In an effort to counter the Internet criticism of his business practices and business support materials, Executive Diamond Orrin Woodward of Team of Destiny ^® has composed a rebuttal titled "Complementary Businesses", which a site visitor sent to me. In his argument he compares the concessions businesses of movie theaters to that of his business support materials businesses. See also Bo Short's comments.

Mr. Woodward explains that there is nothing inherently fraudulent or illegal about the movie theaters exercising local monopolies to charge 300%+ for concessions. Mr. Woodward then goes on to explain Michael Jordan's complementary businesses of product endorsements for Nike, Coke, McDonald's, Wheaties and others. All these additional business are described as "piggyback" businesses, which might even generate larger profits than the original business, as is certainly the case for his Quixtar business support materials business.

Mr. Woodward states that the critics of this arrangement actually a lack of knowledge of the "Free Enterprise".

Mr. Wooward then accuses his critics of being resentful of his financial success from his support materials business by quoting various others.

"Herbert Schlossberg (a writer on American culture) defined a term called resseniiment that describes the critics so aptly. "Ressentiment begins with the envy for the possessions possessed by another person. ... The result is hatred and the impulse to spite and say things that detract from the other's self-worth."

He goes on to quote:

He quotes the famous Austrian economist:

Mr. Woodward's comparison of the movie concessions business to his business support materials fails to make a logical connection in the goals and intentions of various participants and is completely ignorant of the body of law developed to specifically regulate the multilevel marketing industry.

The theater patron goes to see the movie for the sake of seeing the movie. The theater customer doesn't participate in the profits of the theater or the concessions. Furthermore, the movie theater customer receives no commission for motivating others to purchase the overpriced concessions, nor is he granted a right to earn commissions from the sales of overpriced concession to those he recruits. The movie theater patron is a true "retail customer". To summarize, the movie theater patron never expects to receive a financial reward for going to the movies or from motivating their friends to attend the movies with them.

There is of course nothing wrong from making sales commissions. However, the Quixtar IBO is also granted the right to profit from the sales of those he recruits into the business. The main issues here are the various State pyramiding and chain-marketing laws and how they apply to the Quixtar and its complementary businesses, not the ratio of the complementary businesses' income to the main Quixtar business income. The pyramid and chain-marketing laws were authored to prevent inherently fraudulent marketing schemes. Movie theaters and Michael Jordan will never be accused of violating pyramiding or chain-marketing laws.

In the leading decisions about pyramids and chain marketing schemes, a variety of abuses have been targeted as potential elements of illegal marketing plans. TOD fits many of these categories. One only needs to review the original critical page on TOD to find Mr. Woodward fails to address the pyramiding accusations in his rebuttal.

From the Team Of Destinyâ web page "How the Money Works", IBOs know that if they become successful in marketing the Quixtar products and recruiting others to buy the TOD BSM's that they will be one day allowed to participate in the profits from the TOD BSM's pyramid. Courts have ruled that participants in multi-level-marketing schemes are not considered "retail customers". A MLM business having less than 50% of their sales to true retail customers can be ruled an illegal pyramid.

Mr. Woodward argues that the majority of IBOs do not participate in the BSM's pyramid, therefor the BSM's is not an illegal pyramid business.

The problem with this argument is that TOD IBOs have knowledge of the BSM's income potential. Since, the Line-of-sponsorship systems teach IBOs the virtues of patience, IBOs are willing to wait and work their way up to meet the conditions to eventually participate in the BSM pyramid profits. This is actually no different from a Ponzi investment scheme where one must wait a certain amount of time, or recruit enough other people before the investment will pay off. In most pyramid schemes, the first few levels do not participate in any income for some time, just like the majority of IBOs in TODs BSM's pyramid.

Additionally Mr. Woodward argues, and quotes a famous Austrian economist, that the purchase of the business support materials and participation in their system is a free "economic choice".

IBOs "free choice" in this matter might be biased by lack of information, which is always a problem highlighted in any study of economics. Companies like Worldcom and Enron were adored by their shareholders, until of course their bubbles broke. The stockholders were more than happy with the performance of their "choices" and continued to "vote" the share prices up in value. In these two cases, the people lacked sufficient information to know they were part of a grand deception. The participants in Mr. Ponzi's, and the Quixtar IBO propagated "4Nexchange" pyramid schemes were also very happy with their decisions to participate in the schemes right up until the days the growth stopped and their bubbles too broke.

Due to the lack of verifiable public information relating to TOD's performance, it will be hard for new IBOs to know if they are being deceived by TOD's claims of growth and profit potential. This type of deception, which is an inherent risk in MLM, is one of the main reasons the law has stepped into regulate the industry. See the Georgetown Law article: Dare to be Regulated (5 Meg)

For example, if TOD has such and astonishing growth rate, how come they also have an astonishing low IBO profitability?

Wouldn't it be interesting if TOD would release audited data so that prospect would not have to rely on possible suspect information? Prospects might be subject to the same "rumor, hearsay, and popular belief" that TOD preaches about on their tape, TOD-30.

How long will it take the money losing IBOs to give up and break TOD's "satisfied customer" growth streak? The real test for TOD will come with the inevitable reduction in momentum in their business, just like all preceding "successful" Amway/Quixtar line of sponsorships had.

In summary, the criticism of the TOD business has nothing to do with jealousy, envy or resentment. The criticism has everything to do with possible violation of pyramid scheme and chain marketing laws. Indeed, the only meaningful aspect of Mr. Woodward's "Complementary Businesses" essay is the implicit admission that most of the TOD's income (like the theatre and Michael Jordan) is in the complimentary business. In the case of TOD, that complimentary business is the motivational tools business.