Crowd1 landed in Kenya earlier this year with a storm. For a moment, it created a buzz due to its heavenly promises, and many people have joined. But how sure are we that this is not just another scam planning to swindle Kenyan’s hard earn cash. Here is my honest Crowd1 Kenya review.
As typical as they come, with heavenly promises, so will they go leaving broken hearts and depression! And your well-informed friend who warned you will be there, eager to remind you that they warned you. You will be dejected and your life will take a turn.
That’s why I am here, to inform you and educate you about this new thing rocking the streets. Before you get into this so-called “best company in the world”, you must read this review to the very end.
Because if you don’t, it would be like going into a new cave without a torch in search of food. You, don’t know what’s in there. Is it a lion’s den, a snakes’ pit or a rabbit’ warren.
But seriously, why would you care about my idea? Who am I to tell you whether this opportunity is good or not?
Well, I was there when AIM Global was the talk of the town, making young people ‘millionaires’ within days. I was right at the centre of Public Likes, which rocked Kenya like no other and built an entirely new industry of clickers and the workforce called ‘public likers’. It was crazy.
I have seen these things right from the beginning to the end and they all follow the same process despite distinguishing themselves with few characteristics. I have also conducted a great deal of research about Multi-Level Marketing because it excites me.
The witnessing of how people in numbers hop in with hope and glare in gloom as their dreams of a bright future shatter miserably fascinates me. Not in a good way, but in an illuminating way.
It reminds me that despite having the most sophisticated brains in the animal kingdom, humans are eagerly stupid enough to be sold hope and a dream. And they will sell anything they have to buy that dream. They will sacrifice their lives and put their names as collateral to actualize that dream.
It is sad yet exhilarating.
Right here, right now, another dream is making its way around the world. It has accumulated over 7.5 million affiliates by the time of this writing.
It promises to replace your fulltime job, and make you financially abundant within days, weeks or a couple of months depending on your ‘Hard work’. Its members now refer to it as the best company in the world. Its name: Crowd1.
What is Crowd1?
According to the website, Crowd1 is an online networking and marketing company which sells educational packages for affiliates use and resupply from its business partners.
It boasts of millions of highly ambitious members with love for entrepreneurship and salesmanship and partnerships with large companies and organizations.
It also describes itself as a digital networking and marketing company that offers shares that will enable them to share part of the company’s profit from other online gaming and gambling companies (Affligo and Miggester) she partners with to all members.
That’s the definition the company wants people to learn which benefits their business model. Instead, what Crowd1 really is, a pyramid scheme!
A company which paints a picture of opportunity for its members to sell products and services and earn a living doing so yet the real source of revenue is from premiums paid by new members joining the marketing network.
Forget about the dividends they claim to offer which wouldn’t put 3 meals on the table.
How does Crowd1 Make Money?
As defined early, Crowd1 claims to make money from its affiliated online gaming and gambling companies which it then shares the profits with its members by paying a weekly dividend of 2.5 euros.
Besides that, it generates more income from the premium educational packages it sells to anybody joining the platform through its affiliates.
So, I did some study into the two companies Crowd1 alleges to make profits from. Affilgo claims to be both a global gaming network and the fastest-growing affiliate marketing platform. It also claims to be in partnership with LTech, an alleged market leader in resale of lottery tickets.
When you do a google search on these two, you’d expect to see a lot of information from credible sources or established online publishers.
For instance, if you search a company like Safaricom which is the leading telecommunications company in Kenya, you’d see publications from Wikipedia and top news publishers populating the first few pages of SERPs. That proves the credibility of the company.
However, if you google Affilgo or LTech, you see none of that. There exist no such publications, only ones from review sites trying to reveal the lies behind the companies.
In fact, there exists another company that deals with LED controllers with the brand name LTech which however does not own the TLD www.ltech.com. Guess who owns it? The LTech Company, a partner to Affilgo. It seems like they bought the TLD and launched a fake company under the name.
But it gets worse with Miggester. It doesn’t even seem to exist. The first search result is an article pointing on the company as a fraud. There exist no host website for the company called Miggester.
For a company that claims to be involved in mobile gaming, e-sports and social gaming products used by billions of people daily, you’d expect a better introduction from google.
I also did traffic research and according to SiteWorthTraffic; LTech gets a meagre 180 users a day while Affilgo gets 2800 visitors a day. Absurd for companies with an affinity of mentioning millions and billions whenever they present themselves.
Does the purported revenue add up?
Folks, let’s do some math. At the time of this writing, the company has already hit 7.25 million affiliates. Let’s assume just about 1 million of its members have bought an educational package and are thus eligible for the weekly dividends of 2.5 euros. In fact, this estimation is on the lower end but let’s work with it. Also, depending on your levels, the dividends increase.
With one million members, it means the company must generate at least 2.5 million euros in profits per week. In 2018, BET365, the biggest gambling company in the world reported an annual operating profit of 660 Million Euros.
660,000,000/ 52 weeks = 12.7 million weekly
Now here comes a company from nowhere, suggesting to be making a fifth of profits generated weekly by the most established online gaming and gambling company in the world. While BET365 gets 220 million visitors a month, Affilgo gets 2,800 visitors. How the hell is that possible.
Now that we have established that the revenue doesn’t logically come from purported online gaming and gambling partners, where else should we look at?
Yes! You guessed right. From the membership fees
How Crowd1 really makes money.
As an interested young man, I decided to join Crowd1 and see exactly what it takes before you can earn your money.
First, during sign up, you must register through an affiliate link. This means someone must have referred you through their affiliate link. It’s a program exclusive to invite-only members. In my view, this was the first red flag.
When you log into your account, for the first time, you see packages-display from which you are required to select one and pay for. This is the second red flag I spotted. You join a company, and before they can even introduce you and inform you of the value you can get, they are already asking you to pay for a package.
Upon clicking one of the packages, you are directed to the payment page where several payment gateways are displayed including Bitcoin, Ethereum, Gift, Bank Transfer and Account Balance. I asked my referrer which method I should use and he was quick to advise me to use the Gift method.
This where you pay your referrer through MPesa or Bank using a process they provide you, and the money is deposited to their accounts after which they generate a gift code on Crowd1 portal. The referrer sends you this gift code to activate your account and you are in.
My referrer claimed it was the best method since it happens instantly unlike all other gateways which would take weeks. At this point it was getting clearer, the concept behind Crowd1; a system of exchanging money with those above you in the pyramid and building your network to do the same.
If you don’t pay for any package, you might as well just leave Crowd1 because there’s nothing you’ll be gaining from it. You cannot even earn the dividends or invite new members unless you purchase a package
How does Crowd1 pay Affiliates?
Crowd1 has a funny compensation plan which took me time to understand. Each new sign up gives you a different amount depending on their package level, and your imbalanced points on the left and right legs. You need to refer two members, one on each leg, who must pay for a package each to initiate bonus points.
These Binary bonus points look like this
- White Package – 90 points
- Black Package – 270 Points
- Gold Package – 720 Points
- Titanium Package – 2250 Points
Hence if you manage to refer two members who both purchase the Gold package, you achieve the 1:1 balance and earn 720 points for each.
10 points = 1 Euro
This means you earn 144 Euros.
As you invite more members, you move to the 1:2 balance which pays (720 X 3) earning 216 Euros, then to the 1:3 Balance which pays 288 Euros. If you accumulate points that are not within the 1:3 balance, they are saved for 6 months awaiting points on the other leg.
For instance, if you have 1 member on the left and 4 members on the right, points accrued courtesy of this fourth member on the right and any other below him/her will be stored for 6 months rather than paid instantly.
This, therefore, means you should get new referrals and place them under the shorter leg and grow it until the ratio stays within the 1:3 balance to earn well.
Also, with a 1:3 balance, if you have a considerably longer leg and you introduce a member in the shorter leg, you get to earn the bonus of the new member plus 3 times the bonus points existing in the longer leg.
Now, how does your recruiter and their recruiters earn?
This is possible through the matching bonus where you earn 10 % of the affiliate bonus a member you have referred earns.
For instance, if you introduce someone who pays for the white package, you earn 36 Euros and your referrer earns 10% of your earnings which is (3.6 + 36). This 36 Euro was cut from you when you paid for the same package. The cycle continues.
Also, your matching bonus depends on your number of personally sponsored members and you can earn the 10% commission several levels deep depending on the package you purchased as shown below.
There are so many details beyond this basic explanation such as Fear of Loss Bonus, Streamline Bonus and network levels among other things which would take a day to explain but my plan wasn’t to explain how it works. For more comprehension check out this YouTube video.
What Crowd1 really is.
In general, this is a pyramid scheme. According to Wikipedia, a pyramid scheme is
“A business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products.”
Pyramid schemes are a type on the multilevel marketing which base their revenues on recruiting new members into the program. This system works very perfectly in terms of growth. That’s why within just 1 and a half years, Crowd1 is approaching tens of millions in membership and this is just the prelaunch stage.
They haven’t yet started introducing actual products for its members to sell. Yet they claim to offer digital products through its educational packages. That the first perspective they want you to get
But the idea is to grow the network big enough such that at some point they can approach companies and convince them to pay to have their products and services to be promoted in the network.
The problem with this kind of structure is that it is unsustainable. The fact that it depends on the exponential growth of members to sustain its revenue is its first undoing. Because at some point, the number of members required to join for everybody to make a living, surpasses the world’s population. This unsustainable exponential progression of a classic pyramid scheme is best illustrated with this figure.
Crowd1 claims it addresses challenges of long-term sustainability and will be the future of marketing. But when you take a good look at the structure of the pyramid, it screams failure from the very beginning, just like any other pyramid scheme before.
History of the Founder
The CEO of Crowd1 Investment is Johan Staël von Holstein, a Swedish entrepreneur and venture capitalist with a history worth reviewing. Wikipedia says quite some good and enviable things about this man, but as the wise saying goes; one bad apple spoils the barrel.
Johan is fond of starting companies and dumping them or winding them up when things get tough. They start very well with high expectations, raise a lot of capital and employ lots of people. However, within a couple of years, some become insolvent and are rounded up while others are just shut down
In 1995, he founded Icon Media Lab. At its peak, it had 3000 employees. By the end of 2001, the company was debt-ridden and had to be bought by another company to survive. Hundreds lost their jobs, Johan moved on to the next venture.
He founded LetsBuyIt.com an online price comparison platform. During its initial public offering, it raised $60 million. In March 2002 it declared bankruptcy. In 2004, Johan founded IQube, at least this went on well, but he shut it down in 2009 due to the recession.
He also launched MyCube, a digital life management tool for exchanging, sharing and selling content. The idea was revolutionary to an extent that it raised $8 million in funds. Shortly after it went on voluntary liquidation.
And guess the next venture by Johan? Crowd1.
Johan Staël is a very knowledgeable and creative person. He dreams big and gathers all resources to actualize his dreams. However, he’s not ready to push something until the very end. He is fond of hopping from venture to venture despite having promised to change the world with his ideas.
With Crowd1, I think he hit the jackpot of dreams and this might just be the most exciting part of his life. Now millions depend on him to fulfil their life dreams.
Do you know what will happen when he realizes a pyramid business model cannot be sustainable for long? He will pick up his wallet with loaded bank cards and disappear.
The Story and Facts behind pyramid schemes like Crowd1
Multi-Level Marketing systems have existed for centuries. Pyramid schemes and Ponzi schemes, almost synonymous, have been around for long even before they found a name. Yet they still work up to date despite the havoc they result in people’s lives. They won’t disappear either in future, rather, more sophisticated forms of pyramid schemes will be formulated.
The most fundamental idea behind the effectiveness of pyramid schemes success is the selling of a hope/dream. Humans are desperate beings who would do anything to get whatever makes them happy and if you formulate a concept that promises them this happiness with little or no effort at all, you’ve just created an irresistible bait.
They start with one man promising two people that if they pay him this amount of money to join his network and encourage other people to do the same, they can earn continuously from the premiums paid by new members joining the platform.
Anybody who joins the network is obligated to introduce at least 2 other people to make a profit from their investment. They go out and preach the gospel vehemently to ensure someone joins them and pays.
As the pyramid grows, the people at the top reap great incomes and begin to flash their luxurious lives on social media to woo people into the network. Obviously, it’s easy for them since they are living evidence of the success accrued from the network.
So, people join with the hope that one day they can be like their mentors. Most of them are usually sceptical but the success of the founding members blind them. It becomes irresistible. They sell their assets to pay the cost of joining the network and start pestering relatives and friends to do the same.
When the growth rate flattens, however, and a big percentage of the members in the network cannot recruit more members, no revenue is generated and the pyramid collapses.
The site begins to crash and experiencing technical issues especially when trying to withdraw money. Then one day you wake up only to find out that the website has disappeared.
According to a report that studied the business models of 350 MLMs, published on the Federal Trade Commission’s website, at least 99% of people who join MLM companies lose money.
While a few individuals who joined a Crowd1 in the early stages will make good money from the network, at least 90% of the members will eventually lose their money when the scheme collapses.
However, if you don’t understand the seriousness of that statement, revisit history. In 1997, a country was brought to its knees by pyramid schemes. The Albania rebellion was a period of civil disorder when the gun ruled the land after pyramid schemes collapsed and its leaders disappeared with the life savings of citizen.
Albanians took to the streets demanding the government to reimburse them and riots broke out. The government was overturned, countries evacuated their citizens from Albania and by the time the unrest was over more than 2000 people had been killed.
That’s what happens when you crash the hopes of a people.
What will happen with Crowd1?
Pyramids schemes are typical for promising heaven on earth. They are simply too good to be true and are mostly created and launched in eras when the people are most vulnerable. They target a deep desire within its target populace.
As Wikipedia puts it
“The main sales pitch of MLM companies to their participants and prospective participants is not the MLM company’s products or services. The products/services are largely peripheral to the MLM model. Rather, the true sales pitch and emphasis is on a confidence given to participants of potential financial independence through participation in the MLM, luring with phrases like “the lifestyle you deserve” or “independent distributor”WikiPedia
LuLaRoe, for instance, was founded on the idea of an independent stay-at-home woman who can earn unlimited income from selling products and referring new members into the network. The concept of stay at home while earning woman was an admired lifestyle by many women. LuLaRoe sold this dream to them and millions bought it.
Crowd1 is not doing something far from that. Crowd1 investment is selling the dream of a youth who earns a corporate income while at the comfort of their home, doing simple tasks while enjoying their lives. That’s what every young person want especially during this Coronavirus period; sit down and earn comfortably.
So, many will join, and the network will grow. Some will ask for loans, others will sell assets just to raise enough money to join with money they cannot afford to lose. They will buy a package and begin to look for recruits.
A small percentage will manage to convince two or three people, but most will find it hard even to explain what going on. But their mentors who are making hundreds or thousands of euros daily will be their motivation.
They will champion on enthusiastically. They will protect the name Crowd1 and fight whoever criticizes the company and proclaim it as the best company in the world.
But one day, one beautiful day things will turn for the worse. The rate of people joining the network will flatten, and suddenly the company will no longer be sustainable. No one else will want to join. That’s when people will panic.
People will rush to withdraw their money but it will not be possible. The founders will be in the Maldives popping champagne, 10 % will have made back some profit, but 90% will have lost everything.
Where is Crowd1 Banned
In conclusion, let me just list down some instances where Crowd1 has been banned or criticized for various reasons by top leaders in the direct selling industry and governmental agencies.
New Zealand (Financial Markets Authority) – “We recommend exercising caution before dealing with Crowd1 and Impact Crowd Technology S.L. as they are not registered companies or financial service providers in New Zealand”
Philippines (Securities and Exchange Commission) – “Those who act as salesmen, brokers, dealers or agents of the said entity in selling or convincing people to invest in the investment scheme (Crowd1) it is being offered including soliciting investments or recruiting investors through the internet may be held criminally liable under Section 28 of the SRC”
Namibia (Bank of Namibia) – “The core business activity of Crowd1 is to introduce new members of the public to its business practice. Participants who join as members are encouraged to recruit new members through promises of bonuses and additional owner rights. The primary source of income for Crowd1 is generated through the recruitment of new members.”
Mauritius (Financial Services Commission) – “The FSC hereby informs the public that Crowd1 and/or any individuals/ representatives or promoter groups operating under this name are not and have not, at any point in time, been licensed and regulated by the FSC.”
Gabon (Ministry of Economy and Finance) – “ The Ministry of Economy and Finance recommends that the public avoid using the online services called Crowd1 and Coffre 2 lux, which are successful through the supply of particularly questionable investment products”
Meanwhile, the gambling companies which Crowd1 claims to have a partnership with have declined any involvement with the company. Crowd1 is now desperately looking for other ways to sustain scam until its natural death happens.
I wish to request every person who cares, to desist from Crowd1. Kenyans especially are must be careful since it was introduced recently. It’s not a worthy investment. You’d rather learn other legit ways of making money online. There are enough red flags on Crowd1 which should scare you from the very beginning.
I think the slots for the early members who will constitute the 10% that will at least break even when the pyramid collapses, are already full. With close to 10 million people, this is a bad time to join the club, you are likely to be on the losing end.
Desist or you will cry.