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.
It’s actually a bad idea to blame it on “failed to raise the capital needed”. It was the IDEA itself that failed, and failing to raise capital is only a symptom. It wouldn’t have been any solution if they had raised more capital, the idea would still have been flawed.
The initial idea revolved around a pyramid scheme model. It would have worked exactly as any other pyramid scheme, there’s nothing new and innovative in that. But it will also imply some unwanted risks, e.g. the risk of being permanently barred from network marketing.
“NO EXCUSES SUMMIT”
“Failed to raise capital” is an EXCUSE rather than an explanation. These guys are heavily involved in the “No excuses summit”, and they don’t manage themselves to reflect the ideas they want others to believe in.
They should probably rename that seminar, or give it a new section “Favorite Excuses Summit” where they can list all different types of excuses people can use when their own ideas have failed.
It was the IDEA itself that failed. It was heavily flawed, based on selfdev ideas rather than on business ideas. Those two types of ideas can be in conflict with each other.
My take was they blew all their money trying to make something new work, when they were informed the original pyramid scheme model wasn’t going to fly.
Then they thought they could raise more funds to go back to the original model (presumably ignoring legal advice that had been given beforehand).
Investors said “no” and here we are.
Oz, to be fair with Momentum Factor and Mr. Gilliam, his company provides lots MORE than just reputation management. We don’t know what exactly did Terry LaCore hired him to do.
It may be for his prior bHIP dealings, could be corporate training, compliance training, and other stuff, but it *could* have been PR spin control. You did make it sound like Gilliam only does reputation management.
For clarification, I have no knowledge whether or not Gilliam “supressed” information for Lacore. I can only go by what comments Gilliam left on Thompson’s site and Lacore’s glowing Momentum Factor testimonial.
I imagine Lacore and his securities violations certainly fits the Momentum Factor client profile. That being clients who would want information to be “supressed”. Paying Troy Dooly to write fluff pieces only strengthens this view.
Whatever else Momentum Factor do is not really relevant. Gilliam’s sales pitch on MLM Attorney told me all I needed to know, and it left more than a bad taste in my mouth.
Running out of money is normally a symptom rather than a cause in business. That’s why I mentioned the “Favorite Excuses Summit” as a new idea for selfdev seminars. They seem to really need it, so they might as well make it become a legitimate part of self development.
BUSINESS IDEAS VS SELF DEVELOPMENT IDEAS
Business ideas will use different logic than selfdev ideas, e.g. they will focus on the market rather than on your personal efforts.
If the market is growing, you can produce more goods and hire more sales people. If the market is shrinking, you’ll need to reduce production and cut costs. It will be the market that generates the results rather than the personal efforts. Personal efforts can of course add to the results, but it will not be the primary factor.
Personal development will see it from an opposite viewpoint. They will always credit their own efforts when something work, and will blame “something out there” when something fail.
That’s one of the reasons for why I will consider “unbiased reviews” to be a better business idea than “exposing frauds”, as a platform for a blog. It’s an idea that is much easier to sell, e.g. to find ideas people already believe in.
The ideas were primarily based on selfdev ideas, e.g. on personal efforts and marketing techniques, rather than on the market itself.
Ideas like that CAN work if you’re selling self development, but they won’t work in any type of business. Rippln was too focused on selfdev ideas.
It’s about time these crooks call it quits and stop charging people for something that failed MONTHS ago!
This shouldn’t be a surprise to anyone with a brain.
See ‘ya Rippln! 😉
This says it all. Too many people went into to the “market” ( and so they thought) but never understand the fudamentals like this.
First off, through a proxy in one of the FB groups Brian Underwood is trying to pretend the company might survive.
Please take note of today’s date and recall that membership fees are paid month to month. Brian wont confirm the demise until he gets one more round of payments.
One thing I’d like to highlight is Underwood’s leadership style. “App Share” isn’t paying, the company is being sued and the company is going under yet when was the last time Brian faced his affiliates? Early last month.
All of the people who got roped into this deal, who believed in it and believed in him are left hanging and he’s hiding under a rock somewhere.
THIS is how he runs a company. For all the lessons to be learned here one of them is this. When the going gets tough, Brian goes missing.
“The market” is simply the whole group of potential customers, those who REALISTICLY can be interested.
What they should have known and when they should have known it:
September 8th of last year Rippln held a “for your eyes only” webinar. This was a day or so before the full launch of the iOS version of their Photo Guessaroo game.
The webinar included a simple step by step plan for driving 100,000+ game downloads in it’s first week.
They went on to explain just how important that download number would be for the company. How it would make the industry take notice of Rippln and prove what a powerful distribution channel they had created.
About a week later Jonathan Budd on a “state of play” call said how “blown away” he was and what an “amazing success” the first week’s almost 10,000 downloads was. Less than 10% of what they hoped and this is how Brian Underwood presented it to the field:
“Monumental,” “history breaking,” a “complete validation of everything they were trying to do.” He was lying about the in app purchases, he was lying about app developers being impressed. In short, he was lying about almost everything.
Not long after that video Rippln stopped promoting the game and seemed to forget it existed (much like the rest of the world). The only time the game was mentioned on the facebook pages was by people asking when the promised Android version of the game would be released.
The fact is the iOS version of the game never produced enough revenue to warrant paying for development of an Android version.
The point being that Photo Guessaroo was promised to be a massive viral hit that would put them on the map but all it really did is give concrete proof that the company was completely unable to produce a large enough number of downloads to have any relevance in an app marketplace.
Brian knew all of this when he shot the video above and yet, tried as hard as he could to pretend otherwise. This is by no means the most egregious lie Brian told about this company but it is one of the more significant.
He knew on September 19th that their model didn’t work, and in all the time that’s followed he hasn’t found any way to fix it.
Odd language in Bunch’s note he talks about “investors” but then says “the investors had to decline the opportunity to purchase Rippln”. Purchasing a company isn’t the same as investing in it. It’s a buyout/acquisition/etc.
I’m sure he’s using the term “investor” loosely rather than “buyer.”
If you have a startup with potential you can get investors to provide capital for a % of equity and other consideration. If you are in dire straights you try to sell the thing for whatever you can get.
We don’t know how much the investors / principals cashed out, and how much revenue was used for growing the business.
They could have milked the cow dry….
My take on this is that aren’t or never were any investment capital put into this. This excuse was by design.
Their plan all along was to collect $30 a month from as many people as possible and quietly close down before getting too much from too many people, for the purpose of disappearing before the feds ever started an investigation.
I don’t know, Al. I don’t think BU and JB and the rest are *that* stupid. Remember, they burned Terry LaCore’s money too. And he’s a lot better connected than they are.
You sure it’s a rock? I heard he was hiding out below some trees…
Don’t forget about the impending law suit, due the first week of Feb I believe.
My take is, that was the final nail in the coffin, as they either had to sink some real money into the company to defend their case or, just close the door on the rippln name.
Some days ago I was writing an update over at RS and mistyped his name as “Underock.” My best Freudian slip in weeks so I left it.
One additional point of note in the second video in post #10. Listen to what Brian is saying at about the 3:20 mark.
The same week the Photo Guessaroo game was launched they also released their first round of paychecks. Please understand that under Rippln’s comp plan there are Loyalty rewards and there are Coaching rewards. Brian specifically describes the pay run as Loyalty rewards.
This was at a time before the smart watches were available, before “App Share” was available and the game app had just hit the app store so it hadn’t started paying yet (not like it ever did).
In fact the only thing that Rippln had for retail at that time was the Joseph McClendon “E-Factor” coaching product. But guess what, that was a coaching rewards product, not a loyalty rewards product.
So with no form of “loyalty” product available for retail what did Rippln pay rewards on? Unless you’re a bald headed industry expert it isn’t hard to see. They were paying a portion of the monthly affiliate fees to the people who recruited those paying affiliates.
Just another reason this company was never sustainable.
It’s not over until the fat lady sings. Until we have an official announcement, I’m still not going to say it’s done.
People lauding Bunch for his letter seem to have forgotten all the lies that fell out of his lie hole on the subject of Rippln. None of these guys should get off Scott-free.
What is going to be interesting to me is if they pull the plug officially before or after this next monthly fee is due and paid by the affiliates.
I’m betting they will after. They want and need one more milk run before shutting the doors and trying to hide.
Hopefully they will show some integrity and do it before and save some dignity.
They used the monthly membership fee to pay out commissions?
That method will be about faking some sales commissions when the sale itself has failed to produce the expected commissions, e.g. by using 5-10% of the monthly $30 membership fee to pay affiliates for the number of people they have recruited, rather than paying them for sale of products.
That method makes some sense if you’re primarily selling the opportunity, and will need to show SOME proofs for that the program actually will be able to generate some income.
But that method also has some $30 per month limitations. It can be used to fake profitability for some payouts, but it won’t make the program become profitable in itself.
Rippln clearly hasn’t worked like it was intended to work. The core idea for that type of program is about making OTHER PEOPLE believe in something, to make them willing to PAY FOR the opportunity, to generate income to the ones who recruited them.
What I’ve learned from all of this is that some well-intentioned ripples can be devastating to others.
Yep, that’s sorta why I fixated on them. If I got my knickers in a twist over every MLM that was simply a stupid idea, well I’d have very twisted knickers.
There really was almost no retail activity in Rippln. Fewer than 500 smart watches and not many more of Jim Bunch’s coaching products were sold and that was just about it.
The overwhelming number of dollars that changed hands came from affiliate fees. And in typical Rippln logic the lowest level players received almost nothing while the big recruiting “all stars” got the rest and matching bonuses to boot.
Twisted as it may be the only argument that can be made to bill for another month is those fees are the only money Rippln has to pay the field with. And pert near always was.
Mirror..mirror on the wall…Who’s the most beautiful of them all…It’s Rippln!
So did Brian Underwood take the February Subs?
Apparently they are still taking subs. Brian is milking this one dry.
As of 2-12-2014 Rippln’s official FB page has been completely scrubbed of comments, negative and positive.
Disregard, it was my client with a bad cache.
Just received this email directly from Rippln HQ!! Seems they are trying to milk this one for as much as they can…….
May 6th, getvapt.com still assures us that it is coming in April 2014
“be apart of the movement” Such bad copywriting.
I almost hope they do launch something because I miss the unintentional comedy.
launchv.com shows a video of a company that sounds very much like the name Vapt with the same general concept Rippln had…. wondering if they have changed branding again and are now promoting Vappnet LLC..