The Enigma

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Thursday, May 24, 2007

Quest for Quick buck!

Just register, buy something that you can sell at a higher rate cos its a "collector's item" and earn profits by doing nothing. Is this the business model someone approached you with? This has been the tale of the flag-bearers of 'QuestNet', most of them being software employees high on free time, and low on pay and students willing to make a quick buck!
People approach you with a "presentation" which comprises of an insight into the businesses of Quest, some interesting pictures, including one at the latest Football World Cup. But what it doesn't show you is this.(This is an Interpol 'Wanted' notice about the founder of Quest!)
The presenters will first entice you into it by the term 'Referral Marketing'. This does seem good, at the first thought. For a large nation like India, this is projected as a mega opportunity. But, get ur data structures right and realise that 50% of the nodes in a binary tree are in the leaf level and have no successors, and according to the business plan of Quest, 75% are in the non-profit making zone at any point of time. Given that Indians are conservative about getting friends into business, that too shady ones like this, this is worth a thought.
All this is packed under the garb of Referrral Marketing, which can work wonders in small samples, say an organisation. This can be best used to make people use small items like FMCG products over short period of time. Referral Marketing is a form of Word of Mouth where you not just say it is good, but also handover a sample to use, at a nominal rate. It is easier said than done, of course! Referral marketing scores over Multi Level Marketing on many fronts, for MLM completely ignores the concept of equity, the one in social terms and not the financial terms. More on that, some other time...
Quest Net in India has been a rage in a few cities of late. First, it was left into the market like Amway did. Not the MLM model, but it was penetrated through the working class, those looking for investments in art and businessmen. Probably that hit a stagnation because the referrals were more due to obligations than due to voluntary involvement of the investor. Then, they switched gears and got into the small salaried and no salaried segment who would be interested in big money. The biggest market for this is naturally the Software professionals and the students. Small additions added up to good returns, but only to the those sitting at the top of the tree. Peter Jayaraj has been tracking this since long. His blog gives a detailed account of what it is all about.
The main setback lies in the Pyramid system where the last nodes are always left out in the money-making. It promises huge returns for those at the top, but the chance of being among the top falls exponentially over short periods in time in such scenarios and that seems to have happened here. Though the company claims the market is nascent and has lots of potential, it has its own setbacks with many people waiting for their first penny while those at the top make merry.
All said and done, this is of course a good opportunity for people who want unconvetional and fast ways to make money and to hone their salesmanship at the cost of other's money while they make merry. It is a concept of losing your money first, and then stealing others to make for your losses. So, naturally the first movers get the maximum from the new comers. Personally, I would not recommend this scheme for people who cannot get others money to make for their losses and those who do not want to feast upon while others starve, cos every penny you earn in this scheme comes from at least 6 more below you who are victimised. This is a scheme, as one of the blogs I read puts it, where the victim gets in more victims feigning confidence as a victor!
So beware before you put in your bucks to get into the fast lane. Hard work has no substitute. Believe it, and you will do good. Analyse before investing. Invest your money wisely! Fast lanes are always dangerous, one crash and you are dead!
If you are interested in being a part of it, I know people who can get you into it.
If you are not interested, join my league! All in all, an interesting strategy!

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At May 25, 2007 3:26 PM, Blogger samyak said...

This comment has been removed by the author.

At May 28, 2007 3:32 PM, Blogger Saraswathi said...

oh dats bad that students are falling into the trap of making quick money.

hmmm...good post!

At June 01, 2007 9:04 PM, Blogger Smartalec said...

neat analysis!
u know my teammate n his roomie are way up in this thing and theyre getting cheques of 75k and 1.5 lakhs per week! and are they like involved into it or what:o!

yeah i guess itll get saturated at one point of time but the ppl in the upper nodes r gonna get filthy rich! at the expense of how many ppl being left in the lurch, thay is to be seen...

At September 18, 2007 12:20 AM, Blogger hemanth said...

hi naresh,
thank you man for all the message you given, it will obviously help me out in thinking from now before going into any such MLM or Ref Marktg.

its good article man really u r research is appreciable,

At October 22, 2007 2:00 PM, Blogger madhan said...

Then you keep doing your daily work and make tata's,ambani's,mallya's and brila's richer and richer by working for them.


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