Rippln is sunk: How NOT to close an MLM company
Just under a fortnight ago Jonathan Budd conceded that Rippln was all but finished.
The gist of it?
If Rippln failed to secure another round of investor funding, the company wouldn’t be able to continue operating.
Now, sometime in the last twenty-four hours, fellow Rippln co-founder Jim Bunch has confirmed that this latest round of capital raising failed.
I wanted to personally connect with you all and let you know that Rippln will be closing it’s doors very soon.
As you may have heard, I brought investors to the table to acquire Rippln and bring it back to the original vision and mission.
Unfortunately, the due diligence made it apparent that we would not be able to raise the next round of VC capital that would be necessary to take Rippln where it needed to go and therefore the investors had to decline the opportunity to purchase Rippln.
Please know that I respect and appreciate each and everyone of you and the contributions you made. Reaching out to your trusted friends and family and sharing the vision shows a great commitment on your part.
Also know that the partners in Rippln invested an enormous amount of time, energy and resources to give it a chance at success.
The goal was to do something that had never been done before…and while there were a number of those things accomplished, in the end, there were a few things that could not be overcome.
Please feel free to reach out to me personally if you feel the need to do so and I’ll be happy to connect with you each.
There are a few really great lessons I personally am grateful for and I hope you invest a few moments in capturing your lessons and insights so we can all look back and appreciate the gifts we were given by being a part of this company.
It’s now time to focus my full attention to the Vision and Mission of The Ultimate Game, which is to Inspire Happiness, Health and Wealth Worldwide.
Thank you again for your trust and energy, I really do love and appreciate you all.
Am I surprised Rippln failed to raise funds to return it to the pyramid scheme model they spent eighteen months developing? Hardly.
What I did find interesting was the acknowledgement, finally, that due diligence played in burying Rippln for good.
That Rippln has been a stagnant mess for months is well established, but what can we learn from their mountain of mistakes? And what were the two core issues that majorly contributed to how the business was ineffectively launched and managed?
Today I thought it’d be worth reflecting on just how Rippln got to this point.
To begin, it’s impossible to discard the significance Rippln’s original business model played in their downfall. Rippln wanted to charge affiliates $300 or so to participate in the opportunity, and reward them financially for recruiting others.
Whacked onto this was something about app sharing, but the “upfront” sell was pay money, recruit others, get paid.
Subsequently Rippln spent considerable time and money organising events around the US promoting this model. When I got a hold of it and exposed it for what it was, shit hit the fan and the story changed to “we haven’t finalised our compensation plan yet”.
This is what I refer to as “deception by design”, and it set the tone for pretty much everything else that Rippln has done over the past year.
To this day, those behind Rippln are only known to myself as “the other investors”. I know of the co-founders and public faces of Rippln (such as Michael Rutherford), however even that was via my own research and never properly provided to affiliates and the general public.
Counter to the belief that a viral pre-launch campaign that reveals as little information as possible is best, if I see terms like “who owns Rippln?” or “what is Rippln” as leading search phrases for BehindMLM articles on Rippln – this is a problem on the company’s end.
As part of my review process, I typically include a bit of background information on the company I’m reviewing and whoever is in charge. This information should be supplementary to what the company itself provides.
If it eclipses what the company itself is prepared to reveal – this too is a problem on the company’s end.
I think this issue was perfectly highlighted with the handling of the uncovering that Terry Lacore, through Lacore Enterprises, was not only a major investor in Rippln but also a silent co-founder.
How did Lacore respond to BehindMLM breaking the news that someone busted by the SEC for securities fraud was not only involved in financing Rippln, but also that the company had hidden it?
Lacore hired Troy Dooly to put out a sappy “getting busted for securities fraud is not so bad” video and accompanying article. He also engaged the likes of Momentum Factor.
Taken from the Momentum Factor testimonial page,
We have been working with Jonathan and Momentum Factor for more than a year and have been impressed with their professionalism and integrity. The results have been great!
~ Terry LaCore, CEO, bHIP Global
What exactly does Momentum Factor do? Well, according to owner Jonathan Gilliam:
Our reputation defense team similarly serves at the front end of a company’s need to “do something” to combat online
The good news is, companies CAN defend themselves, often without the Meanie even knowing, via online suppression strategies.
Online suppression strategies? Bit of a fancy term to use. Why not just come out and say that Momentum Factor simply works towards hiding information that makes it more difficult for people to conduct thorough MLM due diligence.
I totally get why Lacore was left out of the Rippln presentations and what not, but as far as MLM company disclosure goes – it’s just not good enough.
Instead of hiring Dooly to write articles with silly titles like “Do you know the REAL truth about Terry Lacore?”, and engaging Gilliam to suppress who knows what, this should have all been openly disclosed by Rippln themselves at launch (that Lacore was onboard, not necessarily the securities fraud).
And Lacore is only one example. What about the other investors and owners? It’s 2014 and people are more connected than ever. Trying to “suppress” this information is a probable exercise in futility.
And even if you do succeed, you do so at great loss of confidence in your business. When push comes to shove and you start asking people to hand over money, shady figures at the top of a company do not result in people opening up their wallets.
If you want to control the information put out there about your MLM company, you have to take the initiative and put the information people are looking for out there. People having to turn to sites like BehindMLM and others marked for “suppression”, just for basic company information, is a symptom – not the problem itself.
Yes people are still going to read about Lacore’s SEC troubles but it’s something that can’t be avoided, not in this industry where due diligence is of such significant importance.
Now it’s of course too late but what should have happened, instead of the information blackout viral marketing wankfest that went nowhere, was an initial launch of Rippln’s website complete with full disclosure.
Who they were, what they were about, how they were going to set about it and of course who was involved.
And that brings me to my next point…
You can’t run an MLM company on Facebook.
As the boys at Empower Network are now slowly coming to terms with, trying to run an MLM company entirely off of Facebook doesn’t work in the long-run.
What happens is you attract MLM marketers who use Facebook and whoever might be on their Facebook Friends lists – then things start to decline.
A Facebook company page, groups and communities are all great communication tools but shouldn’t be your primary hub of communication and source of company information.
People, including potential customers, need a place to go where everything is laid out for them. I’ve already gone over how Rippln completely stuffed up the revelation that Terry Lacore was involved, but that’s only one example.
Throughout Rippln’s lifespan there wasn’t a single place people could go to get some insight into the company. Brian Underwood rabidly updated the company’s Facebook page, but Facebook is a terrible platform to search through for information as the months go on.
Rippln does have a blog, but it’s updated once in a blue moon and is mostly full of hypey marketing copy. Not to mention the design layout of it is completely hopeless too.
If Rippln had not launched their silly viral marketing “no information” campaign, they could have invested in a proper website that would have given them a proper platform to engage the public, their affiliates and potential customers with.
Getting back to the topic of secrecy, the end-result of Rippln not having a functional and informative website is best exhibited in their communication over the last few months.
I figured something serious was up with Rippln in early December. Months of non-stop marketing hype and then abrupt silence? Cmon.
Information later provided by Jonathan Budd revealed that Rippln had lost its funding around November. This explained why things had gone quiet.
Yet instead of disclosing this on either Facebook or their never-updated blog, you had Brian Underwood telling Troy Dooly everything was fine.
If you were a Rippln affiliate and didn’t read MLM Helpdesk, too bad! Neither Budd’s announcement or Brian Underwood’s response through Troy Dooly, were ever communicated on the Rippln website or Facebook page by the company.
Half of that brings us back to having an appallingly ineffective website to inform affiliates with. The other half? Once again, deception by design.
I don’t know how else to explain Brian Underwood putting down Rippln’s silence to Thanksgiving holidays, when the actual reason was because they’d just lost their funding.
To really drive this point home, neither Rippln’s loss of a funds, the Thanksgiving excuse Underwood gave Dooly, or either Jonathan Budd’s or Jim Bunch’s recent “investor problems” announcements have been communicated in an official capacity on any platform by Rippln.
Neither has the recent lawsuit filed against the company for trademark infringement.
Behind the scenes things at Rippln have been falling apart for some time now, publicly though Underwood’s been selling Rippln affiliates rainbows. If one visits the Rippln website today, you’d be entirely forgiven for thinking anything was amiss, let alone an imminent collapse.
All the Rippln website tells you, and all it’s ever really told anyone really, is that 1.4 million email addresses have signed up already – so why not just hand yours over too?
The case-study of Rippln, the above of which is hardly a comprehensive list of their failures, is interesting in that it brings together a lot of key issues facing MLM startups these days.
For me the two biggest issues Rippln faced were communication (the lack thereof) and secrecy. And I hope my thoughts above offer some perspective to anyone considering launching an MLM company at some point.
Despite the requests, I make it a point not to engage in any private consulting. Any analysis I conduct is put up here at BehindMLM for anyone to read.
Meanwhile I also hope those involved in the affiliate side of Rippln might learn from their experience and adopt a better approach the next time a “Rippln” rolls around.
And believe me, despite the lack of a long-term vision in the hypey approach, it will. The short-term reward is just too irresistibly luring to a certain type of MLM company owner (current and would-be).
In retrospect and given the core problems I’ve identified above with Rippln’s execution (note that I didn’t even touch on the product/service problems), I think it best I leave you with some insight from Jonathan Budd – circa April 2013, when Rippln had begun its public marketing campaign in earnest:
I’d like to take a moment as someone who’s part of the founding team at Rippln, to address much of the mis-information coming from many commentators, and the opinions being offered as fact.
It’s a simple concept, which obviously has proved many people agree with us. We’re not surprised that many critics will come out, and attack something they don’t understand… but it’s important people have the proper information.
The criticism so far for our model, is frankly something we cannot fathom to us because no one knows any details yet.
I am more then happy to continue to dialogue as time permits. My simple request is this… please treat us with the same respect we are treating you. The connotations that we are being misleading, or hiding anything, are undeserved.
All of us have put our credibility, resources, & the faith & trust we’ve developed with communities for decades into this.
Frankly it’s short sighted to think that people who have MASS exposure in this industry, who are highly public, who have a tremendous amount more to lose than anyone commenting so far would ignore all the basic principles required to succeed in this industry.
I can absolutely promise you… any amount of thinking you have done about the legal, financial, operational, and product concerns for our company… we have done 10,000x more. Every single person on this team is committed to creating a rock solid, long term, very unique & innovative company.
For all those criticizing our model, it’s become apparent to me you have very little education in how businesses are being run in the app space today. I recommend you go educate yourself so you can be a proper informant to the market place.
I can only imagine what a kick in the teeth Budd’s words are now to anyone who contributed financially to Rippln, as an affiliate or otherwise.
That said, from Rippln’s still anonymous owners and investors, to the ones we know about, to their affiliates, to those that have followed Rippln from “the outside” and even down to Jonathan Gilliam and others who make a career out of suppressing information such as this – I hope we can all learn something from Rippln’s demise going forward.
In the aftermath of one of the biggest MLM marketing launch failures of 2013, I’ll of course still be here at BehindMLM doing what I do and learning with the rest of you.
Thanks for reading.