- Passionate Income
- Posts
- Internet Marketing = Pyramid Scheme
Internet Marketing = Pyramid Scheme
Here's how to cheat the system...
1,012 Words | 4 Min 13 Sec Read
Welcome to another issue of Passionate Income.
Today we’ll be discussing why Internet Marketing is a pyramid scheme.
More important, we'll discuss why that's not necessarily a bad thing once you understand how the game is rigged against you (and what you can do to win).
Let’s dive in.
Earlier today I watched a great video on how the Internet Marketing guru sphere is basically one big pyramid scheme.
(Highly recommend you give it a watch if you're involved in the IM space.)
In the video, host Charlie Morgan breaks down how the levels of the guru pyramid work. Here are the levels:
The guru themselves
The guru's clients/customers
That person's clients/customers
The end consumers
This might sound a little abstract, so let's break it down with an example.
Further, given most every 8-figure guru (with the exception of Andrew Tate) leveraged a B2B to achieve their first big win (which is how they became a guru), we'll use an example that starts with B2B.
First, Gary Guru builds a 7-8 figure business helping dentists get patients.
Then he turns around and sells his Patient Attraction system. On the surface, you might think everyone who signs up is a dentist.
But in reality, many of the people who join are aspiring entrepreneurs who want to copy Gary's system. And because of that, Gary attracts not just dentists, but "agency owners" and "consultants" who copy his system and attempt to sell it to other dentists (the ones who haven't joined / don't join Gary's program).
From there, both Gary's clients and the agencies/consultants he's created (as a result of teaching his system) execute on his method for driving patients into dental chairs (which btw is what I envision Hell being like).
And of course, those patients spend money on their dentist visits.
What's critical about this example is understanding the flow of money.
From video mentioned above
Yes, on a superficial level, Gary gets paid by his clients (dentists and agency owners/consultants). But on a deeper level, the real flow of money comes from the patients themselves.
Because without the patients, there's no spark to get money changing hands in the first place.
Sure, Gary might get away with scamming a few people into his course or coaching program without any legitimate proof his system works to help dentists get patients. But with online reviews sites, etc., scammers get found out fast these days.
Instead, for a guru business to work (and hit 7-8 figures), what they're teaching has to be effective in real life.
So what does this have to do with you?
First, understand it's the guru at the top of the pyramid who makes the most money. Not from their main business (that put them on the map as a guru), but by convincing consumers to buy their course / coaching program so they can learn how to do X (with X being the thing the guru already achieved).
From there, it's the client's/customer's responsibility to go out and execute on the gurus' system so they can achieve their own version of success.
Except most people have zero discipline, zero focus, and give up at the first sign of trouble. So of course most people fail.
But even if you succeed, understand you still won't make as much money as the guru. Why?
Because the guru makes the majority of their money from teaching the thing, not from actually doing the thing.
This is common knowledge in the industry.
If continuing to build the business were easier or more profitable than flipping to information marketing, nobody would teach this stuff (given doing so would not benefit them / would harm them given they'd be creating competition for themselves by sharing their secrets).
But because selling the model is so much easier and so much more profitable, people pivot to coaching and courses.
In general, there's nothing unethical about this.
In fact, we do this with our own program: InstaIncome School.
What matters is whether the guru is still in the trenches executing on their system (which we are with the Passionate Income page), or whether they achieve success once and immediately flip to info marketing.*
*In which case they lose touch with what works, which almost always results in their method losing its effectiveness and their students getting poor results.
Point being: If you're going to play the guru game, you need to understand how it works. And not just how it works on the surface (marketing, sales, etc.), but how the entire game is rigged.
In short, the real money in the guru games comes from setting up a multi-layered business where you help people, who then go out and help more people, who then go out and help even more people.
When framed this way, there is nothing "bad" or "unethical" about the info marketing space.
See, coaching and courses are by definition built on the flow of information.
Somebody succeeds with something > They teach people > Some of their students clone, test and tweak the method > They teach people > And so on.
But if the people who first pay for that information never turn around and use it to better their own lives, the entire system breaks.
In fact, as we can see from the example above, having people put your method into practice - and succeed with it - is the best (and only) way to build serious wealth as an information marketer.
What you need to understand, however, is that if you're the one buying the information, you're a pawn in a much bigger puzzle.
Once again, there's nothing wrong with investing in yourself. We at Passionate Income pay for coaching, courses, etc. all the time.
But just understand, being a perpetual consumer of information will never help you achieve wealth. And in most cases, even if you succeed with the method you pay to learn, odds are you'll never achieve the same level of wealth the guru has.
Instead, the real money in the information space comes from a) achieving success doing something other people want to do, b) turning around and teaching that system as your own, and c) having your students achieve so much success they go out and start teaching the system as their own.
Sure, having copycats can lead to cannibalization. Just look at how many people have copied Alex Hormozi's short-form video method, or Iman Gadhzi's SMMA model.
The good news?
By the time you're so big copycats start cannibalizing your business, you'll be so rich it won't matter anymore.
💡 Takeaway: The guru game is rigged against consumers who don't take action and fail to think two steps ahead. But once you understand how the information marketing space really works, you can rig the game in your favor.
🎁 Resources:
What'd you think of today's edition?
Reply back with a rating between 1 and 10 to let us know