This article is fantastic. I think "get rich quick" schemes are so much worse when it comes to my generation and beyond (millennials/gen-z). People have been endlessly screwed over: graduated college during the 2008 economic bust, lived with parents until their 30s, fired/laid off during the 2020 pandemic -- so I fundamentally understand the mirage of Instagram fame and endless sacks of money for doing basically nothing of value. For a classic example, just look at /r/wallstreetbets -- young people are frustrated because there's no end to this tunnel.
It also makes things harder for those of us that don't want to run Ponzi schemes: How does one break out when everyone's taking glamorous selfies in Thailand but I'm working in a dingy apartment trying to build the next big app?
It's a tough situation on all sides with no obvious solutions.
>How does one break out when everyone's taking glamorous selfies in Thailand but I'm working in a dingy apartment trying to build the next big app?
Isn't the idea of building the "next big app" itself based on the same kind of get-rich-quick mindset those schemes are exploiting?
Only except for the "nomad lifestyle" or "selling courses", etc, it's supposed to happen by coding in a dingy apartment. But it's equally unlikely, and too starry-eyed, the tech nerd version of the kind of dream the stereotypical bus-arriving Midwestern teenagers had of "becoming famous in Los Angeles".
How about merely building a business? Think small indie developer or Basecamp at best, vs Facebook and Amazon.
/r/wallstreetbets exists for a different reason, but it got exacerbated by everything you mentioned above.
WSB members have come to realize that so-called "financial professionals" by and large have no scrying crystal into the market. WSB got there because of the democratization of knowledge that the Internet has caused.
And before you cite some unicorn like Renaissance, that's generating 40% YOY for 20+ years, keep in mind that unicorns, while rare, do exist. Microsoft, Uber, Google, Apple, etc., so forth. How many "investment professionals" would have recommended you dump all your money into these companies when they were but fledging entities? Or even when they went through tough times?
No, I think WSB is doing a service to humanity. They're exposing the smoke and mirrors behind Wall Street.
People want to believe in get-rick-quick schemes, and will go by the flimsiest evidence they can find.
I think the trick is to realize those glamorous selfies are mostly a mirage. If you were having the best day of your life on the beach, maybe, just maybe, you wouldn't be on your phone trying to get the perfect selfie.
> For a classic example, just look at /r/wallstreetbets -- young people are frustrated because there's no end to this tunnel
That's a bad example. By many measures retail investors have outperformed institutional investors since March. The simple reason is that options have a built in exit strategy, the thing that's missing when most people lose in scams - including Ponzi schemes!
On the flip side, why then do they outperform? High risk, high reward. Opportunities where you lose your entire principle, like out of the money options, turned out to be wildly underpriced, simply because institutions never buy them.
Anyway, I get it, those people are stupid. But they made money.
Don't try build the next big app? If you're frustrated by the status quo, reject it and live life by your own values. Also nothing (bar the pandemic) is stopping you going to Thailand or another cheap location and building your app from there. The flight tickets will pay themselves off in cost of living savings pretty quickly.
I thought the point of those nomadic lifestyles is to earn the same trifling money anyone can earn over the internet with a little effort, but live where the money goes farther.
Seen so much of this bullshit while travelling around SE Asia. I swear 90% of nomads are dropshipping/life coaches running ponzi schemes, and the other 10% are geeks like me who lucked into remote-friendly coding gigs.
Sprinkled with some truly fascinating folks who genuinely discovered some new and interesting way of making this work for them.
I'd say 95% of digital nomads are just online marketers who market their own lifestyle so that they can sell a course on how to imitate them. And obviously, their customers will imitate them and sell a course on how to imitate them. And so the cycle continues.
Yeah, my running joke while living in Thailand was that it was a circular pyramid scheme, the yoga teachers are buying life coaching, the life coaches are all learning to become drop shippers, and the drop shippers are all getting training to become yoga teachers. They just buy and sell services from each other in a circle trying to grow their own thing until they give up and go home.
The "nomad" posts always bugged me, especially when it's someone traveling around the world by working odd jobs and relying on the kindness of strangers. They're always presented in a way to make you feel bad about having a steady 9-5 working for "the man" when you could be seeing the world and being free. They conveniently leave out the fact that their lifestyle is completely dependent on the majority of people working steady jobs, and if everyone was a nomad like them, they'd have no picturesque villages to visit, roads to hitchhike on, or restaurants willing to give you food in exchange for washing some dishes.
Isn't this true of any job - If the world was all software engineers it'd be missing lots of stuff too. I get the point you're making about nomads being (more) dependent on others, but I honestly think that's true for everyone now.
I would argue that the ponzi scheme is much broader than what is described here.
1) Try to start an online business. It doesn't really matter what you're doing or if it succeeds as long as it's marketable to people aspiring to create an online business
2) Make a big fuss about the launch on all social platforms (Twitter, HN, PH, IH, your blog, etc) and hope someone with a big audience signal boosts you or you get lucky
3a) If you start making money, awesome! Constantly post revenue numbers, things about Building in Public (TM) and "you can do it too!". Your audience (And therefore revenue) will compound exponentially
3b) If you 'fail', make a blog post retrospective called "Lessons Learned" and blast that out everywhere as well
4) Repeat steps 1-3 until you hit 3a. Throw in a few "6 Months of Building in Public" type posts if you're really having trouble
In reality, I strongly believe that very few people end up making it through this type of process and success mostly comes down to luck or connections (Anyone who already has an audience can easily pull you up).
How is that a Ponzi Scheme? Self-promoting and narrative-building to make it sound easy, but if you’re building something that someone will pay you money for, you’re literally just building a business...?
This is what people think is a ponzi scheme for tech people. In fact it's actually a Ponzi scheme for all the same suspects as last time. i.e. the same guy who gets into Amway or the pyramid marketing schemes falls into this.
Tech people don't fall into these Ponzi schemes. They fall into a different variety where a serial entrepreneur who has repeatedly received funding is assumed to be more capable than a guy new to the game.
>Won’t people call me out when they buy my course and fail to become rich?
This should gets it's own article. So many products and services totally unremarkable but survive simply because they've managed to peddle a brand image whereby it is fashionable to talk them up and unfashionable to say "I blew a bunch of money on them and the results were crap".
Isn't there a bigger Ponzi scheme in tech? The one where you sell a product at a screaming loss, double your revenue each year (without ever showing a profit), and then each year raise capital at double the previous year's valuation to fund the ever-growing loss-making sales. It's just the suckers in that scheme are the investors...
This is what I thought the article would be about: You get to be startup-rich not by convincing people to buy your product, but by convincing investors that people will buy your product. That's a much different sell, and you can ride it multiple times for a long time, getting rich without ever making a sustainable product. Your product, essentially, was selling hope (later turned to regret) to investors.
Legit question: is [1] an instance of this kind of scheme? The guy came out of nowhere boasting how he left his $500K job at amazon and whatnot (first red flag for me) and I've seen his content popup pretty often.
I know Daniel, his work is not a ponzi scheme. Because you asked this question in good faith, I'll give you a summary in good faith:
1. The book you linked is just technical content. It teaches you how to use AWS, not how to sell books about using AWS.
2. Unlike the tongue-in-cheek examples of the original post based on minimal success, this book is written based on years of professional experience as a developer building AWS.
3. His content pops up pretty often because people like it.
Of course, if the book was part of a ponzi scheme, then part of that scheme would be having people like me defend it on HN :)
100% is - see a comment I made in this thread further down. From what I can tell, this is the guy that doesn’t seem to have any substance short of talking platitudes on Twitter about life philosophy, how he quit his cushy job, and how we all need to pursue our dreams. Oh, and buy his book and Twitter audience growth course.
I would not think about what this post is saying in literal terms.
I'm pretty sure Daniel has good intentions, though he has most definitely benefitted from this type of 'scheme' given that a lot of his brand revolves around the lifestyle he has managed to create for himself due to the success of his info products.
I thought this was going to be an article about working at a tech company. How they sell you the idea of a career of fulfilling and noble work. Then the people at the top (who got in early) make all the money on the fruits of your labor. All while you can't get a promotion even though you're doing the job above you (no future).
I found that the road to success is very different for everyone and for all circumstances. It can't be taught because everyone has different skills and is in a different situation. Only very general tools can be taught.
Even if person X is successful and writes down every step, it will be very hard for anyone to repeat it.
I don't know if it is the same for everyone, but here in France, YouTube advertisement have been just that since the coronavirus began.
Almost all advertisement is young people posing with expensive car (probably rented) trying to sell you their seminar/conference. It has become so shameless that they even try to sell course on "how to dropship properly". Its scamming all the way down.
I find the one trying to sell dropshipping course very funny because it is really scammer trying to scam other scammer.
While there are indeed lots of people doing this sort of thing, I notice people being accused of it who are in fact successful and are giving out actionable advice. (They're easy to spot if you look, because they don't ask you to buy their course).
Imagine, for example, that you had stumbled across a Magic Formula to create a niche Software as a Service business that brings in $5,000/month while only taking up 10 hours of your time each week. Why would you give that formula away when you could just use it yourself over and over and become a zillionaire?
Well, let's think about it. Assuming you do have that Magic Formula and have used it once, what are your options?
1. Go live on the beach in Thailand. Forever.
2. Build another business that brings in $5,000/month for 10hrs/week effort.
Notice that each spin of the Magic Formula cuts another 10 hours/week out of your schedule of growing your hair and hanging out with that blonde girl from the article. Spin it 4 times and you're back to having a full time job like the rest of the world.
So you don't do that. You hang out on the beach, wondering why more people don't do what you're doing. And you from time to time try to nudge a few more people into doing so themselves.
At least that's my take on it, having spun that formula twice.
If you want to eyewitness an even tighter Ponzi scheme loop, look at YouTubers in the trading industry. Boats of them sell a course/book and use YouTube for marketing & ad money. Bonus points if they advertise beating the market.
My college roommate followed this one guy and even bought his courses. He claimed he's made double his money since paying for his "insider trading tips" or whatever. My roommate claimed he was a self made millionaire.
I looked the guy up, he's just a college dropout whose parents owned a very successful real estate agency to which he was placed in. He then got absurd amounts of capital from the commissions only people like his parents could get.
My roommate believed this guy knew the ticket to wealth but all I saw was basically the xkcd comic of "but lottery tickets! It works!"
The denouement is You didn’t read anything, did you? No, you will actually get 500 new followers, and actually make $5,000. The ones who won’t are the suckers who buy your course.
Sucker being the operative word.
(also, its satire, the real denouement is his last guidance: "make things of value, don't seek money, seek problems of high value to solve")
This reminds me of a killer new startup I'm thinking of investing in. They sold me on it as soon as I heard their elevator pitch: International Stamp Arbitrage.
My hypothesis is that all the Tech People turned into Ponzi schemes (er, sorry, info products) after trying showing their tech products here on HN and getting roasted in the comments.
I think this one of the best content marketing posts I have seen in a long time. Funny and the call to action in the end is so subtile :D The fake sign up form is build with https://formcrafts.com/ the product Nishant is working on.
I almost feel bad for this guy. I believe he deserves everything he's got coming his way, good or bad. It's a repulsive and idiotic article written by someone who is naive, arrogant and presumptive on life and how to make it in the world.
I do admire the hustle and ingenuity, but what is ambition but a form of love and hope? The entire article had a meticulously cynical view on business and his customers. I think the idea of responsibility is shocking to the author, who obviously has never experienced something meaningful. He's a fraud and he knows it.
Humans find meaning by helping other humans. The article is perverse and I really wish the author go back to wherever trash hole he came from. The western world does not need this kind of parasitic thinking.
Back then when bitcoin is still in its infancy, there is not much to do with bitcoin in your wallet apart from gifting each other some coins (bitcoin faucet was pretty generous back then). So people on bitcointalk forum often openly running some ponzi scheme and a lot of people would join just for the heck of it. There was nothing shady about it as the organizer would openly admit its a ponzi scheme (something along "hey, I'm running a new ponzi scheme here. If you're interested here is the url").
TBH I knew when I bought BTC at ~$10 that tech people were the first adopters and if it broke out from the tech crowd it would be like being near the top of the pyramid. It's precisely why I bought.
Cryptocurrency is the ponzi scheme for tech people.
Because the cryptocurrency ecosystem does not do investment -- likely in very large part because no one can buy anything legal with cryptocurrency -- returns for coiners who cash out must, by definition, come from later investments.
Paying earlier investors with the investments of those who follow is the definition of a ponzi scheme.
I think one of the biggest issues is that tech people are "know it alls".
They make lots of money, they must be smart right? So when a friend disagrees the person doesn't consider it.
And unlike their Engineering counterparts they won't search for proof. If you need to see real world examples, look at who buys brand name. It's telling.
Tech people are pretty smart, on average. It's a somewhat demanding professional career. There's a hell of a lot of difference between "smart" and "infallible".
dvt|5 years ago
It also makes things harder for those of us that don't want to run Ponzi schemes: How does one break out when everyone's taking glamorous selfies in Thailand but I'm working in a dingy apartment trying to build the next big app?
It's a tough situation on all sides with no obvious solutions.
coldtea|5 years ago
Isn't the idea of building the "next big app" itself based on the same kind of get-rich-quick mindset those schemes are exploiting?
Only except for the "nomad lifestyle" or "selling courses", etc, it's supposed to happen by coding in a dingy apartment. But it's equally unlikely, and too starry-eyed, the tech nerd version of the kind of dream the stereotypical bus-arriving Midwestern teenagers had of "becoming famous in Los Angeles".
How about merely building a business? Think small indie developer or Basecamp at best, vs Facebook and Amazon.
cbozeman|5 years ago
WSB members have come to realize that so-called "financial professionals" by and large have no scrying crystal into the market. WSB got there because of the democratization of knowledge that the Internet has caused.
And before you cite some unicorn like Renaissance, that's generating 40% YOY for 20+ years, keep in mind that unicorns, while rare, do exist. Microsoft, Uber, Google, Apple, etc., so forth. How many "investment professionals" would have recommended you dump all your money into these companies when they were but fledging entities? Or even when they went through tough times?
No, I think WSB is doing a service to humanity. They're exposing the smoke and mirrors behind Wall Street.
Good on them.
nish1500|5 years ago
I think the trick is to realize those glamorous selfies are mostly a mirage. If you were having the best day of your life on the beach, maybe, just maybe, you wouldn't be on your phone trying to get the perfect selfie.
an_opabinia|5 years ago
That's a bad example. By many measures retail investors have outperformed institutional investors since March. The simple reason is that options have a built in exit strategy, the thing that's missing when most people lose in scams - including Ponzi schemes!
On the flip side, why then do they outperform? High risk, high reward. Opportunities where you lose your entire principle, like out of the money options, turned out to be wildly underpriced, simply because institutions never buy them.
Anyway, I get it, those people are stupid. But they made money.
rorykoehler|5 years ago
unishark|5 years ago
unknown|5 years ago
[deleted]
the_gipsy|5 years ago
jariel|5 years ago
[deleted]
marcus_holmes|5 years ago
Sprinkled with some truly fascinating folks who genuinely discovered some new and interesting way of making this work for them.
fxtentacle|5 years ago
anm89|5 years ago
mssundaram|5 years ago
kilroy123|5 years ago
dx87|5 years ago
slow_donkey|5 years ago
esoterica|5 years ago
ZephyrBlu|5 years ago
1) Try to start an online business. It doesn't really matter what you're doing or if it succeeds as long as it's marketable to people aspiring to create an online business
2) Make a big fuss about the launch on all social platforms (Twitter, HN, PH, IH, your blog, etc) and hope someone with a big audience signal boosts you or you get lucky
3a) If you start making money, awesome! Constantly post revenue numbers, things about Building in Public (TM) and "you can do it too!". Your audience (And therefore revenue) will compound exponentially
3b) If you 'fail', make a blog post retrospective called "Lessons Learned" and blast that out everywhere as well
4) Repeat steps 1-3 until you hit 3a. Throw in a few "6 Months of Building in Public" type posts if you're really having trouble
In reality, I strongly believe that very few people end up making it through this type of process and success mostly comes down to luck or connections (Anyone who already has an audience can easily pull you up).
herval|5 years ago
renewiltord|5 years ago
Tech people don't fall into these Ponzi schemes. They fall into a different variety where a serial entrepreneur who has repeatedly received funding is assumed to be more capable than a guy new to the game.
ZephyrBlu|5 years ago
The VC dream is for an entirely different segment of tech people than those wanting to be indie hackers.
throwaway0a5e|5 years ago
This should gets it's own article. So many products and services totally unremarkable but survive simply because they've managed to peddle a brand image whereby it is fashionable to talk them up and unfashionable to say "I blew a bunch of money on them and the results were crap".
solresol|5 years ago
justnotworthit|5 years ago
04148565|5 years ago
1: https://gumroad.com/l/aws-good-parts
philipkiely|5 years ago
1. The book you linked is just technical content. It teaches you how to use AWS, not how to sell books about using AWS.
2. Unlike the tongue-in-cheek examples of the original post based on minimal success, this book is written based on years of professional experience as a developer building AWS.
3. His content pops up pretty often because people like it.
Of course, if the book was part of a ponzi scheme, then part of that scheme would be having people like me defend it on HN :)
koluna|5 years ago
moltar|5 years ago
IMO he’s legit, not a scheme
ZephyrBlu|5 years ago
I'm pretty sure Daniel has good intentions, though he has most definitely benefitted from this type of 'scheme' given that a lot of his brand revolves around the lifestyle he has managed to create for himself due to the success of his info products.
giantg2|5 years ago
m3nu|5 years ago
Even if person X is successful and writes down every step, it will be very hard for anyone to repeat it.
DVassallo|5 years ago
If you want to see how I make it all work, check out my interview on Indie Hackers: https://www.indiehackers.com/podcast/177-daniel-vassallo
[1] https://news.ycombinator.com/item?id=25249523
aerovistae|5 years ago
maeln|5 years ago
jasonkester|5 years ago
Imagine, for example, that you had stumbled across a Magic Formula to create a niche Software as a Service business that brings in $5,000/month while only taking up 10 hours of your time each week. Why would you give that formula away when you could just use it yourself over and over and become a zillionaire?
Well, let's think about it. Assuming you do have that Magic Formula and have used it once, what are your options?
1. Go live on the beach in Thailand. Forever.
2. Build another business that brings in $5,000/month for 10hrs/week effort.
Notice that each spin of the Magic Formula cuts another 10 hours/week out of your schedule of growing your hair and hanging out with that blonde girl from the article. Spin it 4 times and you're back to having a full time job like the rest of the world.
So you don't do that. You hang out on the beach, wondering why more people don't do what you're doing. And you from time to time try to nudge a few more people into doing so themselves.
At least that's my take on it, having spun that formula twice.
rorykoehler|5 years ago
cranium|5 years ago
MeinBlutIstBlau|5 years ago
I looked the guy up, he's just a college dropout whose parents owned a very successful real estate agency to which he was placed in. He then got absurd amounts of capital from the commissions only people like his parents could get.
My roommate believed this guy knew the ticket to wealth but all I saw was basically the xkcd comic of "but lottery tickets! It works!"
ggm|5 years ago
Sucker being the operative word.
(also, its satire, the real denouement is his last guidance: "make things of value, don't seek money, seek problems of high value to solve")
29athrowaway|5 years ago
"How to double your money gambling everything on a coin toss"
Sure, you can win a coin toss, but unless you can reproduce that experiment consistently it's not a viable advice.
And that pretty much to everything... if a process is not better than random chance then it's worthless.
mch82|5 years ago
Nice distillation of what many might dismiss as common sense.
psanford|5 years ago
tauwauwau|5 years ago
https://mangakakalot.com/read-iw9hn158504903371
noobermin|5 years ago
paxys|5 years ago
brauhaus|5 years ago
ForHackernews|5 years ago
ladyanita22|5 years ago
l1am0|5 years ago
Simulacra|5 years ago
heintzsight|5 years ago
I do admire the hustle and ingenuity, but what is ambition but a form of love and hope? The entire article had a meticulously cynical view on business and his customers. I think the idea of responsibility is shocking to the author, who obviously has never experienced something meaningful. He's a fraud and he knows it.
Humans find meaning by helping other humans. The article is perverse and I really wish the author go back to wherever trash hole he came from. The western world does not need this kind of parasitic thinking.
namdnay|5 years ago
fxtentacle|5 years ago
That said, don't all the cool kids call it "Mastermind" these days?
nickhodge|5 years ago
Step 1. Invent Bitcoin.
neurostimulant|5 years ago
asimjalis|5 years ago
louwrentius|5 years ago
Cool article though.
conductr|5 years ago
bleepblorp|5 years ago
Because the cryptocurrency ecosystem does not do investment -- likely in very large part because no one can buy anything legal with cryptocurrency -- returns for coiners who cash out must, by definition, come from later investments.
Paying earlier investors with the investments of those who follow is the definition of a ponzi scheme.
spamizbad|5 years ago
blackd0g|5 years ago
monkzero|5 years ago
woahAcademia|5 years ago
They make lots of money, they must be smart right? So when a friend disagrees the person doesn't consider it.
And unlike their Engineering counterparts they won't search for proof. If you need to see real world examples, look at who buys brand name. It's telling.
strken|5 years ago
escape_goat|5 years ago
christiansakai|5 years ago
[deleted]
jingjingbing|5 years ago
[deleted]