Friday, December 11, 2009

The Tangle of Network Marketing

A week ago, a lady named Ms. M who had met my wife at the Bangalore Book Festival recently, and had got her number there, visited us at our home. This was because she had been eversince calling my wife repeatedly asking for an appointment, and Shilpi had to give in.

Ms. M is a lady in her early 40s, of Sindhi origin, with an immaculate English and a pleasant getup as us. And she was there to tell us about a wonderful new thing called Educational Technology that had a potential of turning our 10 month old son into a 13 years...with a payment of about Rs. 135,000, made over a period of some years through EMIs. She had stories about there being 1000 trillion or so nerve connections in Vigyan's brain. Those would drop to 500 trillion by the time he is 8 year old. We were supposed to interpret it as the death of half his brain. Next, we were supposed to make haste to pound as much learning as possible before this calamity happened. That was possible only by buying Educational Technologies which is a result of 15 years of research. We were supposed to make special haste in deciding that we would make haste. In fact, we had just a few hours' time (till the next morning) to avail some out-of-the-world concessions on their products. In short, we were being asked to commit more than a lakh rupees within a few hours on a technology which claims to be a revolution in child development.

During our discussion Ms. M showed perfect confidence that we all have studied only by cramming and not understanding, that my being in IT was an accident which should have been avoided at all costs. Blunders upon blunder she made during those 2 hours of our interaction. She had some interesting things to say. But unfortunately, the zest and faith she exuded appeared rather fake. Her knowledge of the great things about Educational Technology was ridden with those same holes she claimed Educational Technology wouldn't let come in my child's development.

Towards the latter part of the discussion, Ms. M offered Shilpi if she would be interested in joining her in expanding the network of Educational Technology. That revealed the fact that all this was network marketing happening.

I have nothing to say about the authenticity of the claims made by Educational Technology, or about the products sold by companies using network marketing. All I have to say is about the fake confidence of the marketeers selling miraculous products like educational kits, toiletries, coin collections and what not, on the effectiveness of the economic model of network marketing.

A short tutorial ridiculing the inefficiency of the current economic model of the world, and how network marketing has the power to completely change that is the first step in the induction of a large number of people into the tangle of network marketing. What lacks in their induction is the sincere rigour that ought be there in anything that claims to be radical enough to change the world.

The economic world is like this not for no reason. Its inefficiencies are a cost for the credibility that people must earn before they sell a product. If it had been practical for every person on the street with a good idea to sell -- whether original or borrowed -- it would have been useless to pay people like Aishwarya Rai and Abhishek Bacchan amounts like Rs. 25 crores for featuring in stupid advertisements of toilet products. It wouldn't have been necessary to build institutes like MIT and Stanford when all knowledge is available at dirt cheap rates. It wouldn't have been required to look at the publisher's and author's name before we read a book, when there's so much text available on the web that we could spend our lives in reading that. The act of doing something is not always just about having the wherewithalls to do it; it's also about earning the credibility to sell something.

I feel that's the greatest flaw in the model of network marketing. It undermines the inherent cost associated with brand-building. The idea of listening to pep-talks from half-wits who parrot memorised speeches about the wonders that network marketing can do to a person's wealth just doesn't scale. When everyone's willing to give a pep-talk, we have to have a way of telling who should be heard. The process of filtration of that noise is the process of brand-building. That's where all the inefficiency of the traditional economy comes from.

I have close relatives and friends falling into the trap of network marketing. Before they did fall, they used to be good happy people with something better to do with their lives than running behind the lure of easy money. Network marketing has an amazing ability to convince people that money is the central goal of all serious activities, and hence it makes sense to get into an unending cycle of selling-buying-earning. Some of those dear ones got disillusioned rather early; some late; and some continue to struggle. Only a very small minority of network marketers have earned themselves that credibility that made them rich. That small ration is surprisingly close to the ratio of success in the traditional economy ridiculing which usually is the opening statement of a network marketing speech!

Please be careful!

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