Is cash gifting the core of the Empower Network?
In keeping with general tabs on the MLM industry as part of my research and what not here at BehindMLM, I process a lot more material on a daily basis than I write about.
One particular video came across my desk a week or so ago.
Despite being published a year and a half ago, I felt was worth dissecting as it pretty much confirmed the viewpoints I held about the company after reviewing the Empower Network late last year.
The “No Excuses Summit” is an annual training event (independent of Empower Network) run by Ferny Ceballos and his “crew”.
The footage we’re going to analyse today (available at the end of this article) is taken from the second No Excuses Summit which was held in mid 2011.
It features none other than Empower Network CEO David Wood as a speaker.
The footage from Wood’s presentation starts with him on stage telling the audience that he’s going to share “a couple of key concepts on recruiting through presentations and getting people to do stuff”, which Wood reveals he thinks “is important”.
Wood begins by sharing with the audience his belittling of a waitress in Costa Rica (where he lives). After telling the waitress that “money is trash”, Wood then proceeded to rip up a $50 bill infront of her (Wood claims that this was the equivalent of her weekly wages).
Wood claims he did this because he “spends a bunch of money and it’s there again the next day”.
Wood presses on and then tells the audience about his “ultimate discovery about money”. He shares how he hated school and that the idea of going to school, getting a job and earning money before retiring is “stupid”.
This belittling of people who have jobs is a common tactic deployed by marketers to present the idea that only two options exist in life: holding down a job you hate or participating in whatever it is they are pushing.
Wood does so by claiming to have once “worked in a cubicle” where he had to ask his boss to go to the toilet. Wood claims that his boss refused his request and told him to wait for the break.
Short of acknowledging that this is simply an attempt to appeal to their target demographic (unhappy and desperate people) and noting that it’s complete baloney, this isn’t something I want to get into here.
After finishing outlining the process of getting an education, working and retiring – Wood declares it to be “the stupidest shit ever”.
Wood then tries to justify the opportunity he’s in (it’s not clear what opportunity he is talking about, but it’s probably not Empower Network as it hadn’t launched yet), by claiming that it’s ok “98% of people don’t make it” in the opportunity, because “90% of people” who work don’t make it either.
Wood states that “at least if you fail in this you only spend $500”.
Now as I said, I’m not here to have the whole “getting a job is BS” discussion because that’s not what caught my attention in the video. What Wood does next however is definitely worth paying attention to.
Wood attempts to break down having a regular job as simply “a boss giving you money”. For someone who just declared having a job was “the stupidest shit ever”, I thought this was the height of irony.
No boss in the world simply gives you money. You work and you earn it.
Despite the apparent “stupidity” of Wood’s statement, why he made it then gets clearer as the presentation progresses:
[3:50] So in other words the only way to get money is to have someone giving it to you, right?
I mean isn’t that a funny concept, I mean nobody ever thinks about that. How do you get money? Well somebody has to give you money.
Actually, despite claiming that nobody has thought about it, what Wood is infact describing is a well-known concept in scam circles and is referred to as “cash gifting”.
Cash gifting requires no work and is simply the exchange of money between individuals, typically involving a pyramid like structure with money moving up the pyramid to those on top.
[4:04] So anyway I realised this and I said, “well what’s better right, boss giving me money… or thousands of people giving me money all the time and I don’t even have to talk to them.
Wood then sings the praises of his supposed “cash breakthrough”, reasoning that if one person stops giving him money that it doesn’t matter “because there’s lot more people giving me money every month”.
And then, right at the [4:45] mark Wood delivers the most important message of the video.
So then it became this thing, how can I get lots of people to give me money all the time – where they just keep giving it to me all the time.
Just a few short months later, Wood co-founded the Empower Network with David Sharpe.
Apart from David Wood openly professing that people giving money to people is “why he likes (the MLM) industry [4:56]”, I couldn’t help but observe that Wood’s cash gifting ideas perfectly superimpose on top of Empower Network’s business model.
When I went over the Empower Network business model late last year and reviewed the company, one of the things that struck me was that it was entirely possible to join the company and simply earn commissions by recruiting others.
This of course is the definition of a pyramid scheme, but close analysis of Empower Network’s product revealed an even more worrying conclusion.
With the company using the free WordPress blogging platform to power its network, essentially aside from hosting fees and the yearly domain registration of the company, you’ve got a bunch of people paying eachother money each month for something that is free.
The fact that WordPress is free is entirely why Empower Network pay out 100% commissions between members. Peeling back the business model onion, members are essentially just giving eachother their monthly membership fees.
Throw in a perpetual 1-up compensation plan that passes money up on the 2nd, 4th, 6th and every 5th sale thereafter.
As long as people continue to pay monthly membership fees, money continues to trickle up the company – right to the top where Empower Network’s CEO David Wood and President David Shape have positioned themselves.
One must remember that now with thousands of members gifting eachother either $25 or $100 a month, it was only just recently that Empower Network allowed members to turn off the mandatory business opportunity advertising that completely dominated any content members were publishing on their Empower Network blogs.
Prior to that the mandatory emphasis on any member-generated content was to recruit new members into the scheme and get them gifting their uplines either $25 or $100 a month.
Why David Wood thinks the concept of cash gifting is a “breakthrough” I have no idea, but as long as people continue to stump up their monthly gifting fees Empower Network will continue to stay afloat.
Now entering their second year of business (the typical breaking point for pyramid and Ponzi schemes), it’ll be interesting to see if the company can survive without having to “relaunch” in new countries to keep the gifting going.