Leveraging Social Capital and the 8th Circle of Hell

Leveraging Social Capital and the 8th Circle of Hell

This weekend I was filling my car up with gas, as I was standing at the pump, a clean cut man approaches me. He said “do you drink energy drinks?” I thought that either he was admiring my muscular physique from a distance or he thought that I looked like the energy drinking douchebag type. As an aside, I do drink energy drinks and I’m not really that muscular, and come to think of it… I’m not even sure that energy drinks have anything to do with a muscular physique… but, I digress. I said to him “do you prefer sugar-free or not?” He went on to say that he wasn’t asking for himself. He introduced himself as “Joe” and that he is working with an energy drink company that was trying to establish a presence locally. I typically enthusiastically engage in conversation when salesman or strangers approach me because I’m secretly hoping I can pimp my iPhone wares to them or even my consulting services. We spoke a bit about what I do and then Joe offered me a sample of his energy drinks. Being the type that accepts candy from strangers, I gladly obliged. Joe said he would call me in a few days to ask me about my overall opinion of it. My fiance was waiting in the car, she said “what was that all about?” I told her that Joe was trying to break into the local market with his energy drinks. I told her that I admired Joe’s balls (not literally) for coming up to a random stranger. I then said that “only MLMers (people who are into MLM) usually approach me randomly.” “Maybe Joe is an MLMer” she said. “No, not clean-cut Joe… Joe just wanted my energy drinking expertise” I thought to myself.

Allow me to present a diagram to you:\

On Monday Joe called me. The dialogue was something like this:\ “So JP, what did you think of the drink?”\ “Meh, it wasn’t too bad, wasn’t great though.”\ “Hahha, well, we have a lot of flavors, so I’m betting that we can find one that you’ll like.”\ “Ya know Joe, I was thinking… I think it might taste great with Vodka.”\ “Hahhahha… that’s funny.” (I was being serious)\ “JP, did it cause you to crash at all?”\ “No, not it all.”\ “JP, I got to talking with my wife and I really enjoyed our conversation.” (Here it comes)\ “JP, I’m working with good people like yourself (see what he just did here?) in the area to expand our operations. Do you have any interest in this?”\ “Ummm… It’s not clear to me what you’re suggesting.”\ “JP, have you considered alternative income streams?”\ “Absolutely, I would love to expand my business and my consulting. If these alternative income streams were related to this and and my area of expertise, then no doubt that I would be interested.”\ “Oh, well, it’s not related to that… but thanks for your time. I’ll text you my contact info.”\ “Sure, Joe… thanks for the drink”

He then sent a SMS with his website. It redirected to an Amway page. *Sigh* I was naive.

Why am I huffy-puffy over this? I’m really not. But, I want to point out that most of these businesses suck for long-term growth.

Multi-Level Marketing\ Some of these can be legit. I have some friends that are Pure Romance consultants. People call them for parties, and rarely do I hear them trying to push their wares upon their friends. They are having fun and building a business. The same goes for Scentsy, Tastefully Simple, and Pampered Chef. But, by definition these are all MLM businesses. They rely on you eventually recruiting others and then that’s when you really start to make money. But you can still make money by selling the products and by having the parties.

Business that Leverage Social Capital\ One can make the argument that all businesses are like this. That’s true to an extent. But, I’m mainly talking about those salesmen or businesses that use their friends to get referrals. I had a buddy who I hadn’t spoke to in awhile tell me that he signed up to be a Farmer’s Mutual insurance agent. He then wrote that he wanted to get together and evaluate my financial needs. I flat-out told him that I don’t mix finances and friendship. Fortunately, he completely understood. Another insurance guy asked for phone numbers of my friends and he said that he would call them and say “JP and I are friends and JP thought you might need some financial assistance.”… I told this dude flat out that we aren’t friends and that it was pretty audacious for him to assume so.

8th-Circle of Hell\ This includes Joe. This includes the Dot-com Franchising douchebags. Amway. Quixstar. The guys that claim that you can make so much money by doing so little work. The guys who pass around wads of 100 dollar bills at their meetings. Yes, they actually do this, presumably to blind the attendees with greed. The guys that are really nebulous on their business models, but if you just buy their \$250 kit, you can get started and you’ll be commandeering your own yacht in two months. These are businesses owners who prey upon others to get them to sign-up for their programs to become their own business owners, but the real business model is in purchasing of the startup kits. This is Eiro; Eiro will try to blind you with greed, visit their home page and see for yourself. Many of these people don’t even know that they’re in the 8th-Circle of Hell, I don’t think Joe does. I don’t think any of my old acquaintances who dropped out of college to do Quixstar programs knew either.

I’m Almost Done\ Tread carefully with any of these businesses. Be aware that leveraging your social capital can have long-term disastrous affects. People will avoid you. Make sure that you’re not in the 8th-Circle of Hell… how will you know? If you you can only really make money by signing people up to be “under you”… then you are probably in the 8th Circle of Hell.

Overall, it’s important to consider your relationships and the implications of trying to capitalize upon them. This goes for any business. If you make websites, I think it’s a bit tacky to try to inject that in your personal conversations. But, sometimes, someone may remember this, and then ask you for a website. Remember, relationships matter most. Don’t jeopardize them for business.

What do you think about these businesses?

Follow me on Twitter: @jprichardson

-JP Richardson

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