My Take on Q-Net

 The success of Network marketing companies like Q-Net is that they are able to re brand themselves from being a product based company to a platform for enthusiastic entrepreneurs who hope to see their returns grow over time. All you need is an initial investment and enough heart to go out and find people with similar tastes for doing business. It, to me, offered a window of opportunity-financially as well as in developing my personality- especially in India, where youngsters who would risk 30K for some business ventures were not that very difficult to find. But something was not right. Something somewhere was being over looked. And I wanted to find it out.

  It starts with the idea that Q-Net is a platform for doing business. I will be interested in doing business with the company only if I get some profit out of it(well that obvious, isnt it?). It means that I pay the company 30k and the company is happy to give me back more than what I had paid it! Why would any company be interested in doing that? Unless it is somehow making profit, a huge amount of profit! Even after paying me more than what i had invested, the company is still making profit! That sounded ridiculous to me. Then I realized that the secret is in the volume of new members joining. The more i have people joining under me, the more profit I will get. If I am able to add an infinite number of people in front of me, then every new member added to the end of that infinite chain would earn me a profit! The profit i earn is infact a part of the amount those new joiners had paid to the company. 

 So what fraction of that new joiners' money did i get? To make that calculation, I placed myself at the end of the line. So I am the person who just joined and is trying to find potential businessmen. Above me, there are infinite number of people, ready to help me find a new member and to share the profits with me. For me to get my first paycheck I need to add 3 each to both sides. Once they are added, thanks to these six new members I will get my first paycheck of 11.5K. Where did this 11.5k come from? Ofcourse from the investments made by my six new apprentices-each of whom had paid 30k each. 

  Now comes the maths part. So I being at the level just above the six new members, the whole of my 11.5k will be paid from their cumulative investment. But does it stop here? No. There are more people above me waiting for their share. So what happens to them? Lets take the person directly above me(let us call him Laloo and let me be on his A side). So for him, all six are on the his same side. So if Laloo need to make his 11.5k, he will have to find another 3 people to be added to his B side. That means, three from my six members and three new members on his B side will give Laloo his 11.5k. The converse would be that only half of Laloo's returns are paid from my six apprentice. If we go one step higher-that is to the person just above Laloo's, we will find that only one fourth of his return of 11.5k is being paid from the six i had added. You will find that as we go higher up, the share of the my six sheep goes on decreasing, and it decreases in a geometric progression pattern. 

 So if there are infinite number of people above me, then the total amount taken out of the investments of the six new members i had added can be represented using the following equation

                          Total Amount = 11.5k * (1 + 1/2 + 1/4 + 1/8 + .......) (G.M with r = 1/2)

                                               = 11.5k *  1 / (1 - 1/2)

                                               = 23k

 It is this amount of 23k that came as a complete surprise to me. It meant that when i help the company to raise 1.8 lakh rupees(30k * 6), it takes 1.5 Lakh as its profit and 23k is distributed as returns for investors like me! Q-Net being a company based out of Hongkong, and with almost zero investment in marketing, almost the whole of this amount flows out of the country. So essentially what i do by investing in Q-Net is help 1.5Lakh rupees flow out of every six people added and in return, I get 23k as reward! I wouldn't have had any problem in such a massive outflow of money, had there been a reason. If Q-Net was being paid for a product that is in demand or for a service that is being sought after, then it would have well been fine with me. But here, the drain of 1.5 Lakh for every 23k is happening for absolutely no reason! I pay the money, not to buy product, but to give 10 percent of it to a few of my fellow men and the rest 90 percent is taken out of the country as profit for Q-Net; and this I cannot accept!

 Venturing into entrepreneurship is always praiseworthy. Entrepreneurs have always been beacon of hope in the society and they form the engine that drives the country forward. But every business should have an underlying purpose. It is this purpose that should motivate us in our venture and not the prospect of making money alone. Money, like food, matters only when you don't have it!

Q-Net Way of doing business

 I heard about Q-Net almost a month back. When it was presented to me for the first time, it sounded one of the most promising investment proposal. If I had enough captial with me at that time, I would have been doing business for Q-Net rather than writing this blog. But today, I look at the way they do business from a different angle and what I see from my current perspective does not look bright. Now I have decided that I dont want to do anything with Q-Net. So what really happened, you would ask. The best way to answer this question would be by describing the two different perspectives I had with the Q-Net style of business.

  Q-Net is a product based company that uses network marketing for sale of its products. It is based out of Hong Kong, and has been in this business for more than a decade. So how does Q-Net sell its product? Suppose you liked something offered by Q-Net and bought it. Now you can also be a sales person for the company. But there is a catch. You can sell the products only to two people and not more! So if A, B, C and D are your friends, then you can sell the products only to two of them, say A and B. So what if C and D also like the product? They cant buy it from you directly. You can introduce them to A or B and then ask either of them to sell the products to C and D. It does sound a bit restrictive method of doing business right? If you have 10 friends who could be potential buyers, they cannot buy the product directly from you. You will have to make them buy from A or B. And if A and B have already found their own buyers, then you have to go around and find who these new buyers are and see if they have sold their products. If not, then you can introduce your friends who are willing to buy the product. Why would anyone take such trouble?

 A major reason why people are willing to take this sort of trouble is the way Q-Net has branded itself. Anyone who buys product from the company is not a buyer for them. He is an adventurous and ambitious businessman. The amount spend on the product is more an investment than the price of the product. So if you buy a product, you are more a business person willing to invest some of your money in a promising entrepreneurship, than just a buyer. The success of Q-Net is that it is able to almost completely erase the buying-product-at-a-price concept from its networks and replace it with invest-for-maximum-return kind of thinking. You come into the network, not to buy the product, but to do a business. And just like any other business, you need to raise an initial investment. As a token of appreciation from Q-Net for doing business with them, they will send you a product worth the amount you have invested. Thus it is a double bonus-not only do you get return for your investment, you will also be given a quality product worth the amount that you invest.

 We saw the image change of Q-Net from a company selling products to a platform to do business. If I am interested in doing some business, how will I get returns for my investment in Q-Net? It is by finding more such people who are interested in business. The more number of people i find interested in investing their money, the more returns I will get. But there is a catch! I can add only two persons as my fellow business partners. If i find any one else willing to do business, they will be added as the partners of my partners(Remember my friends A,B,C and D?). So A and B will come directly under me as new business men and C and D can come in as friends of A or B. It would mean that whatever return I get by adding C and D, A or B(whoever added C and D) will also get a share(In fact they will be more benefited than me!).

This catch means that if I want to increase my return then I cannot do so by adding someone directly below me. But i will have to add the new person below C or D. Thus, to get more returns, I will have to help those who have joined below me. Converse would mean, if i did not find A and B, those above me would help me in finding someone. Thus you are not alone in this business. There will always be someone who is willing to help you in finding a new partner. This spirit of team work will give you a feeling of protection-a feeling that someone genuinely want to help you prosper and help in increasing your confidence and increases your chance of maximizing your profit.

 Now lets see how their business works. I will have to put in an initial investment of 30K(By buying a product, which is mandatory to start the business). Then I will have to add people below me. If i have 3 people each added to my A side(A,C and D) and B side(B,E and F), then I am guaranteed of a remunerative amount of 11.5K. As I go on adding 3/3(i.e 3 each on A side and B side), for each 3/3 I will get 11.5K as my return. The company check for such 3/3 pairs on a weekly basis. So if I add A and B in the first week and they add C,D,E and F on the second week, I will get my 11.5K on my second week. In the third week, there are 4 guys-C,D,E and F- on the look out for prospective business men. If all of them are able to find their partners in the following week, for me, there will be two pairs of 3/3 which translates to 2*11.5K as my return. Thus if everything goes as per the plan, I would be able to make a profit from my investment by the month end! I know it is a bit far fetched. Practically, by the end of the year at least, chance of me finding enough people below me to ensure profit is high.

 If you were expecting me to disprove the above claim, of break-even within a year and profit from there on, then you were wrong! I believe that it is very much possible. I am not here to prove that  Q-Net is a fraud company. In fact, those who introduced this proposal to me were as genuine as anyone could be and were already into this business. I also don't think that they were fooled into it. And I am almost certain that they will get back their initial investment and a lot more profit from this business. So whats really wrong with me? What is bugging me?

 The problem is that I started to look at this business structure from a different perspective. So what is this different perspective? This post has already become too long to include the other side of the coin. So shall we wait for my next post to discuss the reasons why I don't want to do this business even though I find it legitimate, good value for my money and where teamwork is not an option, but a necessity. 

The coming of Aryans

 The first Aryans to come to Kerala were not Namboothiris(Kerala Brahmans) but Buddhist and Jain scholars. In fact by 1AD, Buddhism was a popular culture in Kerala. But with the coming of Shankaracharya, Hindu culture began to spread and slowly Buddhism was almost completely wiped out of the state. During Sankham period, though Aryans made their presence felt, the socio-economic structure that we talked about in the last post were not changed much. It was during the period after Sankhakaalam and 9AD that the society saw a major social transformation.

 This period, between 2-9AD, could be related to the mythological story of Parsuraman. The Brahmans had come to Kerala and had settled in 32 villages( called Ooure or Aadigraamam). {Legend has it that Parasuraman brought 64 Brahman families with him from north to Kerala}. It is believed that most of them came from south Maharashtra region. Even though they were less in numbers, the brahmins reached the helm of socio-economic hierarchy in the state within 6-7 centuries, and this myth that an avatar had brought them to a new land to set up new social order was popularized to justify their ascending to the top of the social ladder.

 But what enabled them to gain upper hand? A major reason was the popularity and spread of Bhakti movement. We have seen that during Sankham period, Buddhism and Jainism had its followers in the state; while most of the Dravidian religious beliefs were based out of kaavu(a place for worship). It is said that during this time, all three cultures had a harmonious existence. But with the coming of Bhakti movement, the influence of these cultures started to wane. The Bakthi movement reached its peak in Kerala during 8A.D when Sankaracharyar traveled across the state(and the country) to revive and spread Advaitha Vedantam. Aryans started construction of temples and were successful in making temples the center of Hindu religion.

  The popularity of temple culture had a deep rooted impact in the shaping of caste system in the state. Brahmans ensured that the running of temples, or at least conduction of rites and rituals inside sanctum were exclusively their right. This helped them in gaining social acceptance and respect. The fact that royalties regularly sought advice and suggestions from religious cleric also helped the Brahmans in moving up the political ladder.

 9AD has a lot of significance in Kerala History. History of Malayalam language begins here. Malayalam calender, kollavarsham started in this century(there are different versions on how and why kollavarsham began). Also the second Chera dynasty, also known as Kulashekara dynasty came to power during this time. The Brahmans had started to play a significant role in socio-economic and political affairs of the state by then. Also the growth of temple culture gave rise to different sects in the society who were dependent on temple. Thus there were chakyars who were actors conducting drama in the temple;varyaars were responsible for financial management of temple chores; marars who were experts in different art forms.  Those nairs who held large area of devaswam land later on became a different sub caste known as nayanaars. Thus we see how temple culture had a major impact in shaping of caste system in Kerala.

 To meet the temple expenses, rulers used to donate land to the brahmins. Such lands that were given to temples came to be known as Devaswam and those donated to brahmins were called Brahmaswam. The rulers did not levy any tax for these lands as they were given for a religious purpose. Also during wars(Chera kings used to have frequent wars with Pandyas and Cholas), brahmaswam and devaswam lands were spared from attack. Slowly local people also started to do bhoodanam for religious reasons, to evade from tax or to protect their lands for foreign attacks. Needless to say, devaswam and brahmaswam lands increased and thus the spiritual heads of the society also became landlords. kshetra kudiyaan  were responsible for looking after the land and they engaged Adiyaalars to do the farming works. Usually the kudiayaans were dravidians while adiyaalars were either Negrito or Australoid races. Slowly the role one played in the land started to reflect his position in the society-Brahmins, who by now enjoyed prominent position in socio-economi-political front were at the top of the chain while Pulayar, Parayar etc. who constituted the Adiyaalars were at the bottom.

 Once the caste hierarchy took shape, was imperative for the upper caste to make it rigid. It helped them remain at the top of the 'food chain'. The customs like aiytham or untouchability ensured that there was no mixing of Brahmins with other lower castes and by allowing only the heir to marry(veli) the feud within the family for land and property was avoided. In the later years, this rigid scheme of things meant that only a very few in the society enjoyed a life of luxury and freedom. For all others life gave only loneliness, suffering, pain and poverty(contrary to popular belief, majority of namboothiris also fall into this group!).

 The objective of this post was not to give an overview of Kerala history, but to discuss how caste system in Kerala originated and to show that it was not a natural transition from the occupational background. In most of the cases, the lower castes were forced into the moulds prepared by the upper castes when it came to occupation. The system was then made as rigid as possible so as to reduce inter mingling to the minimum. It is this rotten system that I refer to when I talk about caste system that existed in India.

PS: Kindly do not take any part of this post personal( saying from the experience from one of my fellow blogger :):)). Since it is a hot topic I have tried to be as accurate as possible. The source for most of the facts given above is 'Kerala Vijnjaana Kosham'. If you find any inconsistencies please point out the same :):)

The Caste System

this article is inspired from a post by subodh(I guess he too wanted something like this :)). It was indeed a bold article and truly he deserves credit for writing up such a wonderful article. But there were a few aspects in it with which i could not agree upon, which resulted in me writing this. The crux of his article was that occupation is the basis of caste system. Though the claim does have merit, it is not entirely accurate. The influx of numerous races into India and their subsequent overpowering and subjugation of the existing race also played a major role in the the rigid caste system that existed in India at the time of independence.

 India is a land of the immigrants. In a major ruling by the supreme court, it said that the original race of the country was actually the aborigines living in the Andaman Islands(http://www.thehindu.com/opinion/op-ed/article1081343.ece)! Different races came to India at different phases of its history. Most of the time, the visitors possessed a better social structure and technical skills than the natives and were able to easily overpower them. Thus the negroid were forced into the jungle by Australoids and whey were subsequently forced to give way for the Mediterraneans (we call the Dravidians, who build the Indus Valley civilization) and they were replaced by the Caucasoid(or Aryans). Most of the times, the new comers pushed the existing race away from the river valleys into the interior of the subcontinent- a reason why Dravidian languages are more prominent in the south and Devanagiri in the north.

 This much of what i said is not undisputed i guess. I refute the line of thinking that there was an occupational structure existing in the society and that went on to determine the caste structure. I believe that it was the racial heirarchey that led to a group taking up an occupation/role in the society. To illustrate my point, let me take up one example-that of Kerala. Similar to other states, Kerala too has its list of 'forward castes' such as Namboodiris, Nairs etc.; 'OBC' (Ezhava, Viswakarma etc.) and Scheduled Castes (Parayan, Pulayan etc). Most of these castes were not formed as a result of the role they played in the society but from their racial background. To understand how the present scheme of caste system came into being in the state, lets go a bit deeper into its history.

 The period between 5 B.C and 2 A.D in Kerala was known as the Sankham period. Though its not where Kerala history starts, for our convinience, we will have it as our starting point. During Sankham period in Kerala, as is the case with all other states in the country, aadivaasi and tribal groups that are now enlisted as the SCs played prominent role in the society. They constituted aborigines and australoid races. They formed different groups called gotras which had their own unique customs and beliefs. Sankham period saw the emergence of agrarian economy in the state and had trade relations even with the Europeans. The social status enjoyed by the aborigines then would have been vastly different from what they experienced later on in 18th and 19th century society.

 The two most prominent castes in Kerala, Nair and Ezhava are thought to have appeared between 3 and 4 A.D. Ezhavas are believed to have come from Eezham, which is the native name of Sri Lanka. They are usually given the credit for popularizing coconut cultivation in the state. Earlier Ezhavas were followers of Buddhism who later on adopted the native culture( i dont say converted to Hinduism as i believe Hindu religion is more an amalgamation of various cultures than a religion in itself). There are many theories on the emergence of Nairs. But i found the hypothesis that they were descendants of nayari tribes of central Asia most convincing. The Naga tribes in other parts of India also trace their roots to Nayaris. The custom of having sarppa kavu(Snake garden) in Nair houses is pointed out as an evidence for their link with the Nagas and Nayaris.

  Even during this time, we can see that the caste hierarchy has not taken a definite shape. This will wait until the Aryans start to have a definite hold on socio-economic-cultural milieu by the 10th century. I dont want to make this post too big to read by including that part here. So we will wait for the next post to see how the coming of Aryans had an effect on the social fabric of Kerala.

P.S: Since I am dealing with a hot topic, i have tried to be as accurate as possible. Please do point out any inconsistent facts in the article.