Provost pays for charlatan tour on April Fools DayApr 7th, 2009 | By Zach | Category: Campus Events, Columns, Opinions
Have you ever had a dream for your future? Do you want security and prosperity for yourself and your family?
Most people will discourage you, because the chance of failure is so great, but you are special. If you have faith in yourself and the commitment to see this journey to the end, you can overcome the odds. Also, I’m selling a book and audio CDs that reveals the secrets of how to get there, so you can have the benefit of overcoming the mistakes that I made.
Sound like a sales pitch? Actually, this is the bulk of the message from the speakers at the Extreme Entrepreneurship Tour, which came to the PSU Theater in the afternoon of April Fool’s Day. The program started off, as many pitches do, with subtle promises. Did you know 80 percent of millionaires are entrepreneurs? That almost sounds like 80 percent of entrepreneurs are millionaires, so you can’t lose! As entrepreneurs, the speakers on the tour only work with people they like. That almost sounds like all entrepreneurs only work with people they like!
Fun, not money, is the driving factor for the entrepreneurs we heard from. They showed a video of a guy playing with a yo-yo who had some kind of online business related to yo-yos. It left the impression that he played with yo-yos all day and money just poured out of the internet. The internet is the new vehicle of get rich quick schemes. I’m surprised one of the speakers wasn’t selling a “Making money on eBay” CD.
The other domain of such schemes is real estate, represented at the tour in the person of Doug Fath, who created and sold two online distribution businesses while in college, and then got into real estate. He’s never worked a salaried job since college, and he can show you how to get rich in real estate, using none of your own money. His system, contained in an 800 page binder and eight audio CDs, is valued at over $2000. This is one of the guys the Provost paid, with our money, to come speak to us.
Fath described his philosophy to the crowd in terms of cultivating assets, like owning rental properties, which generate passive income. It was largely lifted from Rich Dad, Poor Dad, the tremendously popular book by Robert Kiyosaki, with whom Fath said he was friends.
Fath told us to forget about working a job and concentrate on generating wealth. The core problem with that idea is confusing the ability to spend with being wealthy. People create wealth by doing work that adds value to society, such as building a house or caring for the sick. The so called passive income described by Fath actually destroys wealth because it transfers money to owners without adding value. Fath appears wealthy because he has a lot of money to spend, but he gets his money by siphoning it from people that actually work to create wealth.
For example, Fath described a recent property acquisition of his as a “win, win, win” because he was able to pay the scout that found the property, rent the property to someone, and generate $2,200 of passive income for himself each month. He didn’t go into detail about how it’s a “win” for the renter. If he looked at that “win” in any detail, he would find that the renter actually lost. The renter has to pay $2,200 a month extra, above the cost of renovations, for Fath’s “service” of arranging for the renovations and Fath’s risk in buying and marketing the property. Hardly a fair deal.
Nick Friedman, CEO of College Hunks Hauling Junk and another Tour speaker, described taking this extra money from customers as creating added value of the customer service experience. He realized early on in his business that he couldn’t keep charging $600 for junk hauling when his competitors were charging $50. So Friedman created procedures that control every action his employees take. The handbook tells them how to wear the uniform, how to groom themselves, how to address the customer, etc. All this effort enables Friedman to fool his customers into thinking that paying twelve times the price is a good deal for being treated like a human being.
But for an example of adding the value of the experience, the audience didn’t have to look any farther than the stage.
The Office of the Provost didn’t respond to a request to find out how much of our tuition money was paid by the school to bring these charlatans to campus. From looking around myself, I estimated 200 students attended, meaning the price tag was easily in the range of tens of thousands of dollars. Should we be using tuition money to bring people to campus to hock books, CDs and subscriptions to websites, all promising riches for virtually no effort? Is this part of creating well-rounded, educated individuals?
Apparently it is, because several teachers offered extra credit for students to attend. Among the names of instructors I saw as offering extra credit were Lapraza and Haggard. What part of the show on Wednesday was part of a university curriculum? Shameless Exploitation of Desperate People 101?
Finally, one statement by Friedman struck me above all others as being particularly telling and particularly crass. His parting words were, “Those who do nothing, have nothing, and are nothing.” My father was involved in several entrepreneurial ventures in the restaurant industry. We have been wealthy at times and flat broke at other times.
During the rough parts, the whole family pulled together, and we worked our fingers to the bone for what little we had. To see a 25- year-old like Friedman, standing up there and implying that the billions of people in the world who work very hard for the little they have are ‘doing nothing,’ and as a result, ‘are nothing,’ was sickening. It highlights the undercurrent of arrogance running through the entire Extreme Entrepreneurship Tour.