It probably looks like I have
a fascination with multi-level marketing.
I wrote an article about it.
I devised an experiment to test it.
And now I'm writing a third piece to discuss the masterful
insights I gleaned from performing the experiment. My
conclusions remain unchanged, especially in
light of the results of my own spin at Experiment M.
I know now that I would never ever join another MLM
to spread the "opportunity."
Experiment M resembled a classic chain letter on the
surface. One of
my respondents pointed this out and asked me to prove it
wasn't. The form
of Experiment M, the form of any MLM for that matter,
resembles a chain letter.
You craft a message which you pass on to X number of
recipients and convince them to do the same.
This spreads the reach of the message geometrically.
The message can be benign:
"Forward this note of happiness on to ten people
within 24 hours or you will be cursed with bad luck for 3
years." Or it
can involve a sales spiel:
"Join up with our incredible organization for $50
annually and spread the message to all who could benefit
from our products and services."
What's thought of as a chain letter
contains emotionally manipulative stories – the promise of
bad luck if you don't pass it on is one such example – and
often the promise of getting rich quick.
Chain letters asking for money and dangling
the pocket of a huge return are illegal in the United States
and Canada, though I doubt anyone would actually enforce
this statute most of the time.
Experiment M wasn't a classic chain letter or illegal
by these measures.
There was no emotional heartstring pulling or the
pressing of people's buttons to get them to act out of
intentionally talked down the likelihood of a huge
payout, predicting ahead of time that most people are
I outlined the math and what someone could
potentially make, but warned that this outcome was
probably not achievable given most people's behavior.
Each person who participates in
Experiment M invests US$8.
Everyone's mission is to find 8 people who can pay
them $1, thus recouping their investment immediately, and
then get these same new enrollees to advance $2 and $5 to
the recruiter's "upline."
The $2 and $5 are the most important part of the
equation, as I will discuss a bit later.
I knew if I contacted just 8 people, it
was not likely all 8 would participate.
So I contacted 24.
I chose the potential recipients with care.
I excluded family members for a few reasons.
I felt there was too much overlap in our respective
People already recruited would be re-emailed by other family
members freshly recruited.
There'd potentially be too many Experiment M e-mails
floating around out of familial obligation to me, and I
considered there might be an unspoken backlash against me
for "trying to get rich on the quick."
I also didn't think the particular family members I'd
send the e-mail to would be very good at recruiting 8
Instead, I e-mailed several good
friends who I didn't think would judge me one way or the
other. And some
casual contacts with vastly different networks than my own.
This would better insure the Experiment M e-mails
were spread to the four corners of the globe.
Three of the recipients were not native English
didn't think they'd participate due to the extra work
have to translate my letters into their native languages in
order to pass them on, and it probably wouldn't be worth
I had my own feelings about whether
certain people would perform, but unless I was 99% sure
they'd be offended or not do it, I sent an e-mail anyway
just to get back a response.
About ten on the list were people I hadn't seen in
over 7 years. I
used the letter as a catch up e-mail and used the first few
paragraphs to mention some specific updates about myself and
what I was up to.
I segued into Experiment M in the third paragraph.
Every e-mail was personalized.
I took pains to close the e-mail with a low pressure
pitch: "Humor me
here. I want to add
a chapter to my book to document results.
Technically, Experiment M should be a success for
everyone who participates because the investment is low and
only personal contacts are solicited.
If you don' t participate, I'll likely contact you in
another week to follow up and ask why, but I won't judge you
for it or beg you on hands and knees to reconsider.
I'll just include your input in the follow up chapter
to explain people's general motivations for not taking part.
E-mail me if you have any questions."
Fearful that my e-mail would be ignored
if it were too lengthy, I kept it to under the equivalent of
one page of text.
The details of Experiment M itself were included in a
link. I did this
on purpose, so I could track how many of the recipients
actually took the time to read over the experiment.
The results were astounding – and not
in a good way.
Of the twenty-four people I sent the e-mail, none
Four visited the link.
And five responded.
The four link visitors were not fully among the five
visited who did not respond, and two responded who did not
bigger offense, in my opinion, was the nineteen who didn't
even bother to send me a brief reply and offer a platitude
why they wouldn't bother participating.
I think I was owed that small courtesy.
Two people whom I consider very good
friends wrote back friendly responses.
A childhood buddy replied," I don't think I will be
participating in the experiment. I just don't have the time
or energy to ask my friends/contacts even for a buck.
If you want, I'll be happy to donate $8 to the cause,
but that would be the end of it."
A college buddy offered, "I don't feel comfortable
asking my friends for money in this fashion. To be
honest, it makes me look a little foolish. One
other reason I'm not interested is because it's about trying
to get rich quick.
Let me be clear though, that I don't think any less
of you for trying it."
A very interesting response came from a friend in
India: "I can invest $8, but would not
use my credibility to get 8 friends. Probably if the
investment were higher, I might have used my credibility,
but in that case I would have never invested."
The college friend added that
he thought my experiment wouldn't give me an insight into
kind of like telling someone they are getting a placebo but
you want to see if it has any effect on them anyway."
I don't agree with him here.
A placebo has no effective medicinal component, so it
resembles, in no way, the medicine being tested.
Experiment M's recruitment and payout worked very
similarly to existent MLM operations.
But this is a moot point.
This friend stated he had no interest in MLM's.
The common thread among the few replies
is that no one felt comfortable asking people they knew for
money, if only for a buck.
I would say this is not a completely truthful answer.
People generally have no problem asking immediate
friends or family for cash if it involves some kind of
charity or good cause sale.
They would have little problem, I imagine, asking $8
for something truly valued at $4 if they could tell the
purchaser that the money was going to help fund their
child's school's new gymnasium.
The seller is then not benefiting directly off the
buyer while the buyer hopefully derives some benefit, but
possibly none, from the product purchased at an inflated
I kind of understood people's
hesitation to hit up their network because I had dithered
for 2 months before I finally sent out my Experiment M
queries. I told
myself I couldn't act like everyone else if I wanted results
different from everyone else.
What was the worst thing that could happen?
I felt a sense of relief after sending out the
e-mails, knowing I'd overcome that resistance.
The crazy thing here is that, unlike a
real MLM with its huge buying demands, joining fees, and
possibly average conventional products, all Experiment M
involved was asking 8 friends to give you $1 and pass $2 and
$5 on to others, with the certainty, if everyone
recruited 8, that you'd have a downline of over 300
people by the time your name ascended to the top spot to
collect $5 from all.
One hour's work to make over $2,000, hardly a
millionaire's payout but a lot better than most people's
One friend, recall, offered me the full
$8. I could have easily forwarded on the $2 and $5 to my
upline per the experiment.
His offer, while appreciated, would not have
satisfied the experiment's full terms.
Because Experiment M involves TWO bits
The first is using your credibility to convince 8
people you know to invest $8.
I think nearly all of us could successfully extract
$8 from 8 people and manually redistribute $7 of that to our
that's only less than half the job.
The second bit of salesmanship, the clincher in
Experiment M's success, is convincing these 8 people who've
they'd see it as donated – to repeat your actions and do the
If this were a real MLM with a real
"opportunity," I would lend my support to the 8 in my
downlline by sitting in with them as they recruited their
own 8 members. I
would help them utilize their own networks to build their
own downlines because all of us are enriched.
Experiment M offered an opportunity as well.
Without a reward (or punishment), why would anyone be
motivated to act? Experiment
M's opportunity was that one could multiply his investment
by over 250 times.
This is not the sort of thing that should require a
hard sell and upline support.
In fact, with more people in the room encouraging a
potential recruit to participate, potential recruits would
start to feel like it was a scam.
I comprehended from just the few
respondents and the bulk of non replies that the reason most
people fail at MLM's isn't because the products are
overpriced (though they are) or that the buying demands are
too crippling (though they often are).
It's because most people are too afraid or too
proud to ask other people for money!
I should clarify.
The childhood friend of mine who offered to donate
the full $8 makes a very good living as a salesman so,
clearly, he is not afraid to ask people to hand over much
But he asks people to hand over money in exchange for a
product with some determinable market value.
He generates leads by
attending trade shows and mailing out query letters.
Anyone willing to cut a deal with him responds to his
inquiries or asks him questions at his trade booth.
There is nothing for him to be afraid of because the
serious customers come to him.
My friend just needs to devise a proposal that meets
their demands to get them to hand over the money.
No one magically comes to you to be
part of your downline.
You have to be aggressive and ask for the cash, and
few, even if they won't admit it, have the tolerance or
skill to do it.
They would rather not turn $8 into over $2,000 with a whole
host of excuses why:
not enough time, don't want to risk the friendship,
would look foolish, fill in your own.
MLM's have a bad rap, no doubt, which I
am sure tainted my queries negatively, but the real deal
killer is people's behavioral patterns.
If more people than not had no issue with asking
their friends for small sums of money, then how could anyone
In my initial query to all twenty-four,
I announced I would follow up within a week.
I decided to end the experiment without a follow up
considering that 19 out of the 24 didn't even bother to
acknowledge my original e-mail.
A follow up would
look desperate and, though it might get some to offer me an
$8 "donation", it wouldn't be enough to persuade them to
establish their own downlines, the far more important
component of Experiment M.
I concluded it was better to quit while I was ahead.
You need strongly motivated people with
solid sales skills to ever have any hopes of succeeding at
MLM. To recruit
such people, you need to be one yourself.
But if you really do possess the skills to succeed at an
MLM, do yourself a favor and use those skills to succeed