Strizheus: Problems for Empower Network in South Dakota?
Big Idea Mastermind is the marketing system developed for and used by Vick Strizheus’ Empower Network downline.
Launched in 2012, today Big Idea Mastermind (BIM), is “the number one team in Empower Network”.
After a week of emails announcing what was touted as “the most important webinar that” Strizheus has “ever hosted”, things kicked off last night with a brief refresher on Big Idea Mastermind’s history, and then things began to get interesting.
[15:06] This is not 100% official yet… and I know some people are gunna get pissed, some people are gunna be like “what’s going on?”, some people are gunna go gossip… there is a good chance that I might need to exit (the) network marketing industry.
Vick Strizheus is quitting MLM.
[16:40] I really hate this but I live in a state, and we’ve been kind of going back and forth on this kind of stuff ever since 2010, really. Basically there are a few states in the United States, and South Dakota being one of them, where if you’re going to promote something that they consider to be a “business opportunity”, they make you… give your potential prospect a, what’s called a prospectus sheet.
[17:24] (It) basically outlines here is the compensation plan, here’s how everything is gunna work. Y’know the prospect has to sit on it for like three days, sleep on it, pray on it, whatever, ask their dog about it y’know, ask their wife about it, see if that’s something they want to do.
And then if they still want to do it, then they come back to you and sign an agreement and then you can pursue them and enrol them into the business…
[17:46] Although Empower Network technically is not classified to be a business opportunity, they still are not liking it.
Strizheus doesn’t clarify who “they” are, however given the statement was made while he was talking about regulatory rules in South Dakota, there’s a strong implication that it is the state that has a problem with Empower Network.
If Empower Network is facing regulatory issues in South Dakota or elsewhere, they have certainly yet to go public with it.
Meanwhile for reasons not immediately clear, it appears letting a prospective affiliate think on joining Empower Network for even three days is unacceptable to Strizheus.
[26:13] Giving people a prospectus for three days, and then them deciding if they still wanna do it or not… y’know, it’s just not how I wanna do this right?
[17:59] and so I’m kinda forced to either move out and, although the business is not in the state, but physical presence, or just kind of forced to exit and just do something different.
Moving away is not an option, I just have way to much stuff here. We got the family here, we got the house and everything here. We’re going between South Dakota and Miami a lot and my business is in a different state, but… here’s what I’m thinking.
[19:59] The reason that we’ve been slowing down and I haven’t been involved with Big Idea Mastermind as I used to in the beginning, is because there was a lot of stuff going on in the background.
[20:52] As of right now, today, I will not promote a network marketing company, any network marketing company – just because I don’t think it’s worth (it) for me. I’m not gunna do anything that’s a grey area. It’s either black or white.
I imagine the “grey area” Strizheus is referring to is Empower Network’s perpetual pass-up business model, which sees affiliates funnel payments up to the company to corporate at the top. The more affiliates recruit, the higher the payout from downlines.
The company counts affiliates who haven’t recruited as retail customers, but true retail within Empower Network is estimated to be virtually non-existent (the company has never revealed true retail revenue figures).
Here things take a detour, with Strizheus taking his time to hit up viewers with his post-Empower Network plans. The premise Strizheus uses to finally introduce his new business opportunity is “what if something happened to Empower Network (again, more hinting at upcoming or existing regulatory action):
[24:51] What if, god forbid, something happened to Empower Network? What if, god forbid, some kind of agency decided to investigate it?
Not because they did something wrong, not because the company is illegit or anything, but just because a regulatory agency decided “Hey, we wanna investigate you”, right? What if, god forbid, when that happens to Empower, because they are growing like crazy okay?
We don’t want our income to depend on one particular system.
Strizheus then goes on to explain a business model that supposedly combines “cost per acquisition” (CPA), affiliate, network and internet marketing, with “offline business”.
Strizheus claims that 90%+ of people who join MLM companies “like Amway, like Herbalife, like Empower Network” is “because of the (business) opportunity”, not the product. Strizheus states that this is a “problem”, mainly due to “competition”.
Reading between the lines, I believe the problem Strizheus is identifying is competition amongst affiliates to recruit new affiliates (into the opportunity). Inevitably, due to recruitment competition, any business that is marketing the opportunity (whether openly or not) is going to slow down.
[36:30] Here’s the idea… how can we tap into all of these industries… without interfering with what’s going on in their business.
[40:16] We can walk into any business and say “Hey, check this out!” He’s gunna look at this and say “Where do I sign up?”
It takes a good twenty minutes or so for Strizheus to get to the point, but the gist of his “idea”, is basically an all-in-one internet marketing suite (merchant account, SMS marketing, email autoresponder, capture pages, membership site platform, blog platform, lead generation etc.). Strizheus refers to it as an “all-in-one, complete marketing and automation system”.
Strizheus plans on charging either $47, $97 or $197 a month for what he calls the “Magic Suite” system.
- $47 – autoresponder, subscriber management, blog and 10 landing pages
- $97 – the above plus 50 landing pages, sms marketing, tour pages (capture pages?) and “success education”
- $197 – what’s included in $97 and $49, plus a website builder, 5 membership portals, shopping cart functionality, merchant account, lead store (able to purchase leads) and live phone support
Strizheus shares his vision for Big Idea Mastermind, which he sees becoming like the well-known internet marketing forum, Warrior Forum. Strizheus claims Warrior Forum is full of “low-lifes” who should “shutup and not be speaking”. Big Idea Mastermind would build on the concept of an internet marketing forum, but with “zero tolerance for any sort of negativity”. A gamification aspect to the BIM forum is also discussed.
Compensation wise, Strizheus repeatedly states he wants to distance himself from “affiliates” and “network marketing”. He mentions revenue-sharing with “partners” through Big Idea Mastermind.
Affiliate membership is tied into the purchase of Magic Suite, which Strizheus claims will be “a piece of cake” to market to “a thousand subscribers”. After purchasing a Magic Suite subscription, customers are then able to opt in as an affiliate for Big Idea Mastermind (no cost except shipping on an “info kit”).
Via Big Idea Mastermind “partnership”, which Strizheus says is “limited to eliminate competition”. Affiliates are then screened under the guise of a “strategy session”, with selected affiliates going through to a “master strategy session”. Those who make it through this session are then hit with the option to purchase an “Income Speedway” (affiliate marketing) product, costing $1000.
$100 is paid to the telephone marketer who closes the sale, $100 is paid to the company and the rest to the affiliate who introduced the purchasing customer.
In addition to the $47 to $197 in commissions on Magic Suite, other products and services mentioned are a “Hush” business education” event ($2500 cost, at least $1000 in commission), a “high-end retreat” (cost $10,000, $3000 to $5000 commission), a “charter program” ($25,000 to $50,000 cost, no commission specified).
[02:33:38] We don’t wanna, I don’t wanna play with the bottom of the bottom: people who are desperate, people who don’t have the money.
We want to elevate our game and we want to play with the shakers and movers. We want to play with business owners, people who have the money, people who will invest, people who will not stress over a $5000 or $10,000 retreat.
[02:34:10] Will a desperate marketer who just, y’know, who just took his last fifteen or twenty dollars or a hundred dollars and invested it in a business opportunity thinking he’s gunna get rich… will they buy this? Heck no.
But again, we’re opening the door to business owners. We’re opening the doors to corporations, to offline companies. We’re opening the doors to network marketing companies and owners with giant teams of people.
Those people will not even think twice about investing $25,000 to go to and get like a charter program, to be able to hang out with, y’know, a few like-minded people, somewhere on a private island.
Big Idea Mastermind’s partner membership is something that Strizheus stresses will “not be talked about publicly or promoted”. It is by invite only. Strizheus predicts that his partners “will be ridiculously wealthy” [02:36:15].
Strizheus states he’s “looking for no more than a thousand partnerson a global scale”. Additionally, Big Idea Mastermind partners have to be certified, and must run their business from a business entity – they cannot be individuals.
Strizheus states this is because he
[02:46:50] doesn’t want to deal with compliance. I don’t want to deal with regulations, or the affiliate marketing industry, or the network marketing industry, because guys there’s gunna be none of that.
At [02:47:14], Strizheus reveals that Big Idea Mastermind Partnership is priced at $3000. Along with commission qualification and access to revenue-sharing, Big Idea Mastermind Partners also receive a 1 year $97 Magic Suite subscription and access to Income Speedway.
Purportedly, about 130 “businesses” have already signed on as Partners. Partners have to get certified in person at a Big Idea Mastermind event, “infront of a witness and our attorney”.
Whether or not Partnerships are commissionable is unclear. At [02:52:05] Strizheus reveals that the cost of Partnership is $497, which begs the question of where the other $2503 goes (to the company? revenue-sharing?).
Most of Strizheus’ webinar is dedicated to selling Big Idea Mastermind partnership to viewers, however I believe the reason for Strizheus severing ties with Empower Network is of far greater interest than his next venture.
The citing of South Dakota’s requirements to give prospective MLM affiliates a three-day decision time appears to be baloney. This isn’t a new rule so it begs the question of why Strizheus is only paying attention to it now.
The way he’s setting Big Idea Mastermind up, with partnerships, business to business contracts and Strizheus repeatedly stating he’s not interested in compliance or MLM regulation, it’s almost as if this is some sort of reaction to pending or existing regulatory action.
[02:57:36] There’s actual documents that you guys need to sign, in order to participate and get certified as partner.
And the documents are basically going to outline our code of conduct. It’s gunna outline our, y’know what you can and can’t do as a partner – so we will set some boundaries.
You step over those boundaries, you know what? Y’know if you screw up, you screw up on your own. Make sense?
I’m just being upfront with you. I don’t want to deal with headaches of managing people. We have way too many people now using Big Idea Mastermind’s image all over Facebook inappropriately. We have people using my name inappropriately – this is just ridiculous. We’re not gunna allow that at all.
What exactly that action might entail is a mystery. Empower Network hasn’t revealed anything thus far, and if Strizheus is personally under investigation – he’s keeping it under his belt for now. The only hint Strizheus drops is at [03:35:49]:
What’s going to happen to Big Idea Mastermind?
I’ll be totally upfront and honest with you. As far as me personally, I’m still going back and forth with, to try to see if we can do something about, y’know possibly negotiating with the state or proving (that) what we’re doing at Empower Network is not really a biz opp.
Although y’know, it’s gunna be pretty difficult because there’s a compensation plan involved for affiliates in the state.
Trying to prove to regulators that Empower Network is not a business opportunity? Yeah, good luck with that.
[03:36:28] If we can prove our case, then we can continue to do what we’re doing. It’ll just be a different division of Big Idea.
What exactly happens if Strizheus (and others?) can’t prove their case to “the state” is left unsaid as far as Empower Network goes, with Strizheus only repeating that he personally will exit the network marketing industry.
[03:36:37] Most likely though, it looks like personally I will have to exit the network marketing industry. Just because of the hoops that they’re making us jump through, in my state, to continue doing it – which is, it’s not making any sense.
As far as the system, Big Idea Mastermind system, if I’m able to leave it open – I will.
If we will be forced to either edit the system or to close the system completely, or maybe if there is also a possibility that maybe we can position the system so that I kinda take myself out from being on the system there, on the promotion materials. And maybe we can just build it around a leadership or something like that.
I’m open to those ideas as well. As of today right now, it’s kinda up in the air. So I really don’t have anything solid to tell you.
[03:38:15] I’m kinda between a rock and a hard place. And uh, it’s because of some laws of the state. And I’m not gunna do anything that’s grey, it’s gunna be black or white. So, I choose to do white. That is that.
As for the Big Idea Mastermind business itself, provided the partnership fee is not commissionable (it doesn’t appear to be), I don’t see any issues with it. Seems to be a straight single-level affiliate deal with actual products.
The revenue-sharing component is a bit murky, and Strizheus (deliberately?) doesn’t go into any specific details in the webinar.
I will state that even for a single-level affiliate program, $47 to $50,000 is quite the product price range.
At this preliminary stage it’s hard to gauge what the biggest team in Empower Network moving on will mean for the company. Ever since their flopped Blog Beast launch, Empower Network has been in decline.
Co-founder David Sharpe stepped down due to illness just under a fortnight ago, which casts an even larger shadow of doubt over the company’s future. Having loosely followed Empower Network for some time now, I’m not really seeing any clear path forward for the business.
Update 1st May 1st 2014 – Here’s an official response from EN on the issue of regulatory action in South Dakota:
From The Desk of Jonathan Cronstedt:
Hello EN Family,
Many of you may have been on a webinar last night done by Vick Strizheus / Big Idea Mastermind, and I wanted to clear up any confusion, as well as correct the inaccuracies from the webinar.
Despite what Vick inferred during the conference, Vick’s challenges in the state of South Dakota are directly related to his own efforts outside of Empower Network. There are no pending issues between Empower Network and the state of South Dakota (or any other state).
As it turns out, Vick has had challenges in the past in South Dakota related to another venture back in 2008. In 2013, unbeknownst to us at Empower Network, he was asked to refrain from promoting his “Big Idea Mastermind” in South Dakota. This request was disregarded, which led to the issues hinted at by Vick during the call.
For those of you currently going through the Internet Traffic Formula Course, it will continue to be delivered on time and it is my highest priority that you have an incredibly impactful learning experience.
We at Empower Network have long held the belief that your past is not your future, and that we are here to help you build your dreams, whatever they may be…and that belief requires that you will build that dream with integrity and honor, with respect for compliance, regulations, and rules that exist to ensure we all have an opportunity to build on a solid foundation.
I’m grateful to each and every one of you who has joined us in our quest to bring about an entrepreneurial revolution, and we wish Vick Strizheus and his family the best in resolving the current challenges he is personally experiencing.
CEO, Empower Network
P.S. To further clarify, Empower Network has made no endorsement for Nick Malis, Big Idea Mastermind, or any products/services of Nick Malis or Vick Strizheus outside of Empower Network.
If you chose to do business with anyone, we encourage you to do your own due diligence prior to any decision. Empower Network has no relationship, actual or implied, with Nick Malis, or the workshop mentioned on last nights webinar.
Update #2 1st May 2014 – Less than 12 hours after this article went live, Strizheus marked his webinar “private”. It is no longer viewable by the general public (although all the relevant parts have been transcribed above in this article).
Update #3 1st May 2014 – As of sometime in the AM on May 1st US time, Strizheus appears to have been terminated from Empower Network.
He claims EN corporate were on his secret webinar and probably didn’t like what they heard.