Here is an amazingly cynical but extremely truthful presentation given by James Howard Kunstler regarding suburban development in America. This was given at the 2004 TED conference. Visit the TED web site for more interesting videos.
About 6 minutes into the video there is a mention of Boston and the dismal design of Government Center. While I’m mostly a fan of the architecture in the downtown area, I agree with Kunstler complaints regarding that particular public space.
I found this story on digg yesterday. It’s titled Blogging for Money – A Passive Income, and it’s written by Darren Rowse, a somewhat well know professional blogger. In short, Darren claims that blogs are not a great source of passive income.
I’d like to approach the topic from another angle. While I might not agree with Darren’s point entirely, it does bring to mind one of my personal gripes with the blogging community: bloggers are starting to talk and act like multi-level marketers. The mere mention of the phrase “passive income” should make you think of MLM. Personal blogs aside (which I liken more to journals and are not part of the problem), I will articulate the issue at hand.
What is Multi-Level Marketing?
What is multi-level marketing (MLM)? Think legal pyramid schemes. It’s the stuff you see advertised on late night infomercials as get rich quick schemes.
Essentially, a company that employs MLM is a company that sells products or services through multiple levels of intermediate marketers. A lot of effort is put into recruitment. You recruit Joe who recruits Sally, each of them signing up 10 or so customers. You get a percentage of every sale made under you in the tree.
Passive income is a popular selling point for MLM schemes. It’s also referred to as “residual income.” The thinking is that if I recruit just a few people, I’ll make a passive income off of all the future recruitment and sales that my recruits do.
What Harm Does MLM Do?
MLM recruitment in the US typically preys on innocent, gullible middle-Americans. They get lured in by grand stories of riches and the vast potential of such a business. They see potential for a passive stream of money flowing forever with just a little work today.
For a couple people in the scheme such visions may be true. However, the vast majority of these people end up trying to sell knock-off toothpaste to their grandmother, turning relationships with friends and family into business relationships.
Selling and recruiting friends and family is encouraged in MLM, and while it works and it certainly sells products, most people find it doesn’t make them nearly as much money as they thought it would. Usually they are just left with the dirty feeling that they just tried to hawk worthless vitamin pills to their elderly neighbor.
The debate for and against MLM and pyramid schemes has been going on as far as I can remember, and we could sit here all day arguing whether or not it is bad or good. Regardless, there is a lot of taboo surrounding MLM and that taboo is there for a reason. The bottom line is that many people have low or mixed opinions on MLM, and I don’t want to see bloggers slip into that world.
How are Bloggers Headed Down the MLM Path?
In MLM, there are the people who make the products, the middle-men who sell the products, and the customers who buy them. That’s all pretty normal, and that’s how economics works. The thing that makes MLM odd is that they encourage just about every customer to also become a middle-man. Imagine going to the grocery store and not only buying soap, but then going home and telling all of your friends to buy the same soap so you can reap a comission. It might not even be good soap, but you want that commission. That’s MLM, and that’s also the way bloggers are starting to act.
We’ve all noticed the symptoms. Suddenly every blog wants to sell you something. It seems that every blogger has dreams of passive income. What’s causing this?
Just like MLM, blogging has a low barrier to entry and a high availability of products and services for promotion, thanks to companies like Google and Amazon. It’s no surprise that bloggers are starting to think and promote like multi-level marketers.
Causes for Concern in the Immediate Future
Up until now, MLM has had a deep recruitment tree and blogging has been pretty flat. Bloggers go direct to the affiliate programs rather than being recruited by Joe who was recruited by Sally who was recruited by… you get the idea.
This is now changing, and that’s what scares me. Services are popping up that act as middle-men between the blogger and the affiliate program, effectively making for a deeper tree indicative of MLM. Take a service like Zoundry. They make it easier for you, the blogger, to tag your posts with product links. This is a great idea if you promote great products because you generally believe in them, but in the wrong hands it’s just more kludge on the Internet that I don’t want to click.
Pretty soon the MLMers are going to really catch on, and then blogging as we know it will turn into a cesspool we’ll call MLM 2.0. Selling knock-off toothpaste and worthless vitamin pills will become the norm. Innocent middle-Americans will get suckered into grand blogging schemes promising “passive income.” Such a thing isn’t all that hard to imagine. In the end, most people pulled into the scheme will be disappointed and blogging will be left culturally destitute. I’m sure there are already infomercials out there hawking this as a get-rich-quick scheme.
Call to Action
Blog because you have something original to say or offer. If you are going to sell a product, do it because you believe in the product, not because you want to make a quick buck selling diet pills. Don’t let the blogosphere turn into a massive pyramid scheme. Don’t fall prey to promises of riches. Trust me, if it’s money that you’re after, you’ll make a better living and gain more joy out of doing just about anything else.
Most of us knew this was coming, but here is a link to the official story.
With the buyout of Youtube by Google, many believe the opportunity in video sharing has come and gone. If you saw the amount shakeup at some of Youtube’s competitors (who barely even put a dent in Youtube’s user base), you might be even more inclined to believe that.
I saw this tutorial today on Digg about how to build a niche minisite and make money doing it. The idea is to take a niche target, find some good keywords, make a mini-site, and use the minisite to push affiliate products, ads, etc. This isn’t a new concept by any means, but the tutorial breaks it down into some helpful steps. While you probably won’t get rich doing this, it can provide a small residual income.
The tutorial comes in two parts, check them out:
This is pretty nifty. A list of the 100 greatest theorems ever.
A blog can be a useful tool for an online entrepreneur. When used wisely, blogs can build a sense of community around your Internet-based business. This will help you establish a brand and attract more customers. That said, you can find some tips on how to effectively build this blog community in 8 Steps to Growing Your Blog Community One Person At a Time.
While the article doesn’t reveal any earth-shattering tips (in fact, most of it is pretty obvious), it’s a good enough starting point for anyone who is completely fresh to the notion.
Business Intelligence Lowdown has posted an article titled Lessons from the Lemonade Stand: 101 Common Sense Management Tips. It’s a constructive read for improving your management style, not just of other people but of yourself, too.
Guy Kawasaki is starting his next book, and it seems like this time he is going to expand on the awesome power of Web 2.0 and the democratization of the Internet. Interestingly enough, he is offering the opportunity to contribute ideas for the book. He has created a wiki where you can go and add some thoughts. Who knows, maybe he’ll write about something you’ve been burning to read about. For details, check out this post on his blog.
For those of you who don’t know Guy is, I suggest you check him out and maybe pick up one of Guy Kawasaki’s books packed with entrepreneurial advice. He’s an excellent entrepreneur and venture capitalist who contributes a lot back to the community in terms of information, tips, and advice.
Anita Campbell gives us a concise breakdown of a report done by Six Disciplines (PDF) on the top five traits of successful small businesses. These traits were collected by surveying 314 businesses, each with between 10 and 100 employees. A graph is included to demonstrate the point.
Many of these “secrets” are fairly obvious – it’s a no brainer that a strong business needs traits such as strong leadership, quality talent, and a disciplined approach to their business. One that did catch me off guard, however, was “effective use of trusted relationships.” Read Anita’s summary or the report to see what that means.
Regardless of whether or not these traits are obvious, the Six Disciplines report provides some tips for increasing your performance in these areas. Perhaps some of these tips can help improve the way you do business.