A Plague of Gurus: How the Internet Was Flooded With Fake Success

There are thousands of promises for sale online, and most of them are empty. They’re sold by a cohort of self-proclaimed mentors, coaches and gurus all promising health, wealth and happiness but whose expensive courses prove to be little more than trite, recycled advice. How the hell did we get here?

Do you want to make ten thousand dollars a month using nothing but your laptop? Chances are you can’t. Sorry! But that won’t stop thousands of online gurus trying to sell you on the idea that it’s easy. All you need to do is join their free training, take their course (always priced at $197 for some reason) and, if you put in the work, success can be yours. But can it? And why are there so many of them, all making the same claims, all using the same sales tactics, and all charging the same prices?

If you’ve spent any time online in the last decade, you’ve almost certainly encountered them. Like a Broadway musical, it feels like they’ve all burst into song at the same time. With identical lyrics, choreography and costumes, a handful of starring leads shine in the spotlight but, just a few paces behind them, a chorus of thousands belt out their deafening refrain. Their adverts are filled with the signals of their success: private jets, fast cars, extravagant mansions and, for good measure, the occasional stack of cash. The basic pitch is always the same: they’ve found the secret to success and are willing to share it with you! It could be dropshipping, affiliate marketing, coaching, consulting, forex trading, social media marketing, property flipping, high ticket sales or even just a good old positive mindset. It almost doesn’t matter, though, because this is not what’s really on offer. What they’re really offering you is the promise of becoming a millionaire. The promise of success. The promise of a Lamborghini in your garage.

In their wake, these gurus have left a trail of disappointment. In January 2019, The Atlantic ran a story about so-called ‘Fulfilled by Amazon’ experts cashing in on courses they sold to unhappy punters. Later in 2019, the New York Times published an article about BallerBusters, an Instagram account devoted to uncovering the shady tactics of gurus at work on the platform. Later still, in May 2020, Wired covered the dropshipping trend or, more specifically, the trend of people selling courses about dropshipping. Most recently, the first episode of Netflix’s Money, Explained details the history of ‘get rich quick’ schemes, one flavour of which being the ‘coaching scheme’.

I’ve long been obsessed with gurus. I sometimes find it impossible to tear my eyes away from watching them. But spend enough time doing this and the questions begin bubbling to the surface. The most important question of all: if they’re already such successful millionaires, why are they selling courses? The alchemist who discovers how to turn tin into gold stays at home growing their hoard, not making webinars about it. But in a world where transmutation is impossible, roleplaying like you really do have the Philosopher’s Stone means you can sell a step-by-step video course about how you went from rags to riches, discovered your secret, and how everyone else can do the same. What you can’t let on is that your money actually came from the courses you sell, not from whatever thing your courses are about. Ouroboros, the great snake, quietly devours itself.

A quote that says, ' if they’re already such successful millionaires, why are they selling courses?'

So how did we get here? People clearly want to get rich and, against a backdrop of growing inequality, the hunger for some kind of secret cheat code is powerful. Alongside this, the ascent of meritocratic thinking and what philosopher Michael J. Sandel calls ‘the rhetoric of rising’, has helped enable an environment where we collectively believe that, ‘what you can earn depends on what you can learn' (a term Bill Clinton used more than thirty times during his presidency). But the answer goes deeper than this.

The more I delved into the history of this phenomenon the more it felt like it was predictable, if not inevitable. For over a century, all of the different puzzle pieces have been falling into place: a growing belief in the personal power of the individual, the development of persuasive psychological sales tactics, the willing commodification of ourselves and of others, and the maturity of the systems and platforms that expand the influence of these gurus to an incredible scale. It’s a phenomenon unique to the times we live in but, even so, has its genesis in surprising places.

None perhaps more surprising than with a man who claimed he could force feed you lemons with his mind.

A New Religion of the Self

Phineas Quimby was a ‘quick motioned and nervous’ man of meagre education and humble beginnings, starting out in life as a clockmaker in Maine in the early 1800s. Later in life, he left the clocks behind to make a business revealing what he believed to be certain universal truths about mankind. The secrets to our success, our happiness, even our physical health, he claimed, were all locked up in our minds. If we could only think the right things we would be cured, be rich, and be happy. He wrote: ‘there is nothing of us but belief. It is the whole capital stock in trade of man. It is all that can be changed, and embraces everything man has made or ever will make.’

He also said that: A) he could stop a man dead in his tracks using only his mind, B) he could electrocute a person purely by thinking about it, and that, C) all diseases were ‘an error of the mind, and not a real thing.’ He also claimed to have cured a man of a crippling lemon-eating habit(!) by force-feeding them to him in his dreams. ‘When I had him asleep, I would create mentally a lemon, and he would see it. Then I would make him eat it till he would be so sick that he would vomit. Then he would beg me not to make him eat any more lemons.’ He was, in short, a quintessential quack. But he was the quack heard round the world, because it was his gospel that would go on to seed what is now known as the ‘New Thought Movement’. 

‘New Thought’ is a loose collection of vaguely religious, spiritual and new age philosophies that centre around the self. While its adherents are keen to stress that God or ‘the universe’ are still somehow involved, they spend far more time focusing on how the divine comes from within and how what we do with that divinity can shape the course of our lives. To someone down on their luck, it’s a compelling argument; if I only get my thoughts in order, if I only say the right things inside my head and, if I only take the right actions… wealth will flow and my problems will be solved. While not codified or centralised by any one body, New Thought is the religion of the individual, and its prayers are systems for personal gain: repeatable, reproducible and, if you don’t get results, entirely your fault. 

A guru sitting on two people points to a flipchart with a diagram on it

Ideologies that have sprung from the New Thought movement are as varied as the law of attraction (manifesting success into existence through your thoughts) and the prosperity gospel (preachers arguing that a righteous belief in Jesus will make you rich). In all of them God, grace, fate and even pure luck itself take a backseat to the thoughts in your head and the things you do. No matter your starting point—whether you are born into luxurious wealth or abject poverty—your success or failure is a product of your own making, unrelated to exterior forces. Born into privilege and made your fortune? Well, clearly that was thanks to your actions alone. Financially ruined by crippling medical bills? Well, that’s entirely your fault too. It’s a philosophy that turns ‘there but for the grace of God go I,’ into, ‘there but for the grace of Me.’ 

Ideas that take hold in the minds of a few can be spread to many, especially if they promise success. Following Quimby, Ralph Waldo Trine (1866-1958) was the first ‘new thinker’ to gain publishing success with In Tune With the Infinite: Fullness of Peace, Power and Plenty, followed afterwards by Napoleon Hill (1883-1970) who found even greater acclaim with Think and Grow Rich, published in 1937 and still enormously popular today. Between them, they were two major players in a growing movement that emphasised mind over matter and painted the individual as the hero of every story. But there is one towering figure, above all others. that dominates this early landscape. Dale Carnegie.

Originally born ‘Carnagey’, Carnegie allegedly changed his surname to associate himself with business magnate Andrew Carnegie. It was a move that, today, would be like you or I changing our surnames to Musk, Bezos or Buffett. His book How to Win Friends and Influence People was published in the midst of the great depression in 1936, becoming an instant hit that remains extraordinarily popular to this day. It taught a series of techniques to reshape your identity to succeed, reframing your personal interactions in a way that mimicked the day-to-day life of a salesman: avoiding confrontation, not criticising anyone, ‘arousing want’ and talking about life in terms of success and ‘the game’. Even the title itself hints at the supposed reason to make friends in the first place: to get what you want out of them.

The book was popular at first with salesmen, spawning a cottage industry of seminars and programs in the wake of its publication. It was at one of these very seminars that struggling vitamin seller Carl Rehnborg met two such salesmen—Lee Mytinger and William Casselberry—who were developing a sales plan ‘never before seen in the sales world’. Their plan bore a striking resemblance to something that was already a known entity: the pyramid scheme. Between them they would sell Rehnborg’s vitamins through a network of distributors, the only catch being that the majority of the profits those distributors made would be funneled directly upwards to Mytinger, Casselberry and Rehnborg. ‘Nutrilite’ was a runaway success and was later bought out by two of the scheme’s most successful salesmen, Jay Van Andel and Richard DeVos. They folded it into their own business, Amway.

These schemes are still around today. We call them 'multilevel marketing schemes', or MLMs for short.

Your Friend, the Sales Opportunity

When you join an MLM you believe your job is to sell whatever products the company is making. They’re typically commodity items like essential oils, vitamins, or protein powder. The idea is that by running your own business you will eventually make your riches. After being recruited, you buy into the scheme for a fee then have to hit a minimum sales figure each month. Seems simple enough... buy products, sell for a profit. Everybody wins, right?

Wrong. Your real job in an MLM, and the true aim of the system you have joined, is not selling but recruiting. If you can build a team underneath you (the logic goes) you get a share of their spending and sales each month. And why would people want to join your team? For the same reason you did, of course: to make money, be independent and transform dreams into reality. But, because of the way these schemes are structured, the lion’s share of each recruit’s buy-in fee and future sales bypasses you and disappears up the chain. To be the first recruiter at the top of the pyramid is to receive these spoils. To be the latest recruit is to be those spoils.

In his book Ponzinomics, anti-MLM campaigner and industry expert Robert L. FitzPatrick explains the mathematical improbabilities at work with MLM recruitment. ‘An early tactic was 'five get five' where you would bring five friends on board, then get them to do the same: 5, 25, 125, 625... and so on.’ To the person being sold on the idea of joining, it seems ideal: you have a repeatable system you can use to generate exponential sums of cash. All you need to do is convince your friends and family to join, then let simple math take care of the rest. But, as FitzPatrick then explains, ‘if you follow this for 14 levels you run out of people on planet earth.’ This mathematical quandary speaks to the fundamental difference between MLMs and ordinary sales: the commodity being traded is not the essential oils, or the vitamins, or the protein powder. It’s the people.

Although still somehow heralded as a way to make yourself financially independent, MLMs are designed in such a way that it is almost impossible to advance or make money. In an exhaustive report published on the FTC website, Jon M. Taylor, founder of the Consumer Awareness Institute, details how the vast majority of MLM recruits are not making money but losing it. This is why ambitious recruiters inside these systems need to get three things right: bringing people on board, keeping them there and, if there’s time, finding some other way to make money inside a system where most profits disappear upwards, even for the most successful recruiters.

A quote that says '“Why don’t you DRIVE a Corvette?” she finally asks him. Well, he says, he can’t afford it. And that happens to be precisely Valerio’s point. He can’t afford to fulfill his wish.’

Bringing people on board and keeping them inside MLMs is the focus of Michael G. Pratt’s study of Amway distributors from the year 2000. He identified a cyclical process where successful recruiters or ‘mentors’ would deliberately unsettle and destabilise the identities of potential recruits to awaken a sense of ‘seekership’ within them, giving them a yawning need for something, anything, to help them re-establish their sense of self. The name that Pratt gave to this tactic is ‘sensebreaking’:

The main purpose of sensebreaking is to disrupt an individual's sense of self to create a meaning void that must be filled. A primary sensebreaking practice in Amway is dream building. Dream building creates a meaning void by (1) linking one's sense of self to possessions, (2) creating motivational drives by comparing current and ideal identities, and (3) perpetuating these motivational drives.'

During the study, Pratt was taken shopping by his mentor for the express purpose of dream building. This involved spending an afternoon in the city together trying on suits that he couldn’t afford. In a personal diary entry from the time, he details how his mentor even tried to recruit the sales attendant right there among the suit racks. Going shopping for suits is a heavy-handed technique, though, requiring a lot of time and effort. Much easier to simply ask what somebody’s dream car might be, as Amway recruiter Jean Valerio does in My Father’s Dream, journalist Erik German’s 2011 account of his family’s encounter with the then-ubiquitous MLM.

She chooses a nervous-looking 17-year-old in the second row and asks what kind of car he always hoped to drive. “A brand-new Corvette,” the teen says, quietly.  “A brand new Corvette. What color?” Valerio asks, her eyebrows penciled on and arched high. “Yellow.” Valerio looks away, towards the rest of the room and repeats the word yellow. Her tone is pensive. Approving. She says it again—“yellow”—letting it sink in, giving everyone time to summon a crisp image of the sunny sports car in their mind. Valerio turns back to the 17-year-old and asks what he actually drives. A 1988 Oldsmobile Cutlass, as it turns out. This, too, Valerio repeats and lets it steep. “Why don’t you DRIVE a Corvette?” she finally asks him. Well, he says, he can’t afford it. And that happens to be precisely Valerio’s point. He can’t afford to fulfill his wish.

With the recruit’s sense of self broken and their seekership firmly established, the door is wide open for the rhetoric of the scheme to rush in and fill the mind of the willing recruit. The challenge then becomes how best to keep him there and make money off him in the process. This is made difficult by the sheer grind and constant financial hardships that working inside an MLM brings but, luckily, these same recruiters had something that could keep people on board for longer and longer: educational content.

German’s father would receive a $6 book each month, and a $3.50 tape every week. Both of them would arrive with the promise that their motivational influence would unlock the secrets of success and propel him forwards. Over time, ‘it dawned on my father that the upline Diamonds [senior recruiters] were funding their lavish lifestyles with profits from motivational tools and functions’ and not the proceeds of the scheme itself. Like today’s modern gurus who pepper their own adverts with fancy cars and lavish lifestyles, the richest source of wealth inside the system was not the ‘business opportunity’ but the educational materials that promised much but delivered little. When German later went to interview Jean ‘Yellow Corvette’ Valerio herself, he asked her what percentage of her earnings came from her educational content. ‘“That’s very hard to say,” Valerio says quickly, “that’s VERY hard to say.”’

While not as brazen as today’s gurus, MLMs pioneered the bait-and-switch of selling fantastic dreams but delivering toothless training. They also helped normalise the commodification of others, removing the taboo of selling to your friends and family and, for that matter, anyone you happened to meet in the wider world. For this to work well, it depends on the charisma and magnetism of star recruiters and the motivational speakers invited to help fire up conference audiences. With the appearance of the internet and its growing adoption from the nineties onwards, your charisma was about to become that much more important.

CEO of Me, Inc

‘Starting today you are a brand,’ wrote Tom Peters in Fast Company in 1997, ‘Start today. Or else.’ If the twentieth century saw us commodifying others for our own personal gain, the turn of the twenty-first saw the emergence of the ‘personal brand’, an explicit call to commodify ourselves. While the idea of personal branding goes further back, it’s Peters’ article that is credited with making the term popular.

‘The web,’ he argued, ‘makes the case for branding more directly than any packaged good or consumer product ever could.’ While he was perhaps too early to suggest that everyone rush to make their own promotional websites, he made the connection the other way around: in the overstuffed inboxes of your peers and superiors, whose emails get opened first? Simple: the ones attached to the strongest personal brands. So, that being the case, why wouldn’t you want to have the best personal brand of all? ‘Being CEO of Me Inc. requires you to act selfishly,’ he declared. ‘It’s that simple—and that hard. And that inescapable.’

In the ten years that followed Peters’ article, a lot would change. The decade after Y2K saw the sustained proliferation of personal computers, the first mainstream social media networks and the spread of smartphones. The world connected itself and started figuring out just what we were supposed to do with all this new technology. One of the first and most influential figures to realise the enormity of these developments was Gary Vaynerchuk.

A quote that says  ‘Do you know how many people on the internet are faking a lifestyle so that people pay them?’

Gary ‘GaryVee’ Vaynerchuk is an entrepreneur with a wide collection of profitable businesses under his belt. Although his initial success originated from his family’s ownership of a successful liquor store, it perhaps endures because of his ability to spot opportunities and capitalise on them, which is exactly what he did with the internet. Earlier than most, he preached that anyone—even you! especially you!—could be famous online. The basic principle of his 2009 bestselling book Crush It! is simple: the internet is full of opportunity and you should use it to build a brand around your personality, tell people stories that they want to hear, and then use that brand to make a fortune. Today, we know all too well what 'influencers' are but, at the end of the aughts, he was one of the first to catch on.

Like Peters before him, Vaynerchuk used his book to argue that, ‘Everyone—EVERYONE—needs to start thinking of themselves as a brand.’ Your goal, he explained, should be to build a brand around your personality that is so successful that you can leave your day job, ‘even if you’re happily employed.’ The internet was ready, if you were willing, because the new media of YouTube, social media platforms, blogs and podcasts had swept away the need for traditional gatekeepers. Publishers, agents, TV execs, radio producers were, in his view, banished to irrelevance. They're still around, but who really needs them? You could do what you wanted without anyone’s permission! Want to be a ‘TV’ personality? Start your own YouTube channel! Want to be a 'best-selling' author? Launch an eBook on Amazon! Want to sell ‘educational content’ to the networked masses? Go for it!

Search interest for 'influencer', 2009-2022 Source: trends.google.com

Vaynerchuk saw the portents early on, connecting the sentiment of Peters before him with the reality of the emerging social media landscape. To him, the answer was clear: to succeed, we must commodify ourselves by parceling up our personalities and trading them for likes, comments and shares: the holy trinity of a new quasi-currency that the talented could convert into real cash. Since then, the rise in popularity of the term ‘influencer’ has coincided with the growing hegemony of Facebook, Instagram, Snapchat and TikTok. Witnessing all of this, the lived experience for the average member of the public with any of these apps on their phones was to see other people—people just like them—rise from obscurity to gain influence, status and wealth. It’s a compelling thing and, with books like Vaynerchuk’s sitting atop the bestseller list, it could make anyone wonder if perhaps they might be able to do the same. And why not?

Where experts and celebrities had before been chosen and anointed by the guardians of public taste, now the public could make their own decisions and vote with their thumbs. Most of the time this is a good thing; the rise of the ‘creator economy’ has allowed for an incredible outpouring of creativity, art and innovation over the last decade. But there's an important function that the gatekeepers of old used to exercise: quality control. While they may well have crushed the dreams of countless aspiring personalities, they would also have asked an important, simple question: 'Is this person full of shit?' Suddenly, the answer to this question didn’t matter because it simply wasn’t being asked anymore. At a time when anyone could establish their brand, grow an audience and use it to make a profit there was suddenly nobody to verify them, nobody to vet their claims, and nobody to sniff out whether they were, in fact, full of shit.

In a 2018 interview published on his own YouTube account, Vaynerchuk asks his interviewer: ‘Do you know how many people on the internet are faking a lifestyle so that people pay them?’ Everyone was, essentially, faking it, ‘and their business is to make money off you.’ But, of course, they’re not faking anything—they’re doing exactly what they’d been taught to do.

For all the prescience that Vaynerchuk had about the importance of building an online brand, the question of actually making money from that brand is something that he doesn’t really focus on in his book. While he does list a few ideas like speaking engagements, ecommerce, consulting and, of course, seminars and education but, unlike his fervor for building an audience, he mostly leaves these ideas as they are: ideas. Luckily, at the same time, there was another book on the bestseller lists that would tell you, step by step, exactly how to make your fortune.

The best part? You only needed four hours a week to do it.

A Blueprint for Joining the New Rich

In The 4-Hour Work Week, author Tim Ferriss argues that anyone can join the ‘New Rich’—a class of nomadic internet entrepreneurs—and live the life of their dreams. ‘Income Autopilot’ is the title of a brief twenty eight page chapter at the heart of the book in which Ferriss outlines the exact process for how anyone can make money online with minimum effort and maximum reward. The aim of the game is to generate ‘passive income’, money that comes from a light-touch business where your only job is to watch the money roll in. To do this successfully, Ferriss has only one suggestion for us. In fact, he claims to have found something that can withstand a markup of ‘20-50x’, and generate a margin better than ‘heroin or slave labor’. His secret? Information products.

That’s right: the man whose ‘information product’ you are reading is advising you to make your own. But not just any old information product—certainly not a book—but an information product in a niche with enough demand to sustain a high price. Ferriss recommends you pull your product together as quickly as you can, ideally within three to four weeks, by 'paraphrasing and combining points from several books on [a] topic,' or by repurposing content that is already in the public domain. He then recommends setting the price between fifty and two hundred dollars to discourage time-wasters and keep margins high.

A quote that says 'It is not necessary to be the best—just better than a small target number of your prospective customers.

The main problem you’ll have is that, when the sum of your knowledge amounts to a handful of popular books, you’re far from an expert. By any sensible measure you’re actually a nobody, a zero, a pretender. So why should anybody listen to you? Ferriss deftly bats this objection away by redefining what the word means. ‘“Expert”’ in the context of selling products,’ says Ferriss, ‘means that you know more about the topic than the purchaser. No more. It is not necessary to be the best—just better than a small target number of your prospective customers.’ Read a couple of books on a topic and, so long as you’re selling a course about it to people that know less than two books’ worth, congratulations: you are now an expert.

Many people have something that they probably do know more about than the average person, but the key question is whether or not there is enough demand to sustain a profitable paid course about it. The problem is that the last ten years has seen an explosion in the amount of free educational content across all kinds of niches great and small, making it harder to justify why you’d need to charge for a course. The key difference then becomes whether or not the topic you claim expert status in has ‘inelastic demand’; that is, does a very high price dull the hunger for your product? If not, you’re onto something. The promise of health, wealth and happiness will have the desperate and disenfranchised lining up to pay if, as Ferriss says, ‘you can create a high enough perceived value.’

Like Vaynerchuk, Ferriss is by all accounts a genuine success who identified a canny way of making money online and his system appears to work. This makes it an enticing one to co-opt. How you use his system is, of course, a different question altogether—while many have doubtless used Ferriss’s methods to deliver high value educational content and reap the rewards of doing so, the recipe he outlines bears an incredible similarity to the ones used by the gurus of today. Below the surface level, none of them appear to be true experts in the topics they talk about. Instead, they’re experts in advertising and selling expensive courses, twisting the originally honest (if cynical) intentions of the ‘4HWW’ system.

It’s hard to estimate the impact and reach of The 4-Hour Work Week, but it would be a gross understatement to say that it was, and is, incredibly significant. When it was first published, the New York Times ran a profile on Ferriss highlighting how he had captured the imagination of Silicon Valley because he was ‘selling the alluring promise that you don’t have to wait’ for an exit event or IPO to make your fortune as an entrepreneur. The success of his book led to the publication of four more and launched Ferriss to stardom. Today, his website claims that his podcast has been downloaded over six hundred million times. His influence—his personal brand—reaches further and wider than many, if not most.

It’s at this point in the late 2000s that many of the fundamental building blocks of the coming guru explosion have been placed. We’d long become accustomed to the idea that anything is possible if we believe in ourselves and use the right systems, we’d grown comfortable with commodifying others and ourselves for personal gain, and we’d been busy building our personal brands while admiring those who’d built theirs. The 4-Hour Work Week popularised the idea of creating and selling high margin information products and supplied the necessary blueprint that anyone could use for their own ends. The only problem remaining was that, at the time, it was hard to advertise and even harder to build the systems like web pages, email services and payment providers that would help you take your products to market.

The following decade would change all of that.

People Go In, Money Comes Out

On November 6th of 2007, the same year that 4 Hour Work Week hit bookstores, Mark Zuckerberg gave a presentation to a group of marketing executives in a New York City hotel. His announcement would change the lives of everyone in the room, as well as everyone outside it. He was there to launch Facebook Ads.

For the previous three years since its inception at Harvard University in 2004, people the world over had been happily signing up to Facebook and handing over reams of data about themselves. At first, it was mostly voluntary mundanities: I'm from this town, I go to school here, today is my birthday, I'm in a relationship with this person... tame stuff, to begin with. But it was only the beginning.

It doesn't take a marketing genius to recognise the power of this trove of data, even in its earliest form. Rather than splashing a costly advert in a magazine and hoping for the best, you could now make your marketing appear in front of exactly the type of people you wanted it to. 'Of all the millions of Facebook users', you could say, 'show my advert only to single men, aged 20-35, who work in a major metropolitan area, with an interest in ‘making money online’ and an income below $X...' and Facebook would duly comply. Your list, whittled down to a cast of thousands (or millions, if you had the budget) would then show your ad to those people and those people alone.

Having already created your niche information product, you could now show enticing ads about it to the people who would want it the most. If you’re fresh from reading your three-to-four books on small business and personal finance, you could create and market a course in ‘how to get rich online’ to the people most desperate for exactly that. There’s no need to ask them what their favourite sports car is either, because all you need do is appear in your advert next to an especially flashy one that you’ve hired for the occasion. Why stop there? You could also rent a beautiful house on Airbnb and park your car out front. Then, from under the shade of a nearby palm tree, you could wax lyrical about how you’d found the secrets to success. But what happens when people click on your advert to find out more?

A quote that says ‘an army of wannabe entrepreneurs looking to enter a space that will allow them to make money online’

In 2007 you might have built your own website with a little rudimentary HTML and CSS, hooked it up to PayPal, and sold PDFs or CDs to people one by one. It was the good old days of the DIY internet: a patchwork of pages with ‘under construction’ GIFs and early-stage services cobbled together to make the occasional sale. For many, it worked well enough if you knew what you were doing. But what if you didn't have a clue? It wasn't long before a raft of companies emerged to satisfy the growing demand for services from people who didn't have the time or money to build things from scratch. What was once a patchwork of tools held together with custom code was becoming a seamless ecosystem, simple enough for anyone to use. SquareSpace is a now-ubiquitous website building tool with an annual revenue of over half a billion dollars, and services like MailChimp offer a free and easy way to collect and send messages to a mailing list.

Where most have now heard of SquareSpace or MailChimp, one of the most popular services in the guru world, ClickFunnels, flies mostly under the radar. A 'funnel', as the name suggests, is wide at the top and narrow at the bottom. The aim of a funnel is to scoop up as many people as possible and take them through a process designed to part them from their cash. As ClickFunnels’ marketing material puts it, 'website visitors come in at the top, and cash comes out of the bottom.'

Launched in 2014, ClickFunnels had generated $360M in revenue by the time its founder, Russell Brunson, was featured in a 2017 Forbes profile. Brunson, whose career in ecommerce (according to the article) began when his ISP cut off his internet for sending one million emails in one night, runs a service that claims to have processed more than eleven billion dollars’ worth of transactions throughout its lifetime. The Forbes article details how he commands ‘an army of wannabe entrepreneurs looking to enter a space that will allow them to make money online’ and that his software ‘allows anyone...to sell on autopilot.’ And sell it does, because these funnels have been built in such a way that, once you enter one, it can be hard to leave.

Having set a high price for your product to keep those margins looking good, your sales process will need to work hard for you. Maybe you want to send people to a 'squeeze page funnel' to get their email address in exchange for a free PDF? With their email, you can then market relentlessly to them with an automated mailer that you've set up. Or maybe you want to get straight to the point with a 'tripwire funnel'? A 'tripwire' starts with a free or nearly-free 'no brainer' product, perhaps a $1 book or a heavily discounted course. Who wouldn't want that? But, once you click through, you are immediately upsold on other products that you didn’t necessarily want in the first place.

So trip your customers. Squeeze them. Do whatever you need to get them to give you their credit card information. With systems like this, where even the sales tactics have been baked in from the beginning, what’s to stop you?

Broken Window Economics

The naive or cynical among us may wonder aloud what the harm is in all of this. After all, it’s only a few people selling courses online! Sure, they might not be all that useful but, hey, even a stopped clock tells the right time twice a day, and these courses might help some people. They also let a handful of enterprising characters make a few bucks and, well, it’s a free market after all… is it really that bad? The short answer is yes, it is. In my view it enriches charlatans, siphons money from the vulnerable, and tarnishes reputable educators by association.

Consider nineteenth century French economist Frédéric Bastiat’s ‘parable of the broken window.’ A boy throws a stone, breaking a pane of glass belonging to the neighbourhood bakery. Somebody walking past declares this a good thing: the glazier will benefit from the work of replacing the glass, so it must be good for the economy. Not so, sighs the baker. While he does have the money to replace the window, he had been saving those funds to buy a new oven with the aim of growing his fledgling business. But now, instead of an unbroken window and a new oven, all he has is a window like the one he had before and no way of buying the new oven he needs. So much possibility and potential wasted by the careless actions of an irresponsible child.

The internet is, apparently, overrun with thousands of glaziers who are breaking all the windows themselves. Nobody seems to be stopping them, and business is booming. Some are trying to hold back the tide, most notably there is a growing cadre of YouTubers like Mike Winnet, Coffeezilla and James Jani who raise the alarm while barely anything happens in response. If anything, things seem to be getting worse. Even the FTC, protector of the common consumer in the US, has recently lost the ability to compel businesses to pay back ill-gotten gains. Even the humble MLM scheme draws little ire from regulators anymore; while it’s a questionable business model often dogged by lawsuits, it’s been allowed to continue unchecked because it’s a charade we’ve simply gotten used to.

A person is lowered into a grinder, money comes out the bottom. Two others point towards a sign that says 'how to get rich'.

Thanks to the culmination of beliefs, tactics and technologies making the guru economy possible we have very slowly, but then all at once, sleepwalked our way into all of this. Our unwavering belief in the power of the individual has undermined our ability to sympathise with people who have failed, and tricked us into thinking that success is only a matter of finding the right system or taking the right actions. At the same time, the creeping adoption of market values into our lives has degraded how we relate to others and ourselves, such that we are now all commodities trying to trade one another on an open market. Finally, the last decade has seen the advent of mature web software and the fixation with ‘learning to earn’ enabling the mass-market guru economy to build on the tactics created and refined by multilevel marketing schemes in the mid-to-late twentieth century. 

Just because we’ve stumbled into this reality doesn’t mean we have to shrug and accept it. For many industries suffering from a widespread systemic problem, the obvious solution is simple: regulation. But then it’s never that simple. How would you regulate something as nebulous as ‘online education’? There are three major barriers to doing this. The first is that the people selling these courses are spread all over the world with the ability to market and sell their products wherever they like. This would need a coordinated international effort, something that feels incredibly unlikely for a problem that doesn’t register in international politics. The second barrier is finding consensus around a set of rules that wouldn’t splash genuine online education with collateral damage. Whatever we land on would likely have a chilling effect on all of the wonderfully useful educational content out there, one of many things that makes the internet a fantastic place to be. The third and most powerful barrier, I suspect, is that many of us just want to believe the gurus are right.

Just maybe, if we try hard enough, true success is within our grasp. If we believe in ourselves, if we make friends and influence them, if we build our personal brands, if we use the right systems to capitalise on our audiences then, maybe, our dreams will come true. The alternative? Perhaps it’s too horrifying to consider. If the gurus are wrong, then everything—health, wealth and even happiness itself—is out of our hands and there’s little we can do about it. If we accept that something doesn’t quite seem right and admit that we’ve been sold a bill of goods, then maybe we’ll also have to admit to ourselves that there’s no hope, that no system or course will save us, that we’ll be hopeless, that we’ll have no chance. But, luckily, we know that we’re different. We’ll take this next course and succeed. We’ll make the big bucks where everyone else has failed before. We’ve got what it takes.

The people that don’t? That’s just their fault. And, if all else fails, we can just create our own courses and sell them to the masses. Which reminds me… do you want to join my free training?

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I write a newsletter about the internet. It's called Internet Connection. There's a few hundred of us that fall down the rabbit hole every other week. Want to come along for the ride? Drop your email below.

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