Tuesday, October 02, 2007

Don't waste your life on Quixtar

After considerable deliberation, I posted en email on a mailing list of my alma-mater.  I am reproducing it in the post below:



Friends, Vasavians and countrymen! Lend me not just your ears, but your minds!

This mail is intended more towards people who have recently come to the US or who are about to graduate from college.  I apologize to everyone else who does not care about this issue.

I have noticed a disturbing trend among Vasavians who are coming to the US for pursuing their Master's.  Given my inherent propensity to give advice on matters relating to career choice, I decided to send out this email. My objective is to do two things: 1) forewarn you about some of the actual truths involved in joining such schemes and 2) inform you that there are better ways of achieving success in life.

The trend that I am referring to is individuals joining Multi-level marketing schemes such as those run by Quixtar.  I am using Quixtar as an example as this is the most popular and widely known organization among MLM fans.  I have come across many Vasavi graduates who have fallen prey to the false promises of Quixtar proponents in the US. It seems to be a more widely present problem in students who have just come to the US.  Universities are favorite hunting grounds for Quixtar people and students without funding are more susceptible to their marketing propaganda.

The way the whole Quixtar thing works is that someone in your neighborhood or your grad school invites you to attend some sort of a large meeting where very successful people in the MLM business tell you stories about how they have made millions and how they live in mansions and how they have achieved financial freedom.  The people who give you these invites act as if they are doing you a great favor by showing you the path towards enlightenment.  The largeness of crowds at these events, and the mass hysteria that goes with it is very infectious and is very successful in recruiting new individuals as new IBOs (independent business owners).  As a new recruit you sign up as a IBO (a distributor) whose objective is to sign up more people.  thus, you not only act as a distributor to Quixtar's products but also as a consumer.  As more people signed up by you use Quixtar's products you make money, and you also get rewarded for signing up people. 

However, the catch is that you make more money when you sign up people than when you use Quixtar's products.  thus, the incentive for newcomers is to just try and sign up rather than consume or use the products.  However, the top guys who already have hundreds, perhaps thousands signed up under them stand to gain more.  So the distribution of money coming from Quixtar as incentive is highly skewed towards the top of the pyramid.

Why does all this matter - students who come to the US without funding are being lured into this scheme with promises of quick riches. Fortunately, many are wise to see through the false promises and instead focus on their studies and their career.  Unfortunately, I have lost many of my friends to this scheme - they end up conning themselves into believing that one day they will make millions and retire.  In the process, they have lost all their friends, well wishers and people who wish them well.  Instead, they are surrounded by nepotistic individuals whose attitude can only be best described as self-serving.

There is no quick wealth in Quixtar - you have to probably spend many years before you see reasonable money. even that is questionable from many investigations and websites - there is not enough money to be made by everyone in a MLM scheme. The reason is simple - there are more distributors than consumers. Moreover, Quixtar is being investigated by IRS (tax dept.) and FTC for bad marketing practices in how they sign up new IBO's.  Moreover, as a student on F-1 you are not legally permitted to earn money off campus in the US.

I agree I am not the wisest, but, I do know that success comes with hard work. We are all different from each other - therefore, what motivates me might not motivate others.  I wanted to become a professor, period.  That was my objective.  My objective in life was not solely to achieve financial freedom.  Financial freedom will come automatically, when you figure out what you like and keep doing it well - and I am sure many will agree with me.  Avenues will open up and you will see success come.  It need not come by following some Quixtar guys' formula alone.  Resist the temptation, focus on why you came to the US for.  Do you want to be a contended process engineer at Dow Chemical who loves his/her work or you want to be someone who deceived himself/herself into happiness by deceiving others?  The choice is yours.

Success comes through a focused and disciplined approach to life and being process oriented. In loving what you do and enjoying life as it comes.  Although money is important, it is not the end of everything, particularly, if in achieving it you have lost all your friends and well-wishers.

America revels in its free speech principle. By writing this email, I am not slandering anyone, but merely expressing my opinions on a forum I thought was relevant.  If anyone has objections please feel free to have a dialogue with me.  More importantly, if any of you has been hounded in the past or are bing hounded by Quixtar guys, please feel free to write to me for advice.


Girish Mallapragada

Assistant Professor of Marketing

Kenan-Flagler Business School

The University of North Carolina at Chapel Hill


Ph: 919 962 2149


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