Paul Nash “hopes” Spinding isn’t a Ponzi scheme
Ken Russo, a Spinding affiliate who markets the opportunity as a “passive revenue share with immense potential”, recently sent off some questions to owner Paul Nash about the business.
Whilst refreshingly honest in the sea of psuedo-compliance that plagues the MLM revenue-sharing niche, Nash’s reply was still somewhat (unintentionally?) revealing.
Russo doesn’t state when the questions were sent, but with Spinding only going into prelaunch recently, one would assume sometime in January.
Two questions were sent into Nash. The second was about reassigning recruited affiliates to existing downlines and was not all that relevant, it was Russo’s first question that caught my attention:
1. I’m not sure how to describe the way a passive member can benefit. Please provide a clearer explanation on this issue alone that I forward in a team update and post in the forums.
“Passive” of course being MLM code speak for “I just want to invest my funds and then make money doing nothing”.
Anyway, eager to clarify things, Here’s how Nash (right) answered:
Not sure that a totally passive system exists that will pass the legalities and scrutiny of the attorneys.
I am hoping that we have a small percentage of “active” members who actually try to build this thing…
That said, I have talked to a number of people who don’t want to actively recruit anymore. They are just going to buy three positions and call it a day. The first qualified by the other two. That’s it.
Doesn’t get more passive than that….lol.
“Lol” indeed.
For those not familiar with Spinding’s business model, the annotated Spinding compensation plan slide below explains the basics:
In a nutshell, affiliates invest between $30 to $960 (I’ve seen $1890 quoted), in five straight-line queues. When four subsequent paid investments are made after theirs, they earn a $1-$63 ROI.
The investment position is then sent to the back of the queue, with each position being able to generate a ROI up to ten times a day. For a more detailed analysis, see the BehindMLM Spinding review.
In order to qualify for a ROI in each queue invested in, affiliates must bring an additional two positions into each queue. This can either be via recruited affiliates who invest in positions, or additional investment by the initial affiliate themselves.
What Nash means when he tells Russo that he’s
talked to a number of people who don’t want to actively recruit anymore. They are just going to buy three positions and call it a day. The first qualified by the other two.
Is that these affiliates are going to qualify themselves for a daily ROI on their first investment position via self-purchase of two additional positions under it. The idea being that ROIs generated from the first qualified position are then used to buy additional positions, qualifying the second and third position.
In this manner a Spinding affiliate investor can “passively” increase their positions in the company, provided of course other investors continue to dump money into the scheme. This also traps investor money in the scheme for as long as possible, giving Nash plenty of initial funds to pay out early investors with.
It should be noted that the above investment positions are only one component of Spinding’s compensation plan, however it’s pretty much all anyone is marketing.
Last month Nash tried to raise $160,000 to fund a merchant customer platform, driven by merchants giving Spinding app users gifts.
Nash’s crowdsourcing campaign ended on January 16th and raised just $27.
Whether or not the merchant gift app component of Spinding will even go ahead at this point is unclear. What is clear however is that Nash is pegging his hopes on someone “building” Spinding at a later date, with those involved currently gorging themselves on the passive investment side of the business.
SEC, over to you.
Free lunch indeed. Uh, can you spell Ponzi? Faceplantintothewall. Bonk.
Hi Oz
This reminds me of the ‘chain-letter’ type deal going around the UK and started on the Isle of Wight a few years ago. Called ‘women empowering women’.
You had a meeting in your home – invited people to put £2400 in the deal – (it was a you – 2 – 4 – 8 people scheme) and when you rose to the no1 spot you went to the meeting (party) and received £24,000 in cash!. A powerful visual experience for the potential new (inexperienced) investors (victims)who were hopefully inspired to find 2 new investors (victims).
As per the norm, finding 2 people to do the same thing is hard for he best of people… Of course it relied on getting 2 others to do the same and for them to ‘duplicate’ etc down 4 levels.
You will be surprised I’m sure, that it attracted a lot of adverse publicity, the attention of the authorities AND the loss of money by the participants. It died a sudden death.
ROFLMAO! If a copy of that email and his response ends up in the hands of any regulator, (and it will), this deal and this guy are toast!
“Hoping to have a SMALL percentage of people who actually build it?” LOL! So, he’s basically launching a program where he knows that most people won’t! LOL!
He’s actually admits that it’s nothing more than a “buy positions and make money” illegal pyramid scheme, and that it’s not likely that a large number of people are actually going to build it! According to him, “I’ve talked to a number of people who don’t want to recruit-they’re just going to buy positions and call it a day.”
What? So, they’re not going to recruit…not going to sell anything…they’re just putting their money in and buying positions and making money as a result of that..Hey Paul, you just admitted that you’re running an illegal pyramid scheme! LMAO! Worse, you put it in writing! (Can someone say idiot?)
This is too funny! I think I see why his partners in a previous “money game” dumped him…
Interesting that a number of TelexFree International reps now appear to be signing up and promoting this deal…Let’s hope the regulators hit TelexFree International for being an illegal pyramid scheme and then tag this one next…
So it sounds like your pyramid assertion is based on a comment of passive income is somehow illegal ponzi. Sure, if everyone was being sold on recruiting two others who recruit two others, yes, that is a pyramid when a product or service is absent.
As I see it, the smart phone application is the initial product, and when you look at the millions of applications being sold for smart phones, sounds like a legitimate product and service to me. Of course, it has to work as promoted and be a benefit to the business merchants who will want to attract more business. Advertising is a legitimate product and service of value as I have seen over the years in business.
Of course, on the MLM side, the spillover fairy rarely is seen in any MLM which promotes such passive income, but on the other hand, in some extreme cases it is possible to fall into a position whereby a passive income is possible, just not like most promote it as being assured. Nothing is assured in any business.
As to comment made in email, or whatever, Nash said rather clearly, there he is not sure there is any totally passive system, but yet it could happen if a person happens to purchase qualifying positions under their primary and give away the applications to others. This has been done for years, but again, without a product or service of value, then it is illegal.
If the application proves that it is valuable to merchants, and they support it with offering freebies like McDonald’s does with their infamous Monopoly scratch off game, the the value is there and it is no longer possible to be proven as an illegal pyramid. Passive income is possible, but you have to make an initial effort and make a couple qualifying sales first. I have been getting passive income streams from several companies I no longer promote, nor have in years, so it is possible.
So far we have only seen the hype of spillover fairy which is what a straight line comp. system is designed to do, but rarely do. The same is true with cyclers, so without a product or service of value, it will never work long term which is why we have never seen any long term straight line or cyclers last for more than a year.
Time will tell, but I like the concept coming from a traditional business background and having used freebie incentives for years, this could work very well with the millenniums who bury their heads in smart phones texting away at record speed. lol
No, Nash’s comments only re-enforced what was already deducted via analysis of Spinding’s compensation plan.
False. Practically every Ponzi or pyramid scheme today masks itself with some sort of product or service.
Yes, this is how Ponzi scheme’s work. You invest in a position, recruit others who invest and then sit back and collect your ROI. This core mechanic of the Spinding compensation plan negates the legitimacy of the rest of the business model.
only how many people are convinced to invest and participate. The business model meanwhile will reveal instantly what sort of business Spinding is. And the initial analysis is that it’s a six-tiered cycler Ponzi scheme.
Subject to Spinding changing their compensation plan, this cannot change – irrespective of what else Nash attaches to it.
Hi Everyone: Here is a model you can never go wrong with.
Self Centered Vs Others Centered Marketing Model
Self Centered: Hype-No Real Product-Only The Company Wins at the expense of it’s Affiliates.
Others Centered: Company and it’s Product produces a Win for the Business, Win for The Consumer and a Win for The Affiliate
By the way for those of you that may-not know SpinDing is considered an Affiliate Marketing Opportunity-Totally legal World-Wide. Free App, Free to Join. Product purchases Affiliate Mobile-Marketing tools or Business-Advertising purchase, produces commissions on each and every sale.
The Ponzi model seemed to go spectacularly wrong for Nash’s last venture, Go Fun Rewards…
Nah, it’s an MLM opportunity. Business model trumps you.
Which world-wide body certified Spinding legal? The app hasn’t even launched yet and yeah, it is free to join.
One out of three ain’t bad.
Affiliates dump money into cycler positions and get paid when enough new positions have been purchased. This is BehindMLM, leave the psuedo-compliance garbage at the door.
@Oz….
Was he kidding or for real?
hmmmm these guys are stunning….amazing….and I’m not talking about the thongs they wear under their suits. : )
Sorry N_way I don’t want to make you blush in public. : )
Self-delusional, perhaps.
Just saw on the MMG forum that Paul Nash is starting a new ponzi called Spinqast
Oh dear god. Another “illegal cable tv for life” MLM opp?
Who is selling these things to the companies?!