
Ask HN: Any examples of ethical pyramid schemes? - gitgud
To be clear I know pyramid schemes are scams, however some companies use similar tactics to increase user adoption.<p>For example Uber gives you credit if you get friends to sign up. Many other companies use this tactic too. It seems a product could get explosive growth using a method like a pyramid scheme, but I&#x27;m not sure it&#x27;s ethical...<p>Are there any other examples of ethical pyramid schemes in business?
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Jefro118
A referral scheme and a pyramid scheme are very different things. A pyramid
scheme is where revenues derived from recruiting people into the scheme exceed
revenues from sales of the end product. Because people further up the pyramid
make commission on the recruiting/sales of those further down, growth requires
the perpetuation of fraudulent claims about income potential - selling the
hope that the new recruit can reach those upper levels of the pyramid when it
is more or less impossible unless you get in early, because people are already
occupying the higher levels.

This all applies when the pyramid scheme is zero sum (i.e. the transfer of
money up the pyramid). I once had the idea for a company that would do
tutoring in a pyramid structure where a tutor would be one level above their
tutee in this pyramid and that there would be non zero-sum interactions since
the tutor also cements their understanding by trying to teach someone one
level below them, with some monetary commission involved too for a tutor's
tutee's tutee's tutoring, etc.

That wouldn't be a pyramid scheme by the aforementioned definition though.

You can't really have an ethical pyramid scheme by the definition, I think
people just confuse "pyramid-shaped" things with the precise definition of a
pyramid scheme.

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blackflame
I think the fundamental nature of a pyramid scheme is that the people below
finance the people at the top. In the example you used, the people at the
bottom are not injured by the people who invited them. It would be different
if they had to pay a fee to sign up once invited that went directly to the
person who invited them. That's the scenario that sets up the people at the
base of the pyramid for fraud. In your example, people aren't injured if they
can't find people to recruit.

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vkaku
Most jobs are positive pyramid schemes, IMO.

