Why Twitter Is A Ponzi Scheme

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8 comments

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+ Mayank Dhingra 7 months ago
loved it :)
+ guest86afc7 7 months ago
Thanks for the comments everyone (unnamed guests included).

Sure it’s a square peg in a round hole. Absolutely it’s not pure Ponzi. The presentation was tongue-in-cheek after all ('follow me on twitter' on the last page was supposed to give that away)

I was looking for another way of puting 'emperor’s new clothes'. The definition of a Ponzi scheme used here comes from a ppt shown in court to help educate jurors. In fact my slideshare is an exact replication of that ppt with minor text changes to make the point.

Either way, I do stand-by the premise of Ponzi (or perhaps Pyramid Scheme as a good alternative analogy) as a neat way of explaining some of what makes the marketing of social sites work - in particular during the early-adopter phase.

Charlie
+ guestc92cad 7 months ago
People join Twitter for social capital? Social capital can be equated to stacks of cash? There is only so much social capital to go around? The ammount of social capital you get from Twitter depends on when you began tweeting? Twitter is going to take all the social capital and run? I think you’re trying to fit a square peg through a round hole here.
+ Benjamin Joffe 7 months ago
Nice design & fun story - early adopters do ok so I don’t worry ;-)
Would Facebook, MySpace and market listed companies like Google and Apple qualify as Ponzi schemes too?
+ Jonathan Boutelle 7 months ago
WOOT! This was an awesome presentation. Nice work...
+ guestdc259b2 7 months ago
I suggest you research what a Ponzi scheme actually is, because your whole concept is absurd.

I take it you must think every social networking site is a Ponzi scheme.
+ Tom Frazier 7 months ago
genius...
+ Konstantyn Spasokukotskiy 7 months ago
I think you are essentially right if some conditions apply.

1. The users’ ability to be social attraction is the same throughout the population.
It isn’t so obvious, since there are entities able to devote significant resources and quickly gain the social capital even after joining late. Put it short. The newly born isn’t in social disadvantage if she has powerful parents.

2. There is no money in the business.
Given the business model is to sell to the buzz-word oriented crowd the services they like in the format they prefer, the late joiners will profit from those business service offers (not from each other) if the model succeeds and if the service has a critical mass of users. Put it short. If the crowd is big enough, the party-goers could suddenly have to benefit the transformation of the place into a mall. In this case the twitter is a fraud.

Notes on slide 1

3 Favorites

Indus Khaitan, Technocrat at Morpheus Venture Partners, favorited this 7 months ago
Tags twitter
Jonathan Boutelle, entrepreneur CTO at SlideShare, favorited this 7 months ago
Tags twitter socialmedia
Andy Hunter, digital media & marketing entreprenuer at PURSUIT, favorited this 7 months ago

Why Twitter Is A Ponzi Scheme - Presentation Transcript

Why Twitter is a Ponzi Scheme
- Lured by the promise of Social Capital, early adopters join Twitter, which appears to be legitimate
- As subsequent adopters join, they give social capital to the site …
Why Twitter is a Ponzi Scheme
Twitter uses some of the incoming social capital to pay dividends to the initial adopters, making it look like a legitimate investment Why Twitter is a Ponzi Scheme
- These “dividends” are paid with publicity: “Great job Ashton Kutcher!”
- “ Well done Dell customer service”
- “ Why not follow @BarackObama
Why Twitter is a Ponzi Scheme
- Misled by Twitter’s reported Social Capital dividends, other victims soon join the party.
Why Twitter is a Ponzi Scheme
- Twitter keep the fraud going by paying social capital dividends to previous adopters with capital from new investors – all the while earning commissions and capital from each new investment.
Why Twitter is a Ponzi Scheme
- Eventually the founder sells to Google, before disappearing with all the Social Capital (and cash). Or the scheme collapses when he can no longer keep up the charade. Either way, most investors lose social capital
Why Twitter is a Ponzi Scheme
- Follow me
- - on Twitter: @ cosmond
- - or at www.blog.freshnetworks.com
- With thanks to (and inspiration from):
- - Joseph Jaffe, @ jaffejuice - And What is a Ponzi Scheme by Ralphmon
Why Twitter is a Ponzi Scheme