Lazy Man and Money

Orrin Woodward’s Scam Debunked Again

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Back when I exposed MonaVie as a scam, there were a couple of individuals at the top that were of note. One of them is Orrin Woodward that was written up in Forbes for running a pyramid within a pyramid. He’s moved on from selling his motivational tools to MonaVie distributors to selling a rebranded version of motivational tools in his own MLM called LIFE. (I noticed this analysis of LIFE and according to a chart there, it looks like 0.35% of the people (Leader and above) make 99% of the average monthly income per person).

Previously, I exposed him for spreading disinformation in one of his blog posts. Recently, a reader brought another blog post of his to my attention.

In the post, Orrin recounts his past as a systems engineer. He pitches himself as a mathematical genius having developed a board game for baseball using probabilities that he wasn’t supposed to learn until halfway through engineering school. As long as we are bragging, I programmed a baseball game in Basic in the 6th grade using the same probabilities. Lesson here: You don’t need an engineering degree to build a baseball game. Most of the statistics for baseball are readily available for all players and it is a matter of simply picking a random number (or dice roll) relative to the player’s performance to simulate what the player is going to do.

Orrin then segues to MLM/pyramid schemes.

He starts off with this statement: “Only 1 out of 100 people actually makes 50k or more per year.” Actually it is closer to 1 in 1000 in just about every MLM. The 1 out of 100 people is usually just the number of people who simply make any money after expenses. Already the statistical genius is off by a factor of 10.

However, it is even worse than that. If you look at the people who make 50K a year, they are the same people at the top, year after year. Sure there may be one or two new ones and some defect to other MLMs, but for the most part the person at the top stays at the top. However, when you look at the lower 99, you see that there is a massive churn rate (as much as 90% in some organizations) as these people realize that they aren’t making money. Over 5 years you can have a case where 4000 people lose money for that one person to retain his 50K income from MLM.

Later in the post, he admits that: “… in my example above… I threw out the hypothetical 50k.” So much for the person really interested in statistics and numbers.

Shockingly it seems to me that Orrin Woodward seems to admit that this is a pyramid scheme.

“However, this doesn’t mean the other 100 people cannot also bring in customers and members who enjoy the life-changing products and do the exact same thing as the person who brought them in. And, when they do, they will have built a team (on average) of 100 people so the 1 out of 100 number remains.

…

Indeed, the model is hard-wired, or designed for a leader to service a community of 100 people in order to reach 15,000 points and thereby achieve the Leader level in LIFE Leadership to make anywhere from 20k to upwards of 50k (with the CAB program included – see the IDS and Comp Plan brochure attached at the bottom of this post). Therefore, the real question a new person should be asking is not the 1 out of 100 snapshot, which merely reports that a Leader must build 100 people communities, but rather, how fast can one build 100 people communities?”

If someone were to describe to you a pyramid scheme they might use a similar explanation… “You bring in 100 people and each of them bring in 100 people… etc.” In fact, the FBI says about pyramid schemes, “At the heart of each pyramid scheme is typically a representation that new participants can recoup their original investments by inducing two or more prospects to make the same investment… Be wary of ‘opportunities’ to invest your money in franchises or investments that require you to bring in subsequent investors to increase your profit or recoup your initial investment.”

Simple mathematics shows that this isn’t sustainable. It’s extraordinarily difficult to bring 100 people in, especially because 90% of people are smart enough to see that it is a pyramid scheme. What makes it even more mathematically impossible is that as you begin to recruit your 100 people, you are creating competitors for yourself. After you’ve recruited 10 people, they are going after that small pool of uninformed people. To make it much, much worse, there are already a bunch of people out there who are actively competing against you before you even start.

Orrin Woodward then goes to make an analogy using a car assembly line:

“At any given moment in time, if a snapshot of the assembly line were taken, the line would have hundreds of unfinished cars frozen in mid-process. From this snapshot, no one in his right mind would argue that only 1 out of 100 cars is ever completed, or that ‘the chances’ of that assembly line making a car would be a mere ‘1 out of 100!’ This would be absurd reasoning since the other cars are still ‘in process’ and will be completed shortly, if the assembly line is given a chance to continue producing cars, as it is designed to do.

In effect, the nature of the assembly line guarantees that only one car will finish per every 100 (in the example above) on the line because this is the way the process was designed. It is hard-wired or hard-built to do it in just this way.”

There are a few big differences that make this a very flawed analogy:

  • A steering wheel on the assembly line doesn’t have to contribute money and doesn’t have bills to pay. That should be the most obvious. You are not a steering wheel and you shouldn’t let Woodward compare you to one.
  • A steering wheel is never going to be a completed car… nor is it going to try to. The MLM opportunity is about pitching to the parts that you can be the car.

In short, inanimate objects don’t have the same requirements and responsibilities as people do. There’s no multi-level aspect to the assembly line analogy that Orrin is pitching. While the assembly line most certainly will complete the car in progress, the multi-level aspect creates many assembly lines that mathematically can never finish their cars because they run out of parts.

We can safely add this to the list of MLM Mind Games: Poor Irrelevant Analogies.

Orrin finishes with the typical flawed motivational push:

“True, not everyone is willing to work that hard, nor will they go that fast, but the leadership of LIFE is committed to creating a process wherein someone can if they are willing to do what it takes. The question for you is: are you ready, willing, and able?”

By now you should realize that mathematically it isn’t about effort. It is similar to telling a golfer that he can hit 10 consecutive holes-in-one if he just practices enough. The circumstances surrounding any conceivable success are so improbable that effort is irrelevant… a non-factor.

It seems to me that Orrin Woodward is running a numbers game here. The idea is to spread this to enough people and hope to hook a percentage of them, who may not be informed or intelligent enough to know better. It would be for the same reason why you may have received an email from a Nigerian Prince offering you riches if you just help him out. These scammers know that a large percentage of people will just ignore the nonsense and go about their day. That small minority of a large enough population who fall for it is very significant. It’s all that is necessary for the few people at the top to make a LOT of money.

Update

A reader pointed out that there’s a thread on the Life Forums about this. Here is a screenshot. It is sad to read all the defrauded sheep responding saying that the business is “based on truth”, when they erroneously claim that corporate America is a pyramid scheme. (It’s not, pyramid schemes rely on endless recruitment and corporations are a hierarchical organization. If only we could de-program these brainwashed people who can’t see the difference.

One person tried to draw an analogy to how the music industry is evolved from vinyl, to cassettes, to CDs, to iTunes and MLM has evolved the same way. It hasn’t. The music industry is still music despite the format. MLM is still MLM despite the presentation of irrelevant analogies.

Orrin Woodward, Scams, MonaVie, Team, and Lies… Oh My!

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I apologize in advance for another post about the evils of some multi-level networking scams. A reader alerted me to this this crazy rant by Orrin Woodward saying, “Looks as if your blogs are getting to Mr. Woodward… I do assume he’s talking about [Lazy Man and Money] and Juice Scam.” After reading the post, I had to agree that it could be directed at me, but it is written generically enough to apply to multiple critics of Team. Needless to say, this particular post has got me more riled up than I’ve been in some time. However, before I get into the post, let me give you a little background on Orrin Woodward and Team.

Orrin Woodward and Team

For those who aren’t familiar with Orrin Woodward, consider yourself quite lucky. He’s the chairman and co-founder of an organization called Team. Team sells leadership “tools”, mostly to distributors involved in the MonaVie scam that I sometimes write about. However, rather than take my words for it, let me quote what Forbes has to say about Team:

Team is one step ahead of all these juice selling schemes. It is a pyramid atop a pyramid. It is selling motivational aids to help MonaVie vendors move the juice. But wait. If you can’t earn back the $258 you’ve spent on the motivational lectures by selling $39 juice bottles, you could earn it back in another way–getting people to buy $258 motivational lectures. If you’re good, you flog the lectures to other people, who sell them to yet others. Everybody gets rich. Everybody, that is, except the last round of buyers. That’s the theory, anyway. The reality is that a mere 1% of Team members make any money from involvement with the firm.

You may have noticed that before the quote, I put “tools” in quotes. Orrin Woodward is quoted in that same as saying, “What I try to give most of all is hope and encouragement.” So he’s selling motivation… motivation to get involved in something that causes people to lose money 99% of the time. Forbes article continues:

Hope is an expensive commodity. Most Team members spend more buying its motivational aids and MonaVie’s juice than they ever take in. Roger Lareau, a Michigan alarm company employee, says his wife has rung up $20,000 in debt buying Team sales tools and Amway products and is now on to selling MonaVie juice. Their marriage has fallen apart as a result. “She still thinks Team is going to set her free one day,” he says.

This is why I get so riled up with MonaVie and organizations like Team. I get a lot of comments from people who share Roger Lareau’s story. It brings debt and destruction to families.

With that out of the way, I’d like to address the crazy rant by Orrin Woodward that I mentioned earlier. I’ll break down the post bit by bit and tell you what Orrin Woodward is really trying to say. (Some of this may overlap the response by Amthrax about Orrin Woodward’s Coercion Through Edification.)

I have spent the last several years studying the scams, schemes, and cons perpetrated on the American masses through the use of coercion. As a Top 10 Leadership Guru, I cannot sit by idly and watch Americans lose their freedoms without speaking up.

The mention of the Top 10 Leadership Guru is laughable. If you look at Orrin’s website, there are at least three random blogs with rankings and in some Orrin ranks Top 30 and in others he is Top 25. The websites aren’t reputable and seem to exist only to publish this list of opinions. If you look at LeadershipGurus.net for example, the criteria “excluded political, military and business leaders and focused on those practitioners who develop and instil leadership in others… We shortlist 60 names then did a Google search for ranking.” So they exclude many natural leaders and then do a Google search (which is biased towards controversial figures like Orrin Woodward) for the ranking. That “Top 10 Leadership Guru” title sure sounds like a lot of bovine excrement. Update: Amthrax breaks down Arthur Carmazzi: The Truth Behind LeadershipGurus.net, Orrin Woodward and Chris Brady. As suspected, the website is a scam and anyone believing it will likely buy a bridge from you.

Next, Orrin Woodward attempts to play the hero by helping protect freedom for Americans. The particular freedom that he wants to protect is the one that causes 99% of people to lose money so that he can stay at the top of his pyramid scheme (Forbes’ words remember). That’s the freedom that put Roger Lareau in $20,000 and potential divorce. So protecting freedom for Americans… more bovine excrement.

No scam can last unless backed by a monopoly of force/coercion.

Looking at Webster’s Dictionary of “scam”, there is nothing tying force or coercion into scam. The definition is, “a fraudulent or deceptive act or operation”, and gives the examples of “1. She was the victim of an insurance scam.” and “2. a sophisticated credit card scam.” Neither of these examples have to do with an element of force.

Government is the only true monopoly of force available in any society. Coercion requires force, which involves either government intervention or mafia type tactics. Free enterprise businesses, like Network Marketing, cannot be a scam, since people are free to come and free to go, they will simply leave and the scam will collapse. Government scams like social security, income taxes, and fiat money inflation, to name just a few, take advantage of the masses, since the masses are forced to participate against their will, whether their needs are being met or not. Learning and defending American freedoms, against the encroachment of coercive government interventions, has become a key educational plank in my readings, writings and speeches of late.

Amthrax said it best here: Coercion Through Edification. “Through tapes, CDs and seminars, he plants up two life possibilities in the mind of TEAM members. 1. If you stick with TEAM and follow its principles, you will succeed. 2. If you don’t do what TEAM does, you will fail in life. How is that not coercion through edification and fear?”

Orrin Woodward doesn’t seem to be aware of the second definition for coerce according to Webster “to compel to an act or choice.” Coercion does NOT require force For example, everyone has probably witnessed an act of coercion through peer-pressure. In such cases, people are coerced, but clearly are not forced.

Thus we note two pieces of bovine excrement here: 1. Scams do require force and 2. Coercion does not require force.

Also of note, he tries to bundle Network Marketing under the umbrella of “free enterprise business” to give it an air of legitimacy. Good one.

I won’t even go into the idiocy behind his comment about income tax being a government scam. Income tax pays for many of the things that make America great. Of course, if he doesn’t want to pay it, he can take himself and his business elsewhere.

Scams coerce participation

If someone attempts a scam, without the power of coercion, it will not last. For example, if someone attempted to sell a property for twice the market rate, perhaps a clueless customer would fall for it, but it couldn’t last as the market will quickly identify the offending party and avoid any business dealing with him…. Many will call Network Marketing a scam, but unless backed by coercion, meaning people are not free to leave, Networking cannot be a scam. Networking has been around for well over sixty years, and scams cannot last that long unless backed by some form of coercion.

This is probably the most important part of Orrin Woodward’s post. Since we established above that coercion does not require force, we can look at what coercive forces play into MLMs in general. I’ve talked to thousands of MLM distributors over time, and almost always they point to the business opportunity or compensation plan… not the product. Those distributors will talk about how much money the people at the top of the pyramid make and they’ll never mention that 99.64% of MonaVie distributors lose money. These are just a couple of ways that people are coerced by the scam to buy a product that is priced above market price. MLM isn’t someone making a transaction on a product or service as Orrin Woodward tries to present it. It is someone trying to buy into a dream that they’ve been promised is within their reach if only they work hard enough… even though it has been mathematically proven time and again that it is untrue.

MonaVie lays a couple of levels on the typical MLM scheme. For one, you have top distributors like Mitch Biggs claiming MonaVie prevents swine flu, which is highly illegal. Claims like these and thousands of others give the impression that MonaVie has medicinal properties. Some of that may be placebo effect and some of it may be dishonest distributors. The bottom line is that people are coerced into believing that its market price should be dictated by the price of medicine and not the price of juice. To borrow from Woodward’s example, it is as if someone told you that the property happened to contain a Fountain of Youth.

Does Orrin Woodward really believe that there is no coercion in MonaVie? Read this actual letter from a MonaVie distributor.

The reason why you’ll never see MonaVie in a store is that no one pays $39 for 25 ounces of juice unless they are coerced/scammed into it. This is especially true because MonaVie lacks nutrition in independent lab tests.

Finally are distributors really free to leave MonaVie? There is a very large PDF of a court case of Xowii suing MonaVie, because Kelly Bangert tried to leave. Xowii claims that Henry Marsh (a MonaVie Executive VP) put an end to that with coercion. Of note are Exhibit A and Exhibit B at the end of the document.

In Networking, some will win, and some will lose, but that simply defines life, not a scam.

The above quote is also true of pyramid schemes which illegal in many countries including the United States. Do we just say, “Let the Bernie Madoffs take our money, that’s life?” I wonder what would happen if I robbed Orrin Woodward’s home and took valuables. Would he say, “some will win, and some will lose, but that simply defines life?” I’m guessing not.

I love my business relationship with Dallin Larsen and MonaVie, and I have friends in many other Networking companies. There are many great companies and leaders in Networking and the more we lift one another, the more the Networking tide rises for all in our profession. I don’t have to attack another enterprise in order to build my own. If you really believe in your Networking business, just build it, allowing your actions to speak louder than your words. Leaders will flock from around the world if you have truly created a better business model. Any business that has been successful over the years, if not the decades, must be serving their customers in order to survive in a true free enterprise model.

This is where I start to think that he’s addressing me. I do attack MonaVie and Team it does build my own enterprise. However, I had established Lazy Man and Money years before I heard about MonaVie. Also, I think that anyone trying to help consumers (as Lazy Man and Money’s mission is), should attack businesses that cause 99% of people to lose their money and provide no value in return.

Amthrax points out: “Orrin certainly did his share of badmouthing after being terminated by Amway a few years back. Of course, you won’t hear any more criticism coming from his mouth, certainly not after signing a confidential agreement with Amway.” In fact, Orrin Woodward tried to whitewash the situation, asking for people to remove all materials relating to the dispute. Woodward offers up another piece of bovine excrement for your enjoyment.

Success isn’t easy, but then again, neither is failure

When people call the entire Network Marketing profession a scam, merely because they didn’t succeed, it demonstrates their lack of understanding of scams and personal responsibility. No one should teach that success in Networking is easy, since it’s not, but failure certainly isn’t easy either. Malcolm Gladwell, a best selling author, teaches that success in any field requires 10,000 hours of diligent study and action. Anything less, and that person is still an amateur in his profession. For someone to try Networking for several years, and then state it’s a scam, is simply a version of Aesop’s fables, sour grapes from an amateur fox who couldn’t reach the desired fruit. For example, in high school, I wrestled in many tournaments. I could not of imagined any wrestler calling the tournament a scam because he didn’t receive a medal. The sour grapes wrestler would have been laughed out of the arena, since many do not win medals, not having at that moment, learned the skills and put in the hours to win at a tournament level.

Is it possible that people are just calling a spade a spade? I call many MLMs scams and I don’t participate in any of them. It’s quite possible that people call it a scam, because of the coercion which disrupts the market value of a product as well as the fact that 99% of people lose money. When someone fails to sell 25 ounce bottles of juice for between $37 and $45 when there are other more nutritious products available for $4 for 46 ounces, it is insane to blame it “lack of personal responsibility.” If I were to open up a store and sell Honda Civics for $200,000 a piece failure is the expectation.

Orrin Woodward doesn’t two other interesting things in the above paragraph. He wants people to stick with Network Marketing even though it clearly doesn’t mathematically work. To him, it is a number’s game. He knows that 0.5% will make some kind of money and 99.5% will not. So he wants to keep that 99.5% buying tools and juice as long as possible. Thus he gives a “Network Marketing isn’t easy” and “success requires 10,000 hours.” If you do the math on 10,000 hours it turns out to be working 8 hours a day for 250 days a year (taking some weekends off) for 5 years. Is that the kind of commitment you want to make to something that fails 99.5% of the time? I don’t know about you, but that sounds crazy.

And as for the Malcolm Gladwell and 10,000 hours claim… maybe Orrin Woodward should pay attention to what he reads more. I reviewed Outliers, the book where Malcolm Gladwell makes the statement. The important part of the chapter was that the examples cited (The Beatles, Bill Joy, and Bill Gates) all had a unique opportunity advantage such as being in the right place at the right time. Gladwell points out that being born around 1955 in Silicon Valley put both the aforementioned Bills in place to be the right age to have youthful exuberance at the time that personal computers were picking up steam. He also says that a similar thing happened during the Industrial Revolution. This unique opportunity is necessary in addition to the 10,000 hours of work. With Network Marketing, you have no unique opportunity advantage.

It is interesting that Woodward brings up the wrestling. I’ve always said that it wouldn’t have mattered how hard I practiced to be the next Michael Jordan (or even just any NBA player), I just lacked the talent and physical make-up. Orrin Woodward would like you to believe that buying his tools will give you the skills that you need to be Michael Jordan, but it is like buying Nike Air shoes and going to basketball camp. The NBA can only have so many basketball players in it just as MLMs are mathematically set up to only allow a few people to succeed. The system is against you. The wise thing would be to recognize that failure has nothing to do with your work ethic.

Anonymous Victims Online

In today’s society, people can write anonymously about his victimization, crying about his lack of results, claiming to be scammed from the Networkers (better wrestlers) who kicked their butts in free enterprise, while claiming it was rigged against them, even though others seemed to win while they were whining. If someone felt they were hurt, why not seek out the leaders of the company or community for resolution? Doesn’t this sounds like the right thing, not to mention the honorable thing to do? Rather than post anonymously, hiding their identities as well as their real motives, assaulting the reputations of people that they don’t personally know, why not call the community leaders or the company to get the issue resolved? Any reputable company would serve the customer in a heartbeat.

Here is where I think that Orrin Woodward is addressing my Juice Scam website. I believe this because if you search Google for “MonaVie Team” you get an anonymous post about someone’s experience with Team MonaVie. More and more people are writing about their bad experiences Team nowadays. Here is an Ex-MonaVie & TEAM distributor explaining his metamorphosis, though he’s not anonymous. If he’s wondering why I’m anonymous, it’s because I’ve been anonymous long before I heard about MonaVie. Even if I wasn’t anonymous it can be a wise idea to be anonymous when speaking out against MLMs… sometimes a MonaVie distributor will threaten to kill you.

I’ve always left the door open for MonaVie to discuss things in an open forum. They have refused my requests. Perhaps Orrin Woodward and Team would be more willing. I really haven’t been as concerned with them, since I focus more on MonaVie. Orrin’s solution of calling the company or community leaders doesn’t work as it doesn’t lead to public debate, which is sorely needed.

If anyone leaves the TEAM unhappy, it wasn’t through lack of concern, but through lack of interest by the customer to address.

I’ve heard numerous cases where this is the complete opposite of the truth. People bring their concerns to their upline and the upline tells them not to worry and tries to sell them another tool to motivate them more.

Perhaps, the real reason that many post in Networking are anonymous, postings that act as if they are upset at the company, are because they are from competitors, not real customers. These are the bottom feeders of Networking, the parasite marketers, who, believing in a win-lose scarcity mentality, blatantly attack one company’s reputation for the alleged benefits supplied to their current company. Sadly, this egregious behavior happens often, leading to much of the negative written online. When the perceived opportunity for gain exceeds the applied character of those involved, parasite marketing will typically occur.

Free to Win & Free to Lose

In America, one is free to win, free to lose, and, even free to blame. But unless one is forced against his will, a force that’s necessary for any real scam, one will look silly to blame his loss on anything but his own incompetence. It’s foolish to blame others, who worked harder, applied themselves more, and developed the skills to win. Calling winners names, calling the tournament (profession) a scam, pointing fingers at others, all in an effort to salve a wounded pride. This may take the focus off off his lack of skills temporarily, but it reveals more about the character of the sender of the toxic message than the receiver’s character. It seems that ‘passing the buck’ is endemic in today’s society, but one of the goals of the Networking is to teach people personal responsibility. Accepting responsibility is the beginning of all leadership growth. In Networking, unless the person was forced to attend meetings against his will, forced to buy materials without a buy back provision, why is he passing judgment on others for his lack of results? The minute you blame others for your failures is the minute you surrender responsibility for your own life.

Once again, Orrin uses the erroneous definition of coercing to try to make it sound it can’t be scam. Once again, scams have nothing to do with required force.

It has been mathematically proven time and again that more than 99% of people lose their money. You can read this math of MonaVie’s own Income Disclosure Statement. Or you can watch Brian Dunning on Network Marketing. Instead of owning up to that basic math that applies not only to MonaVie, but Network Marketing in general, Orrin tries to pass the buck on the person. You failed at your goal of being an NFL quarterback, then it is your fault. It has nothing to do with the fact that success in the “tournament (profession)” is stacked against you and can only happen for a few people. Orrin’s bovine excrement reveals more of his character.

In the Team, we teach that freedom is a gift and we support your freedom to win, lose or leave, voting with your own feet. The tens of thousands who are part of TEAM, were not coerced into joining, but joined freely by buying into the leadership culture. The TEAM leaders win by serving customers, not controlling them, even offering a 30 day, no questions asked, 100% return policy for any items purchased. No business would be foolish enough to publicly state that, unless they knew that 99.99% plus of their customers were happily served. All reputable Networking companies in our profession offer similar refund policies.

If you look into the study of cults, you can see that MonaVie and Network Marketing in general exhibits cult behavior. Here’s checklist of cult behavior of which many apply to MonaVie and Network Marketing in general. One particular I’d like to point out is the suppression of information. MonaVie threatened legal action to get me to take down my sites twice. Someone associated with MonaVie tried to blackmail me into taking down the information on MonaVie. The popular website where distributors were able to free comment, Purple Horror, was scrubbed clean and turned into a pro-MonaVie website. Feel free to look at the old version and compare it against the current one.

Of course, using mind control techniques and cult behavior most certainly counts as coercing. Those people who “joined freely” were often not presented the correct information.

The 30-day money back guarantee is something that almost every company offers. Even male enhancement pills that are also shown not to work have such guarantees. They are any number of people who realize that they wasted their money, but the 30-days had long passed.

Orrin goes to list a couple of videos of the top successful people to further try to convince people that it is the norm, not the exception. It is essentially showing videos of lottery winners and saying, “See we won the lottery, you can too!”

Since this post is already too long, I’m not going to post a conclusion. I’ll leave you to draw your own.

Update: When I told my good friend at The Soap Boxers about the post, he made two great points:

  • “if there’s coercion (particularly physical), it’s really not even a scam – it’s extortion.”
  • Paraphrased, “In response to Woodward’s assertion of ‘If someone attempts a scam, without the power of coercion, it will not last’… That’s the cornerstone of his argument, and it is faulty. There have been a lot of long lasting scams over the years – Madoff and Ponzi, for example. The power of greed can be pretty effective.”