from Hacker News

How to Run a Ponzi Scheme for Tech People

by nish1500 on 11/29/20, 10:10 PM with 250 comments

• by dvt on 11/29/20, 11:06 PM

  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.

• by marcus_holmes on 11/29/20, 11:06 PM

  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.

• by dx87 on 11/29/20, 11:25 PM

  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.

• by ZephyrBlu on 11/30/20, 2:19 AM

  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).

• by renewiltord on 11/30/20, 12:06 AM

  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.

• by throwaway0a5e on 11/30/20, 4:20 AM

  >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".

• by solresol on 11/30/20, 5:41 AM

  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...

• by 04148565 on 11/30/20, 12:32 AM

  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.

  1: https://gumroad.com/l/aws-good-parts

• by giantg2 on 11/30/20, 12:28 AM

  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).

• by m3nu on 11/29/20, 11:15 PM

  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.

• by DVassallo on 11/30/20, 3:18 AM

  I'm cited in the comments as an instance of this scheme [1].

  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

• by aerovistae on 11/29/20, 11:02 PM

  What a fantastic blog post. It's nice to occasionally see someone calling out all the bullshit.

• by maeln on 11/30/20, 8:56 AM

  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.

• by jasonkester on 11/30/20, 7:07 AM

  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.

• by cranium on 11/30/20, 7:43 AM

  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.

• by ggm on 11/29/20, 11:52 PM

  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")

• by 29athrowaway on 11/29/20, 11:08 PM

  Many blog posts pontificating some advice read like:

  "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.

• by psanford on 11/29/20, 11:03 PM

  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.

• by tauwauwau on 11/30/20, 12:40 AM

  Kurosagi, a Manga about a black (Kuro) swindler (Sagi) swindling other Swindlers. It has covers a lot of schemes.

  https://mangakakalot.com/read-iw9hn158504903371

• by noobermin on 11/30/20, 4:33 AM

  It's kind of weird to read this meta sarcastic article yet see that their journal is full of...articles of the type they critique...?

• by paxys on 11/30/20, 3:19 AM

  The only people who made money during the gold rush were the ones selling pickaxes and shovels.

• by brauhaus on 11/30/20, 5:20 PM

  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.

• by ForHackernews on 11/29/20, 11:26 PM

  This is a pretty good checklist, but it really needs more blockchainz.

• by l1am0 on 11/30/20, 12:52 PM

  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.

• by Simulacra on 11/29/20, 10:57 PM

  I think some would call the various vaporware concepts out there a ponzi scheme for tech people.

• by heintzsight on 12/4/20, 2:07 PM

  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.

• by fxtentacle on 11/29/20, 11:08 PM

  Brilliant :) And don't forget to look at the signup link for the "How to Run a Ponzi Scheme" Master course.

  That said, don't all the cool kids call it "Mastermind" these days?

• by nickhodge on 11/30/20, 1:01 AM

  Easier.

  Step 1. Invent Bitcoin.

• by asimjalis on 11/29/20, 11:56 PM

  I love this. For v2 you need to add a crypto angle.

• by louwrentius on 11/30/20, 1:08 AM

  I expected an article about Bitcoin or any other cryptocurrency but I was disappointed in that regard.

  Cool article though.

• by bleepblorp on 11/30/20, 1:05 AM

  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.

• by spamizbad on 11/30/20, 12:24 AM

  This is pure hustle. Love it.

• by blackd0g on 11/30/20, 8:44 PM

  This probably made me laugh more than it should. Good job.

• by monkzero on 11/30/20, 2:02 PM

  One of the best articles I read on hacker news

• by woahAcademia on 11/29/20, 11:23 PM

  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.