How to Spot a Conman, Part III – The Internet Business Guru

This is the final blog in my 3-part series on conmen. This series doesn’t fit on a company website. But I’m tired of seeing these characters in and around my industry. I want to shine a light on their schemes. We’ll all be better for it. You have 10 minutes to save the world, right?

Stranger to you: “I made a fortune doing this one thing. I will teach you how to do it too, but first, you have to give me your money.” Nobody would agree to this exchange. But what if the stranger were rich, beautiful, persuasive, and adored by thousands of followers on Instagram?

This is happening right now as your eyes skip through this sentence. People getting scammed of their money while trying to build a seemingly legit business. It’s terrible. I will explain it all, with many examples. Here’s what we’re gonna cover:

Splashy Business Models, Borrowed Credibility

First, let’s cover some basic concepts. A regular ole gurus / motivational coaches want you to purchase their online courses so that can inspire you can become rich and successful. Business Gurus want you to purchase their online course so that they can teach you exactly the business model that made them a fortune.

I’ve seen enough of their ads to see patterns. The gurus take an established trend or platform and promise to show you how to use it to make money:

• “Sell on Amazon, drop ship from overseas suppliers.”
• “Start a blog, generate ad revenue. Passive income in your free time!”
• “Sell on Instagram, drop ship from overseas suppliers.”
• “Start an eCommerce store with Shopify, Woo Commerce”
• “Work from Home Doing _______.” (Listen to this Podcast)
• “Lead Generation for Local Businesses”
• “Become an online fitness instructor in your part time. Full time pay for part-time work.”

^ A quick glance at that list, and I guarantee it piqued your curiosity. All that seems real. Those are real things happening in our economy (ecommerce, ad sales, drop shipping) and those are real platforms (Amazon, Instagram.) Who wouldn’t want to know how that works?

Seems legit–why is this a scam?

Business Gurus look for easy-to-pitch models for “Internet Businesses”, then they pretend they’ve done it and made a lot of money, finally they sell you courses on how to do it.

This is fundamentally different from a MasterClass where a pantheon of modern achievers share insight with their online students. (We know that Condoleezza Rice served as US Secretary of State was remarkably effective. And Frank Gehry has earned an his spot to teach about architecture. Sign me up for both!)

Business Gurus? These are people you’ve never heard of, pretending they’re wealthy, and–don’t miss this!!!—they want to teach you the same Internet Business that made them a fortune.

Legit Businesses Illegitimate Businesses

Step 1: Get Setup

• Purchase server space
• Install WordPress, Use a Theme
• Create a Google Adsense account

Step 2: Learn How to Do It

• Learn the basics of blog structure, good writing
• Find your niche
• Create a content calendar
• Publish weekly, promote on the socials
• Build links with credible sources…
• ….

^ You get the idea, right? Steps 1 and 2 are intense but doable. Definitely cool. If given an opportunity, I would teach people these steps to put wind in their sails.

But how do you learn to write well? How do you advance to Step 3 where your insight draws in 1000s of readers? This is the hard part–something I am still learning to do. And my blogs have been read by hundreds of thousands of people.

Let’s keep this example going. I have no desire to sell ads here on my blog, but if I did, I doubt I would earn more than $1000 a month. Maybe 1 out of every 50,000 blogs has enough traffic to make money from selling ad space.

But still, someone is out there making $$$$ on this model, right? Business Gurus pretend it’s them–they pretend that their blogs are generating $50k a month in ad revenue. And they’ll teach you how to do it too. They’ll take you through Step 1 and Step 2, but good luck actually advancing to Step 3 where you make a fortune in revenue from ads.

Q: Do you have other examples of this scam?

• Instagram Sellers who’ve never sold much of anything on Instagram.
• Life Coaching Gurus may never have “coached a life”. But they were trained on how to be a life coach, and now they want to be paid to train other life coaches. 🤨
• Entrepreneurship Gurus will teach you with Google Venture’s Sprint framework to launch your company. Awesome right? Except that guru has never built a company.
• 4 real life examples below!

Q: Why would someone lie about their success?

I can’t answer that question, go ask your pastor. It has something to do with greed. But I know there are crazy good economies of scale here. A course that you create for 1 student can be sold to 100,000 students. Really, most of a Business Guru’s daily effort is spent opening the funnel for more “students” with more video ads.

Q: What if what they are teaching is legit, even if not mega profitable?

Here’s what’s ironic! Most of what gurus teach in Step 1 and Step 2 is offered for free everywhere else online. Shopify will teach you how to open up a shop, Instagram will gladly teach you how to make ads, and there are thousands of helpful videos on YouTube on both topics (here and here). Starting a blog, selling on Amazon, all very doable. You don’t have to pay for this knowledge. It’s free. Please click those links and get started.

Still not convinced? Check out these four examples:

Example 1: Sell Wristwatches with Instagram

This is a fascinating story that details the scam of selling on Instagram. This 27-minute episode does detective work into the machine of the scam. Mind blowing! 🤯

• Fake Company
• Fake Company Headquarters
• Stolen Text / Copywriting from other websites.
• Cheap products
• Young Millionaires (??)

Listen to ReplyAll: “The World’s Most Expensive Free Watch, the story of a man who made the extremely dubious decision to order a wristwatch that he found in an Instagram ad. We explore the strange world that watch came from.”

Or, if you prefer to read a story in The Atlantic: The Strange Brands in Your Internet Feed

Example 2: Selling eBooks on Amazon

Again, this came up as an ad when I was on YouTube, maybe a year ago. These brothers, the twins actually, must’ve noticed that many people have been burned from courses that promised fortune by dropshipping on Instagram (see example 1).

Their argument is that dealing with inventory (more specifically, dealing when people return their crappy products), all of this is a hassle. So why bother selling real-life physical items? Their amazing idea? Sell an eBook instead. 🦄 Take their course and they’ll show you how! 🤮

I vaguely remembered these guys referencing themselves on the cover of Forbes Magazine. So I just searched the web and came across a ridiculous article written about them, for them on Forbes Magazine’s sketchy outer edge of their website. These are pages where “contributing writers”, bloggers who are unaffiliated with Forbes, write glowing articles about people and companies that you’ve never heard of: like these eBook business guys.

I’ll post a link to the article in about 4 inches, but here are some highlights:

• “A lot of people have lost their jobs because of the pandemic.
• Now’s your chance to start a new business.
• eBooks are a great way to make money, consider the billions of dollars of sales of eBooks every year on Amazon.
• You don’t have to work that hard. Amazon fulfills the sales. You can do nothing for a month and still make sales. They made $50,000 one month doing nothing.
• Writing books may be hard–I get it. So hire a ghostwriters and they’ll write the book for you.”

LOL Forbes Magazine, I have no respect for you: https://www.forbes.com/sites/celinnedacosta/2021/12/28/pushing-a-new-amazon-business-model-to-the-forefront/?sh=eb2e440aaefa

Why is this business model ridiculous? (Do I need to answer?) Because getting people to buy your book is hard. Just like everything else in capitalism. Everyone is selling something, and to make a living, you have to offer something unique, beautiful, and helpful to people. I can’t imagine anything more useless than a book about nothing that you hired someone else to write.

Also, this can become funny. If all you want to do is make money off an eBook, the actual content of your newly-penned eBook can be mirror the con itself: “How to Write an eBook” and “How to Make Money with an eBook.” This stuff makes you dizzy.

Example 3: Lead Generation

This is when I really lost it. I was listening to Hillsong United or Matt Maher on YouTube while working. Another day at the office. After a couple of songs, YouTube queued up a new video…

It was from a guy who struggled for years as a preacher. Wanting to spread the Word of God, but had trouble making ends meet. He worked 2-3 jobs just to make it all work. He knows a lot of people are in the same place.

But then something changed.

(My fingers stop typing over in another tab. There’s no way this guy is going to sell me his course. No way.)

…then he started a lead generation business online, a website to help connect customers to businesses. Now just a year later, he’s living in comfort 💰💰💰 and his stresses are gone. He can be a minister without stress. And he wants to show you, other ministers, how to do it too.

Now I am agitated. I switch tabs and watch the rest of the video. I visit his website. I read reviews of his course from angry graduates. But I don’t need to read any of this, I know it’s a scam. Nothing is that easy!

Let’s go through the Lead Generation business model:

• Think of the kind of service that everyone needs here in your town. e.g. plumbers, electricians, tree removal.
• Buy a great domain name of your town and that service: e.g. atlantaplumbing.net
• Build a basic website for a local service, include an contact form and phone number that will *route customers* to real life plumbers in Atlanta.
• This is how you will get paid. For every customer you send to the plumber, you get paid! PASSIVE INCOME.
• To get Google to care about your website, get inbound links from other websites, maybe websites you build as well.
• Soon you’ll be on Page 1 of Google Search Results when someone searches for “Atlanta Plumbers”.
• Best part? You can repeat this model for other services, other towns. Because its a big country with many services, there is endless opportunity for Lead Generation Businesses. (Translated: Don’t worry if other people are also taking this course. They likely won’t be your competitor.)

Seems legit–why is this a SCAM?

Getting on Page 1 of Google’s Search Results is extremely difficult because everyone on the planet wants their business on Page 1. (FWIW, I wrote a blog series on how SEO works.) But let’s say you are lucky and your homemade website appears on Page 1 of their search results. That meant a lot 5-7 years ago, and maybe then this lead generation business model had a chance at being profitable.

But today in 2022, Google has reshaped Page 1 so that it has almost entirely defeated this model. Click on the image below and look at my notes:

But let’s pretend this model does work. Let’s believe that it’s easy, profitable, and endlessly expandable. Why then would anyone stop doing it? Certainly, the last thing you would do is teach others the same business and become your competitors. It’s an absurd idea.

Example 4: My Inbox

Several times a year, we get emails from our Contact Us form right here on smithhousedesign.com. It’s always some guy who wants to launch a business. Here’s an actual email, simplified because this blog is hella long:

Hi Matt – I need a website that is a directory of local businesses. The main components of the site will be the front page, the listing page with local businesses. Most importantly, we want businesses to buy a subscription to our website that lets them upload their photos, videos, hours of operation and anything else pertinent to their companies. Once someone clicks on their business, we need to track their leads so that we can charge them.

This is very similar to Example 3, isn’t it? Except here they have two potential revenue streams: subscriptions and referrals.

After swapping emails with this guy, a few things became clear:

• He’s never done anything in this space before (never worked with other businesses, never had a website)
• He thought it would be easy to build a website. It’s not. He needs my help.
• He has a limited budget. He’s already invested a lot in this business. 😟

In other words, he took an expensive online course to learn how to do something he’s never done. I don’t need to finish the story.

I hate replying to these emails. Because what I want to tell them is this:
“You’ve been scammed. It’s very unlikely this business will become profitable. I won’t take your money. Keep whatever you have left and move on with your life.”

Instead, I reply back with something about being too busy with new clients. So maybe this blog is my way of telling the truth.

Preying on the Desperate

If you’ve made it this far in my blog, you’ve probably felt different reactions flush through your mind. The most likely reaction is this: I would never fall for this. Or, maybe you roll your eyes at anyone who falls for scams: if they think that getting rich is that easy, then they are naive, and they could use a hard lesson in life.

This dismissive attitude is based on a few assumptions:

• You are assuming that the victims wanted to get rich to buy frivolous things or live an indulgent lifestyle. What if they got into this because their family was desperate for money? Overwhelmed with medical bills?
• You are assuming that the victim should have known better. But where do our instincts come from? How do you know to navigate away from the traps set to ensnare us? If you have avoided scams, you probably owe it in part to your parents, who spent 18 years preparing you for the challenges of life.
• You are assuming that the victims are looking for shortcuts. What if the victims feel stuck in life? In spite of years of effort, they are still struggling to make ends meet. They feel like they are pushed out. Everyone else was invited to the party, but they are left outside in the cold, faces pressed against the window pane.

Let’s finish like this. Right now over on Twitter, there is a raging discussion about the evils of capitalism. There is mounting pressure to address economic inequality in America. This is true if you read this today in March of 2022, and it will be true next year in March of 2023. Or March of 2028. There will always be a dark side of capitalism, and it will always exacerbate inequality.

But when faced with a dark side of capitalism, will you take a step to confront it? In the examples above, what did we see? One guru leveraged a global pandemic and high unemployment to get people to buy his bogus course on writing eBooks to become millionaires. Another guru leveraged his credibility as a clergyman to profit off others in ministry. Is this dark enough?

All I am asking you is this: if someone you know seems tangled up in a scam, speak up for them. This is hard because you have to be the bad guy. You have to kill the vibe with tough questions. You have to persist when they want to override you with their enthusiasm. This won’t make you popular.

If they rebuff your warning and go on to fail, they’ll learn a hard lesson, many lessons. But if you are correct and spot the scam, they’ll be forever grateful that you cared when nobody else did.◼️

UPDATE! September 2022 – The New York Times recently published an article exposing Internet business gurus who sell courses on “YouTube Automation” as a way for students to get rich. Few students actually do get rich, but the people selling the courses make a fortune. In fact, the article suggests, 70% of their income is from selling courses. 30% of their income is from the actual business they claim to be so profitable.