Saturday, June 9, 2012

My First Piece on Something Relevant

OK, I'm not, for one moment, say that this business is illegal. By all means, it is highly legitimate, and recommendable for some.

The other night, I got an invite to a certain "business partnership" by a close friend. To be honest, I wasn't really interested since I'm already very swamped with what I do daily that I'm not interested in adding up some more. But since it was a close friend who asked, I respectfully agreed to meet her to talk about the "business proposal". Maybe, I thought, it would be nice to do something out of routine for that day. That day, 2 days after I got the invitation, we met up at a convenience store where, upon arrival, I was told we were going someplace else for the actual meeting for that "business proposal". I got a bit disoriented and before I knew it, I was in a packed seminar room with people apparently also invited for the "business partnership". To cut the story short, I listened to more than 2 hours' worth of enticing and irritating money talk. I'd say enticing since the speakers are blurting out money figures which a normal white-collared employee would only dream of having in this lifetime. Imagine being offered a "business opportunity" where you'd be receiving weekly checks amounting to what you could normally earn in a month, a year, 10 years, or a lifetime! Then again, it was irritating because, for every line the speaker delivers that ends with "money", "earning", "opportunity" or the like, someone in the crowd would shout "Grabe!" and then clap. And whenever, the speaker would ask a question, rhetorical or otherwise, or just post a challenge, someone among the crowd, in a high pitched voice, would continuously shout "Tama!". In my mind I was thinking what the hell was I in? It seems the crowd was riddled with prompters. Obviously, the goal was to convince the people that: 1.) the business is legitimate. 2.) the products are effective. 3.) the return of investment is fast. 4.) earnings are high. and 5.) this is easy money. So people are enticed to join this "business partnership" for a relatively small capital. This actually was a business club where, to join, people are asked to pay 12++ thousand pesos membership fee. In return for that 12k, one would receive products "worth more than what you pay" and some other incentives. This after all, was a networking business where, you would earn not just by selling the company's products but also by recruiting people to join the club. Now, to most of the people there, this offer would sound convincing, and if I didn't know any better, I would have paid on the spot. But I had some other thing on my mind.

I won't refute anything that the speakers said about the company. But then, what they were saying, what they were offering the people, was too good. Too good to be true And I think, in business, nothing too good is true. This took me back to a scam which was then being offered to us during high school. The offer was to "buy" a certificate worth not more than 10k and in return, you'd be earning a steady amount on a regular basis. Now, this, during those days was called  pyramid scam. People would shell out an amount, then they would recruit people who would shell out an amount too, etc, etc. This results to an exponential increase in the collected "initial money" which the ones on top reap. This is illegal. The good news is, people have learned to legalize this scheme and it's basically what we now call networking.

During the seminar, there were more than 60 attendees. Let's say 40 of those would join. Then let's say, of the 12k that the company was asking, 3k actually goes to the top executives. So, aside from the earnings the company gets from the products it sells, it also earns 3k easy money from the membership fee. Now, they do this kind of recruitment 6 days a week. Therefore, daily, the company earns 120k easy money per seminar branch. So, if the company has 10 branches, it earns 1.2M per day... easy money. Now, this is math I wouldn't mind doing every minute.

But here's the thing. Most of their recruits are employees. Employees who would soon resign from their jobs because they're already earning decent amounts from networking. And since this employees would also recruit their co-employees, who would also be doing the same, we would soon be left with a dwindling work force. So, as this company sucks up the workforce, it exponentially earns easy money at the new recruits' expense. I'd say there's nothing illegal with this business now, since in return, the company is giving something back to the recruits. But what if the system fails and the people you recruited stopped recruiting? What if, after a few years, the company shuts down?

For now, I guess, while the company is in good health, the figures that the speakers were offering those whom they feel they could convince, would stir them who currently have none to dream of the possibilities that come with joining the company. This is the guarantee similar to what the education plans, to the insurance companies, and to the like offer. In the future, they say, you would reap the investments you made in the form of monthly contributions, guaranteed! And then, the insurance companies shut down and stop giving out that guaranteed return of investment and nobody's yet to be held liable. Now it sounds good. But in the future, what happens?

This networking business is really a gold mine. But I think, somebody out there, has been searching for loopholes in the system. Sooner or later, that person would exploit that flaw. By that time, when the new company recruits have exponentially increased to the hundred thousands, and the flaws have been exploited, and the company suddenly shuts down, who's to blame?