Business
What’s an MLM? How Does it Work?
A while ago, one of my favorite hobbies was going on Reddit and browsing r/antiMLM. There were tons of scandalous stories and hilarious messages centered around these people promoting their MLMs. Even more entertaining were the countless YouTube videos I watch on the rise, fall, and terrible business practices of various Muti-Level Marketing companies.
While this content was entertaining, as I drove deeper into the subject, I began to feel a sense of sadness. Every day thousands of people are swept up in these MLM schemes. They lose money, friends, family, and overall quality of life. And it makes you wonder; if so many people are sacrificing their livelihoods for these companies, then what’s really going on? What exactly is an MLM? And how does one function?
The Structure
If you’ve been online within the past decade, there’s a good chance you’ve heard of the term “MLM.” However, you might not know exactly what it means. Well, I’ll put things into perspective for you. If you ever encountered cryptic Facebook or Instagram message asking you to buy some products, host a party, or join some kind of “exclusive” business, then you’ve had a firsthand encounter with an MLM. Congrats… I guess.
These messages, creatively nicknamed “hunbots” are often sent by friends, family, or other mutuals. And if you got an iffy feeling while reading them, that’s because these users are caught up in a very common marketing scam. As mentioned before, the term “MLM” is an acronym that stands for Multi-level Marketing. You may also know it as network marketing, or a pyramid scheme.
Well-known MLM companies include LuLaRoe, Mary Kay, Avon, Amway, and Herbalife. (And there’s more where that came from, unfourtunately)
The Pyramid
I really like the use of the term “pyramid scheme” because when you look at the structure of these companies, they follow or format that is shaped like a pyramid. The higher-ups at the top are comprised of a very small number of people. Meanwhile, there’s a sh*tton of struggling workers at the bottom, all with lost Investments and broken promises.
Let’s say there’s one businessman at the very top of this pyramid. As the head of the company, he hires two more employees under him. These employees must pay an entry fee in order to join the company. Afterward, they are given products to sell, and some of the proceeds go to the big boss. These other two employees than hire their own employees to work under them. Same deal; the employees on the third level show the products, and most of that money makes its way up to the one at the top. The cycle goes on and on and on to form a pyramid.
The Typical Experience
So how does this work from the average MLM’s employees perspective? Put yourself in the shoes of someone who just got sucked into an MLM. I know, it’s terribly cringeworthy, but bear with me.
So you’re a new recruit. You must pay an entry fee to join this exclusive establishment. The cost may vary, but usually, the more you pay, the more benefits you receive. They may even have to your systems.
You’ll then be given products to sell. You may have to pay a fee to get these products in your hands on them. You might have to sell them at a higher cost than their unit price. But here’s the deal; more emphasis is placed on the action of recruiting more members. You will get paid in commission for every new member that you recruit. And guess what they use new members will do? They’ll pay entry fees just like you, and go on to try and recruit new members themselves. The way the system works is that it benefits only the higher-ups and early recruits. Hence why they call it an MLM. It’s got multiple levels, and the higher up you go, the more you’ll benefit at others’ expense.
What these companies won’t tell you is that new members are their main source of income. When new recruits run low, that’s when the company starts crumbling down. And once that company crumbles, the early recruits and CEOs collect their money, while regular employees are left broke.
The Manipulation
To most people, spotting these MLM companies is pretty easy. A job offer that charges entry fees, has a vague company set-up, or has no adequate interview process, is naturally going to raise some alarm bells. So you might be wondering; how the hell do people fall for these things?? Aren’t they obvious scams?
In truth, it’s not obvious to many demographics. And if you happen to get swept up in an MLM, it’s really hard to get out. Unfortunately, the only reason these businesses still exist is that people keep falling for them.
Strategies
There are three strategies that MLMs use when recruiting people;
- Targeting certain demographics
- Using charisma and big promises
- Giving people a sense of belonging
Let’s circle back to the “hunbots”. Ever wonder why those MLM messages will often use this upbeat “girl boss” language? Well, that’s because most of these companies are created to appeal to young college girls and middle-aged women. Young adults sometimes don’t have enough life experience to notice when they’re being scammed. Meanwhile, some older people don’t have enough tech-savviness to notice online ploys. Many women enjoy the idea of becoming their own boss and achieving a sense of empowerment.
Of course, many men fall for this as well. Normal jobs can be sucky. Sometimes you just wanna make easy money on your own schedule. Especially when the companies in question promise big returns while working on your own schedule. MLMs will often have spokespeople who can convince you to care about their cheap leggings or mediocre supplements.
Once they get reeled into the business, MLMs will host social events that provide a personal connection to other employees and higher-ups. They’ll start to form a bond with these people, until they become almost like a family. Remember that job you wanted to quit and knew you should quit, but the people were so nice that you just…had a hard time? Well, it’s that time 1000, because by this point you’ve already invested so much money and time into them.
I’ve read so many horror stories of people losing their cars, their houses, their kids, all in the name of some cheap makeup products.
It was just a week ago that X chair Elon Musk told former X advertisers like Disney and Apple to “go f*ck themselves.” And in a shocking twist, it didn’t bring them back.
This all marks a dramatic turn the-artist-formerly-known-as-Twitter has taken over the past year. At the start of 2023, advertisers were bullish that the richest person in the world could turn the stagnant social network around. Now, the opposite seems increasingly likely.
As we enter 2024, many advertisers are asking the question: is advertising on X still worth it? Let’s take a look.
The war on X advertisers
(Image source: The New York Times)
The problems started almost as soon as Musk’s deal to buy Twitter closed. By November 2022, NPR reported that they’d lost 50 of their top 100 advertisers. By February, more than 500 of the top 1000 had left. Their concerns included impersonation, staff shake-ups, reinstating banned accounts, and more.
Amidst all this, Musk made efforts to stem the bleeding, including offering flashy deals for advertisers and, eventually, hiring Linda Yaccarino to take over as CEO.
But at the same time, he lashed out at those who’d left, threatening them with lawsuits and accusing them of “[hating] free speech in America.” This cycle continued throughout 2023.
Things took another turn in October when Musk personally endorsed an antisemitic tweet accusing “Jewish communities” of promoting “hatred against whites.” Musk has apologized, but has not deleted the endorsement.
This seems to have been the final straw for many major advertisers, including Disney and Apple. Musk seemed pessimistic at the NYT DealBook Summit, saying these advertisers would likely kill the company.
What marketers are saying
Marketing consultant Lou Paskalis told the New York Times that those who’ve left X won’t be returning. “There is no advertising value that would offset the reputational risk of going back on the platform.”
Other outlets report the same. Companies feel that X advertising could stain their reputation—if not now, then the next time Musk starts a fire.
Penji is a leader in the design-as-a-service industry, offering creative services to businesses and agencies at a subscription rate. We spoke to Harper Goldman, a senior member of Penji’s marketing team, to get insight into how the marketing industry is responding.
“On the one hand,” she says, “of course the advertisers were going to leave. That’s the whole tension of the internet. The less rules you have, the less money you make.”
“On the other hand, Apple pulled out before, and then they came back. I don’t think any company’s actually faced blowback for advertising on Twitter—it’s still seen as a regular social network—so if there’s money to be made, they’ll probably be back.”
That raises the question: is there money to be made?
Is X advertising worth it in 2024?
Look, in light of Musk’s statements, we’re not gonna tell you you should advertise on X. But there may be some upside.
When a majority of top advertisers leave a platform, it creates a lot of cheap inventory. CPMs for advertising on X have reportedly been slashed since Musk took over. The platform still gets a ton of traffic, so making use of it can be a way to stand out… if you want that kind of attention.
Here’s the thing: the downside of X isn’t just association with Musk. Musk’s takeover has led to a huge spike in stolen content and impersonation, which the dwindling moderation team struggles to keep up with.
As it becomes a less reputable platform, less reputable brands have flocked to it. This means that advertising on X can mean sharing space with sketchy brands, criminal activities, and yes, more bigotry than ever before.
The bottom line: Advertising on X is high risk. There are bound to be more controversies to come, and most advertisers would rather get out now than wait for the other shoe to drop. It can also be high reward, so it’s up to businesses to decide what risks they’re willing to take.
What other options do marketers have?
“Twitter was never a huge part of our strategy,” Goldman admits. “Or a lot of our clients, for that matter. The reporting is not good, the targeting is not good, there’s a lack of control. And Facebook and Google have so much control and so much reporting that there’s really no contest.”
This is another piece of important context. Twitter wasn’t an important platform for most brands, and its appeal was always niche. While it’s a highly trafficked website, it wasn’t great for advertising to begin with.
At Penji, whose target audience is marketers and agencies, shakeups at X haven’t made much of a difference. “The only difference is that it’s in the news. People are talking about it. But that doesn’t mean they want to use it.”
Conversations around X have shifted from “Can Musk turn it around?” to “Can he control the damage?” The platform is still leaking brands and users, and people are starting to wonder how long it can stay afloat.
Our recommendation? The social media landscape is changing fast. Stay on top of new trends. There’s still money to be made in X advertising, for now. But don’t say we didn’t warn you.
Looking for an alternative to a freelance graphic designer? Are you trying to scale your business using your existing team? A new wave of companies who call themselves “Unlimited Graphic Design Services” are disrupting the creative industry, providing a solution to what is usually an expensive and unpredictable task. Here’s what their offerings have in common:
- Monthly subscription model
- 24-48 hour turnaround time
- Work with their vetted team of designers
- Unlimited design requests
- Unlimited revisions
- Money-back guarantee
- Cancel anytime
Which Provider Should You Choose?
We’ve done the homework and curated a list of Unlimited Graphic Design providers for you and also negotiated special deals on your behalf. You can see them all below and decide which one fits your business based on your needs.
Unlimited Graphic Design Providers
What Does Unlimited Graphic Design Mean?
These unlimited graphic design services have a monthly subscription business model. That means you can sign up and cancel whenever you like. What sets them apart from your typical freelancer, agency, or in-house designer is you gain access to a workflow that is designed to be quick and to the point.
You’ll communicate with their team through Trello, email, or an online platform. The option given is dependent on the company you choose. For example, only a small selection of services provide a custom built online platform for their customers.
Once you’re connected to their workflow, you can begin submitting as many design requests as you want. Although they all claim “unlimited”, it generally means you can “create” unlimited design requests. It doesn’t necessarily mean they’ll work on them all at once. Usually, they just work on one design at a time. When one completes, they start the next design.
The usual turnaround time is between 1 – 2 days, and that’s just for the first draft. It doesn’t mean your entire request is complete. If you don’t like it, you can request as many revisions as you want, and that will take more time. So it can take up to a week to actually get the design complete if you have a lot of revisions.
Another thing to keep in mind is content. You need to be able to have everything ready and provide all the content needed in order for their designers to get started.
How Does On-Demand Graphic Design Work?
Most graphic design services listed above offer clients a bespoke design platform. For instance, Penji’s design tool is an all-in-one platform where designers, account managers, customers, and their team members can communicate and collaborate.
Although the steps in working with a graphic design company are similar, we’ll use Penji’s design software to share the step-by-step graphic design process.
1. Log in
Once you’ve selected the subscription plan, log in to your design tool and access your dashboard. Most of these tools are user-friendly with a minimal learning curve and prioritize user experience.
This example of Penji’s dashboard shows a list and thumbnails of ongoing design projects. The menu at the top shows the Active, Completed, Drafted, and On-hold projects.
Submitting a design brief is the first step in the on-demand graphic design process. To submit, click the +New Project button at the upper right side of the dashboard.
2. Fill in the title
Think of a relevant project title that will describe the design accurately. Writing an accurate title will make browsing through ongoing projects easier once you have a long list.
For instance, if you’re creating a company logo, you can write “Logo design” and specify the company or industry beside it if you’re handling multiple brands.
3. Choose from design categories
The next step is to choose from the many design categories. Most unlimited graphic design services have around 100+ design categories. Penji has 120+ design categories. Choose one that fits your project.
4. Write a design brief
This step is crucial when working with on-demand graphic designers, as this will make or break your project outcome. Writing a thorough, clear, and well-thought-out design brief makes it easier for designers to understand exactly what you want.
Penji’s design platform has a few reminders on the left side when writing design briefs. Ensure you follow the tips for a better design outcome.
5. Attach files and images for inspiration
Some customers can’t express themselves clearly through written instructions. You can attach files and images to support your written descriptions with visuals. Attaching sample logos also helps lead designers in the right direction. Attaching your competitors’ logos is also a way to make yours better.
You’ll also need to choose the source file type in this step or let designers pick for you.
6. Choose a brand style guide
Subscribing to unlimited graphic design services means you can request any visuals for multiple brands. Penji’s design tool lets you save and categorize your brand style guides in folders. This way, you only have to choose a branding guideline for designers to follow.
Once you’ve chosen the associated brand, click the Create project button to start the process.
7. Wait 24 to 48 hours
Although most on-demand graphic design services’ turnaround is 24 to 48 hours, some companies may take more than two days.
Wait for the first draft and ask for revisions until you’re 100 percent happy with the design. Download the source file, and you’re good to go!
Why Should You Sign Up for Unlimited Graphic Design Services
Subscribing to unlimited graphic design services is more convenient than hiring freelance designers. Here’s why:
- Work with vetted designers and choose from various skill sets. There is no need to search for another designer fit for a particular project. The company will assign you the most suitable designer.
- No need to worry about additional fees as you only have to pay fixed monthly rates and get unlimited designs. Revisions also come at no extra cost.
- You don’t have to worry about graphic designers going MIA and abandoning crucial projects. Each design project is managed by an account manager who will check if deadlines are met on time.
- Signing up and canceling subscriptions with on-demand graphic design services is easy. You can sign up if you need a stream of designs while setting up shop and cancel anytime without incurring cancellation fees.
- Fast 24 to 48-hour turnaround, which prevents any bottlenecks in your marketing campaigns.
- Request to change assigned designers if you’re unhappy with their work at no additional cost.
- Organize your projects and brand style guides if you request multiple brand designs. The custom design platforms make managing projects efficient and convenient.
Are they worth it?
If you have a lot of design needs, they’re definitely worth it. Being that it’s a monthly recurring investment, you’ll need to make sure that you have the need for an ongoing graphic design service. This graphic design service model is comparable to outsourcing a designer yourself, except much of all the management work is done by the company. The quality of designs and turnaround time also tends to be significantly better when outsourcing a designer yourself.
In today’s fast-paced and competitive business landscape, startups often find themselves navigating a maze of challenges that can hinder their growth and potential.
This is where the concept of a startup incubator comes into play as a guiding light for emerging ventures. A startup incubator is more than just a physical space; it’s a dynamic ecosystem designed to nurture and propel early-stage ventures toward success.
In this article, we’ll tackle some of the most common questions surrounding incubators. For instance – what is the role of a startup incubator? How does it differ from an accelerator?
And most importantly, how can it optimize your business?
Let’s begin!
What is an incubator in a startup ecosystem?
In a startup ecosystem, an incubator refers to a supportive environment or program designed to help early-stage startups grow and develop.
Incubators provide a range of resources and services to entrepreneurs, typically for a fixed period of time, with the goal of nurturing and accelerating the growth of their businesses.
Here’s the usual process of how an incubator supports a startup:
Onboarding
Startups who applied and were accepted are welcomed into the incubator with an orientation session. During this phase, startups get an overview of the program’s structure, expectations, and available resources. They also meet their mentors, advisors, and fellow cohort members.
Mentorship and Guidance
Startups are paired with mentors who have relevant industry experience or expertise.
Regular mentorship sessions provide guidance, feedback, and insights to help startups navigate challenges and refine their strategies.
Workshops and Training
Incubators organize workshops, seminars, and training sessions on various aspects of entrepreneurship. Topics covered during the startup incubator program may include:
- Business planning
- Marketing strategies
- Product development
- Legal and regulatory matters
- Fundraising
Access to Resources
Aside from training sessions, startups can also gain access to resources such as:
- Office space
- Co-working environments
- Internet connectivity
- Meeting rooms
Some incubators provide access to shared equipment, startup software, and other tools needed for product development.
Networking and Events
Incubators often facilitate networking events, pitch sessions, and demo days where startups can showcase their progress to potential investors, partners, and the broader community.
Business Development
Startups work on refining their business models, products, and market strategies. They receive support in identifying their target audience, creating a value proposition, and developing a sustainable revenue model.
Funding and Investment
Incubators may provide introductions to potential investors, venture capitalists, and angel investors Startups also learn about different funding options and how to pitch their ideas to secure investment.
Graduation
Successful completion of the incubator program results in a “graduation” for startups.
Graduated startups may continue to receive support through alumni networks, ongoing mentorship, or access to incubator resources.
Startup Incubator vs. Accelerator
A startup incubator and a startup accelerator are both support programs designed to assist early-stage startups, but they have distinct characteristics and objectives. Here’s a comparison between the two:
- Focus. Incubators typically have a broader focus and cater to startups in various stages of development. They often work with startups that are in the ideation or early development phase. Accelerators, on the other hand, are more specialized and typically work with startups that have a viable product or service and are ready to scale rapidly. They focus on accelerating growth and reaching key milestones quickly.
- Stage. Incubators are well-suited for startups that are still refining their business models, conducting market research, and building their initial product or service. Accelerators, meanwhile, are best suited for startups that have a minimum viable product (MVP) and are seeking to refine their business model, gain traction, and secure funding to scale.
- Mentorship. A startup incubator provides mentorship and guidance, often with a focus on helping founders refine their business ideas, develop prototypes, and validate their concepts. On the other hand, an accelerator’s mentorship is often geared towards specific aspects of growth, such as scaling operations, marketing, fundraising, and product-market fit.
Startup Incubator Examples
If you’re looking for the best startup incubators in the world, here are a few you of the most popular ones to consider.
1. Y Combinator
Situated in the USA, Y Combinator is considered one of the best startup incubators which has played an instrumental role in fostering the growth trajectories of some of the most renowned startups globally. The Y Combinator program spans a duration of three months, during which startups receive a funding injection of $500,000, albeit subject to certain conditions.
Subsequently, founders are immersed in a sequence of mentoring and refinement initiatives that culminate in the prestigious Demo Day. Here, founders showcase their concepts to an audience comprising investors and handpicked media representatives.
Mentees: Airbnb, Dropbox, Coinbase, Gitlab
2. Techstars
Techstars directs its energy toward nurturing startups rooted in technology. Since its inception in 2006, Techstars has been a driving force behind the growth of numerous startups. Annually, they select more than 500 fledgling companies, providing them with up to $120,000 in investment and the invaluable chance to partake in mentorship programs.
Backed by an impressive funding sum of $21.3 billion, Techstars stands out as a reliable choice for technology-oriented startups. Within its portfolio of activities, Techstars hosts several high-profile events and initiatives, including Startup Week and Startup Weekend.
Mentees: Uber, DigitalOcean, SendGrid
3. 500 Startups
500 Startups operates as a dual-purpose platform, functioning as both an accelerator program and a seed fund dedicated to startups. Positioned primarily as a venture capital entity, they proudly proclaim a management portfolio worth $2.7 billion. Their primary interests converge on sectors where technology, innovation, and capital growth converge harmoniously.
Their extensive investment history spans more than 2,600 startups worldwide, underscoring the maturity and comprehensiveness of their accelerator program across diverse markets.
Mentees: Grab, Canva, Credit Karma
Frequently Asked Questions (FAQs)
Do I need an incubator for my startup?
If you’re in the early stages, lack experience, and could benefit from structured guidance, resources, and mentorship, an incubator might be valuable. However, if you’re aiming for rapid growth and have a clear roadmap, an accelerator could be more appropriate.
Do startup incubators provide funding?
Yes, many startup incubators provide funding as part of their support package. However, the funding offered by incubators can vary widely depending on the specific program, location, and the terms of the agreement. Some incubators offer direct funding to startups, while others may connect startups with potential investors or provide resources to help them secure funding elsewhere.
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