first prize in a school competition or what feast you cooked up that evening, but you lack the necessary credibility to motivate them to action. Would you join an MLM a similar "friend" told you (and hundreds of others) about mindlessly on his Facebook wall? I think you know the answer, so why would you do the same? You're trying to MAXIMIZE your chances to succeed. Only contact people you genuinely know and make that contact thoughtfully and respectfully.
Do not try mailing out letters first in order to
earn the US$8 to then pay your way in.
In micro-economics, this is called the free rider
problem, and if everyone thinking to participate refuses to
put in $8 because they think no one else will, the
experiment will fail before you've started.
They'll be a lot of
Experiment M e-mails floating around with no one actually
getting paid, and we'll only be verifying what everyone
already knows: you don't get paid for not doing any
on, folks! It's
only US$8 we're talking about, less than a cocktail in a
cheat your position on the list.
It might be tempting to try to sneak yourself into
the #2 spot right away since the #2 spot gets paid double
the initial #3 spot.
You'll actually wind up making less.
The power to make money with Experiment M or any
MLM comes from cycling fully through each of the levels.
You can do the math to prove this to yourself.
If you're mathematically incompetent, then just trust
me on this point and enroll in a remedial math class.
You can only participate once.
A lot of us have the same names in our contact
list as our friends do, so there's a chance you might be
contacted to participate even though you're already on the
list. Delete any
future e-mails you receive if you're already participating
or have participated.
How much money will you make?
Logically, it should be a piece of cake for
anyone to recoup their initial $8 investment.
All of us know 8 people who'd be willing to gift us a
dollar, and I'm equally sure each of us knows 8 people we'd
be willing to give one.
But realistically, I'm of the opinion most
people will be too busy sitting on their chubby butts to
make back even $1.
I'm already convinced my $13.60 has faded forever
into the sunset, but I'd love to be proven wrong.
I dearly want to be shown that MLM failure is due to
the MLM companies themselves and not the people
The payout works exponentially so that by the time you reach
the #1 spot -- that's if you reach it, mate -- you'll
be paid out $5 multiplied by everyone in your downline.
That's why manipulating your position on the list is
a ticket to failure.
You'll just be shrinking the potential size of your
reference, if everyone participating makes it a goal to
quickly recoup their $8 investment by getting 8 of their
personal contacts to send them $1 apiece, at the end of it
all, you'd earn about $2,600.
It's mathematically possible to make a helluva lot
more as well as a helluva lot less.
As I'm already forecasting most people are practiced
ass sitters, a helluva lot less than $2,600 -- for example,
$0 -- is the more probable scenario.
Please make a note how many e-mails you
send out and the date you sent them out.
We need this information to be able to effectively
measure effort vs success.
Log your results, even if they wind up as nil, at
this location so that the
rest of us can be a witness to your success or failure.
My heart beats with anticipation.
Now for the real disclaimer.
This is neither a Ponzi scheme or an MLM operation.
It most closely resembles an old style chain letter, but with important differences to bring it into line with an MLM.
1) You have some kind of financial incentive to forward on the 'opportunity' 2) You can measure your results very quickly
3) You are only presenting this 'opportunity' to people you have some kind of credibility with.
Look at this like a controlled experiment meant to test a
particular business model in an entertaining way.
Every step of this experiment was designed to make it
as effortless and as simple as possible for fear that
potential participants will shun it if more than the slightest work
My personal experience with Experiment M is