
$250 Million For A 14-Year-Old's Big Idea: Origami Owl - edw519
http://smallbusiness.yahoo.com/advisor/250-million-14-olds-big-idea-origami-owl-185200844.html
======
iand
Wow, the comments are so heavy and downbeat on this story. There seem to be 2
main arguments:

Various people are saying it's a pyramid scheme and therefore a con. I don't
see it myself. A pyramid scheme generally doesn't have a physical product and
crucially requires a number of tiers recruiting new members. Origami Owl just
appears to be a straightforward direct sales model akin to Tupperware or
various cosmetics parties (e.g. Avon in UK). The reps buy stock, arrange the
parties and sell it. That seems to be entirely legit.

The second bone of contention is with the use of the word "designer" as a name
for the sales reps. Hardly the crime of the century. Tupperware call their
reps "consultants" but they don't charge consultancy rates. It's just in
keeping with the theme.

I think we should be celebrating this young woman's initiative in seeing a
market, finding a product that fits and building out the business.

~~~
roc
> _" Origami Owl just appears to be a straightforward direct sales model akin
> to Tupperware or various cosmetics parties (e.g. Avon in UK). The reps buy
> stock, arrange the parties and sell it. That seems to be entirely legit."_

"Multi-level marketing" is looked down upon as little better than pyramid
schemes/cons, even though people are aware they aren't, strictly speaking,
those things.

Quite a bit of the structure is heavily anti-consumer and even
anti-'consultant'. Incentives often flow up, from each particular direct
salesperson, to the people that recruited them, in a web of perverse
incentives that leave customers and reps alike with a bad taste. To say
nothing of the heavy leveraging of peer/social pressure to incent purchases by
a captive/low-information audience, beyond what they would likely buy on their
own.

> _" Tupperware call their reps "consultants""_

Most of these kinds of companies call their reps "consultants", because of
liability problems, should they go around presenting themselves as employees
or direct representatives of the companies whose goods they're selling. And
these consultants are repeatedly, explicitly admonished against presenting
themselves this way. The admonishments often try to pretty up the arrangement,
like you did, by making "consultant" seem like a desirable title, regardless
of the particulars of the relationship.

Which, in and of itself, is a fairly strong "smell" that the business (and the
relationship) isn't quite on the up-and-up.

EDIT: typos

~~~
efa
> _To say nothing of the heavy leveraging of peer /social pressure to incent
> purchases by a captive/low-information audience, beyond what they would
> likely buy on their own._

Yes, my wife if constantly invited to these "parties" were the host sells some
kitchen or personal products. She also feels she has to buy something even
though she doesn't need anything. Business built on guilt and social pressure.

~~~
infinite8s
Doesn't that drive most of consumption (at least the social pressure aspect)?

------
Nursie
_Origami Owl takes on independent associates – known as “designers” – who buy
products at a discount and then peddle them to others for a marked up price.
One of the favorite points of sale are “jewelry bars,” or private parties at
someone’s home or another venue operated by a “hostess” (the hostesses get
discounts and some free products too)._

Wait, hasn't this pyramid selling thing been done to death already?

\--edit-- I mean obviously not completely _to death_ because it seems to be
working here, but, well, you know what I mean :)

~~~
jerf
This smells bad to me. Even by Silicon Valley standards, that's way too much
growth, too quickly. This smells like some adult (or more likely, group of
adults) with a ready-and-waiting Pyramid scheme is using a 16-year-old girl as
their marketing story. I hope she comes out of this with something other than
millions of dollars of debt in her personal name or something.

Edit: I've been inspired to sign up for a Google Alert on "Origami Owl". I
shall test my nose for accuracy.

~~~
ryanjshaw
I don't see any evidence of a pyramid scheme here, which is unsustainable.
This model is similar to what, e.g. Miglio has used for decades
([http://www.miglio.com/](http://www.miglio.com/)). That being said, the
growth is suspicious when you consider there are established players.

It smells more like modified multi-level marketing scheme, which when you read
the following is not surprising, and fits your 16-year-old-as-marketing
theory:

"According to CEO Robin Crossman, employee numbers fluctuate tend to
fluctuate." ... "Crossman, who had previously acted as a consultant with the
company for several months early this year before becoming CEO in May, boasts
a resume that includes _Amway Global_..."

It sounds like the original business was a straightforward jewelry side
business, which ended up becoming something like an "Amway Jewelry" once
Crossman got involved.

~~~
jerf
Sorry, yes, I was sloppy with the term. I'll leave it as-is so your comment
makes sense.

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danso
There's a lot of WTF going on in the OP, but I'd say the cake stealer is the
OP's offhand reference to the mom, who is Owl's co-founder, trying to help
exonerate her child-molesting friend who was using an email ruse later
popularized by General Petraeus

Here's the link from the OP:
[http://blogs.phoenixnewtimes.com/valleyfever/2011/11/susan_b...](http://blogs.phoenixnewtimes.com/valleyfever/2011/11/susan_brock_pal_christian_weem_1.php)

------
DanBC
> Origami Owl takes on independent associates – known as “designers” – who buy
> products at a discount and then peddle them to others for a marked up price.
> One of the favorite points of sale are “jewelry bars,” or private parties at
> someone’s home or another venue operated by a “hostess” (the hostesses get
> discounts and some free products too). The company has about 50,887
> designers.

So, the "designers" don't actually design anything? They just sell stuff at
parties organised by a "hostess"?

I hope the friends of the hostess, and the hostess, know that the designer
didn't actually design anything, because otherwise this feels _really_ sleazy.

EDIT: Great that it took off so well though. I guess.

~~~
mildtrepidation
_So, the "designers" don't actually design anything? They just sell stuff at
parties organised by a "hostess"?_

That's my read on it. I find it puzzling at the least that the article takes
no issue with this at all; it wouldn't immediately occur to me that Yahoo
Small Business would publish paid placement ads as articles, but this doesn't
exactly scream "reporting" to me, so I have to wonder if that's close to the
truth.

If they're using "designer" as part of the pitch, then it's definitely
dishonest and intentionally misleading. If that's just a term a 14 year old
came up with and it's only used internally, then... I guess it's just really
poor word choice.

That said, I do like the fact that when she asked for a car, her parents not
only told her to buy it herself, they suggested she start a business. Too bad
about the... um... less intelligent decision(s).

~~~
wmeredith
>> I find it puzzling at the least that the article takes no issue with this
at all; it wouldn't immediately occur to me that Yahoo Small Business would
publish paid placement ads as articles, but this doesn't exactly scream
"reporting" to me, so I have to wonder if that's close to the truth.

“Journalism is printing what someone else does not want printed: everything
else is public relations.” ― George Orwell

------
ck2
I'm curious if any other country has 16 years olds demanding cars for their
birthdays or if it is just our insane culture.

There are countries where 16 year olds would be completing their 6th year at a
sweatshop making shirts.

~~~
pcunite
ck2, I get what you're saying ... it's true. But we don't model ourselves
after the 3rd world. The governments of those nations should be looking to us,
not the other way around.

Having said that some discretion on our part is needed. I don't think every 16
year old needs a car. But that is up to the parents.

~~~
ck2
The 3rd world reference was to show the other side of the extreme.

I was thinking there has to be some kind of middle ground.

Also, I don't want to be on the same road as a 16 year old driver in 2013 in
the US (with their own car). Zero attention span.

------
ebbv
Another pyramid scheme/MLM company. They seem to be at their historical peak
right now, and no signs of slowing down. Am I alone in wishing the FTC would
crack down on them?

------
enko
Oh, thank god. For a horrible second I thought someone had paid 250 big ones
for a business selling actual origami owls.

~~~
mcguire
Could be worse. I thought it was _an_ origami owl.

------
sharemywin
So let me get this straight. MLM where reps sell products face to face, answer
questions, offer sales suggestions : BAD. Walmart beat supply chain down so
everything has to be made in china because us regs(child labor and
environomental) to expensive and employees down so employees can't afford to
support themselves, GOOD. Facebook were people spend mass amounts of time
clicking on games and wasting time as the company sells every click to the
highest bidder: good. Google auctions search results off(except 14% of the
front page is organic) so most of the product profits go to them: GOOD. Malls
were most of the profits end up in real estate developers hands who probably
got kick backs from the local government to build it in the first place:Good.
Show me a billion $ business model that isn't slimey. Also, I would buy the
peer pressure angle except women spend $700 on a purses all the time. Adn
nobody bad mouths those designers. Apple came out with an MP3 player that
doesn't even play MP3s made obsence profits while child make the electronics
in sweat shops. Also, most recuiters for consulting companies make juice off
the billable hours fo the people they bring in why isn't that frowned on?

~~~
jerrya
_why isn 't that frowned on?_

Because carriage returns.

------
confluence
Oh look it's a kid who founded a pyramid scheme. Please tell me more about the
pyramid parties concerning the sale of pointless baubles.

Revenue metrics are completely pointless. I could exchange $1 dollar a billion
times with my neighbor. That doesn't mean that this little enterprise will
either turn a sustainable profit, nor does it mean that I have a billion in
revenue.

Let the pyramid parties commence!

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fpp
This is not only a 14y-old's idea it is also an idea that is more than 14
years old.

The selling of costume jewellery via hosting aka tupperware parties was kind
of popular with high-income families about 15+ years ago - at that time
products sold were the Bulgari / high price style of objects redone with false
stones as costume jewellery.

Now this is basically the same concept with similar products catering for a
different population group (lower income - less market knowledge).

The companies, like with many others selling products via such a scheme, after
the pyramid has grown to a certain size, become stagnant or disappear (after
those in at the beginning have cashed out).

Have a look at the people and particularly their previous companies mentioned
in the article to know what this model is about. First buy low and find many
that sell / buy high for you - after a while it quickly becomes a seemingly
today very popular model - FABI (find a bigger idiot)

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carlmcqueen
Article sites that her father worked for Amway which makes a lot of sense,
he'd have a lot of experience in getting this kind of model of business up and
running.

Regardless of shady business model, it is good to see parents encouraging and
backing their kids ideas for business.

~~~
jerrya
[http://en.wikipedia.org/wiki/The_Grifters_(film)](http://en.wikipedia.org/wiki/The_Grifters_\(film\))

------
bane
Before everybody gets their panties in a bunch, it's just the same old thing
as a Tuperware party, or Avon or increasingly personal sexual toys. I've even
seen grilling equipment, home beer kits and other kinds of things sold this
way.

Person buys a bunch of inventory from the maker, hosts parties and tries to
sell the stuff at a markup to the party goers. Maker only sells to their
"retailers".

It always seems kind of shady, but in practice the only ones who ever really
get burned are the independent retailers. Usually the product is halfway
decent, if overpriced.

There's usually some kind of pyramid style recruitment element as well, but
moving inventory is typically the goal, not signing up more retailers.

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chadwickthebold
I wish we could get more tech-related startup stories out of Phoenix and AZ in
general. The place has whole lot of capital and some pretty big tech resources
in local big-name firms and educational opportunities, but so far has yet to
leverage any of that into a great startup culture. Mostly what comes out are
business initiatives like this, where tech is sort of a secondary concern. A
great resource for AZ-related tech/biz stories is AZ Tech Beat
([http://aztechbeat.com/](http://aztechbeat.com/))

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saejox
Saw amway and immediately got what it's about.

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segmondy
Why the hate? Because she's not tech? so much speculation without concrete
evidence. HN, you never cease to disappoint... If it was some bullshit JS/Node
website with 1 million users with no fucking revenue, it will be alright if
it's valued at a billion, because some VC invested $10 million for 1% right?

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magikbum
Um Herbalife?

