Friday, October 23, 2009

Is Blastoff Network A Scam?

As the various streams of 'spam' plugging up email, facebook, twitter from Blastoff Network Requests, it only makes sense to investigate this company to determine whether it's one huge scam or not. In this article, I'll do my best to separate the facts, the sources of those facts, and my overall opinion on the matter.

If you don't already know, Blastoff network is part information/social media/computer game homepage and part online mall that gives you cash back for purchasing through their blastoff portal. It also rewards you with cash back on any of your friends' purchases and even their friends for up to ten degrees of separation. Their promise of "free, easy, save money, make money' sounds too good to be true and raises a lot of questions.

My first thoughts..

Who the hell is behind this site?

Is this one giant, glorified pyramid scheme that will end up taking everyone to the cleaners?

Where does this supposed 'cash back' on all of my purchases come from?

How could any company pay out those commissions and still make money themselves?

How big of a 'network' could I really build?

Will I get rich off this thing?

Who is Pre Paid Legals and how are they involved in this website?

I'll do my best to answer all of these questions

1. Who the hell is behind this site?

According to Blastoffs about page (

the CEO is a man named Bill Rodgers. As it turns out, he helped bring auction selling to the internet though what seems to be sites that are no longer online. I suppose there are loads of start-up no namers who don't do something reputable until they lay their 'golden egg.' Is he not to be trusted? No Dallas Cowboy fan should be, but in terms of the information provided, I can't find any reason he couldn't be. If you want to know more about Bill, he's on twitter

The CTO is Doug Gray, former CTO for Travelocity. This guy is not only legitimate but has been attributed for revolutionizing the way online travel was handled. The only thing I find strange is that Doug has an MBA but no degree in engineering. I suppose it's possible but definitely an unlikely candidate for the 'next twitter' as they are calling it.

The list of others consist of Brett Beveridge, co-founder of, Dick Ronchetti, a capital market expert, Bryan Martin, the CFO, Scott Berman-CCO, and Adam Smith.

Is this one giant, glorified pyramid scheme that will end up taking everyone to the cleaners?

For the record, a pyramid scheme is a business where the only way you make money is by recruiting others to the business. Then those people you recruit, recruit others and the money trickles all the way to the top to you. These schemes are usually require some 'membership' fee that you have to pay to sell memberships to others. As you can imagine, with all of these schemes, there are a very few making a lot of money and a great majority making very little if any at all.

The blastoff network is a free site, meaning to be a member you only have to enter your name and email address. Then when you shop through the blastoff portal, you receive money back via the merchant you go through, not the blastoff network itself. I'll explain this more later on how it works. The fact you also get cash back when your friends purchase through the blastoff network portal is what seems to be sounding the 'pyramid scheme' alarm bells for a lot of people. However, because it's free and doesn't require you to enter credit card information or anything remotely sensitive, there is reason to assume it's a pyramid scheme.

Yes, I'll admit, getting overloaded with 'join my blastoff network' requests can be annoying and obnoxious but as a person who's been on the internet for a while, I get a lot of these anyway. Actually in my inbox right now, I have over 300 messages from facebook, 35 connection requests from linkedin, and about 800 other miscellaneous requests from different websites. Thank god for email filters.

Where does this supposed 'cash back' on all of my purchases come from?

This is the easiest question to answer. The money back is coming directly from those merchants you are buying from. How is this possible? Well consider this, every company is willing to spend money to make money. Traditionally this would mean advertising on a giant billboard for x amount of dollars a month. But now, instead of advertising in the real world, most of the companies can afford to advertise online as well. One of the alternatives to actively seeking advertisers is setting up what are called affiliates. An affiliate is someone who sells your product for you and takes a tiny portion of the profit. As long as the merchant's input (wholesale cost + % given to affiliate) is less than their profit, they are making money. There are thousands upon thousands of affiliate sites on the internet and this is exactly what the blastoff network has done but on a much larger scale.

However, instead of taking all of the affiliate profit for themselves, they distribute it throughout the networks. So for example let's say you shop through and you come through the blastoff network and buy a $25.00 book. Let's say that as an affiliate, the blastoff network makes $2.00(8% back). Of that $2.00, you the person who bought the book might get $1.10 back, blastoff might take 1o cents and the rest gets evenly distributed to the people in your network who you were referred through. So you can see, the merchant (Barnes and Noble) makes profit, the blastoff network is making a tiny profit, the people in your network are making a tiny profit and you the consumer are getting a discount in the form of cash back from whatever purchase you made.

The only problem I see with this is that you can usually get the same product from a different merchant at a much cheaper price. Buying the super 70' PLASMA DL200 off of may give you 6% back on the blastoff network but it's possible to buy it through a variety of other merchants selling it even cheaper. However, the sheer volume of merchants in the Blastoff network does make it very convenient if you are wanting to buy something.

How could any company pay out those commissions and still make money themselves?

I kind of already answered this in the last question but I'll elaborate a little more. The blastoff network will take a tiny commission off any purchase you make. Again this money is coming from the merchant and not an 'added' cost. The more people that are on the blastoff network, the more they will be shopping and the more money they will make. Even though they may only make 10 cents off your purchase, if you've got a million people purchasing, it can add up very quickly. The Merchants have no problem because as long as people are buying and they aren't spending more than they are making, it's a win/win.

How big of a 'network' could I really build?

Though you might not have hundreds of thousands in your network instantly, if you invite 3 people and they invite 3 people, all the way 10 degree deep, you'll have 590,000. Though it might not happen exactly like this, it is possible to grow a very large network over time.

Will I get rich off of this?

Though it may seem like an internet pipe dream, it is unlikely you'll be able to quit your day job just by building a blastoff network. In terms of commissions we're talking pennies and even possibly fractions of pennies. However, the more people in your network, the more you can make, so it never hurts to spread the word.

Who is Pre Paid Legals and how are they involved in this website?

I just in fact learned about the company Pre Paid Legal last week in lieu of the blastoff network. I could tell you about pre paid legal, but I feel this guy does a much better job than I could do.

"Prepaid Legal: you can pay a monthly fee to have access to attorneys for certain pre-defined legal issues and have identity theft protection. Think of AAA or health insurance…except for legal stuff and ID Theft. Pre-Paid Legal is another company that you can find a lot of positive and a lot of negative about on the internet. But…unlike Blastoff, they are publicly traded on the NYSE, so you can do LOTS of research on them. This is good too, because it means they have to report to the SEC and other commissions which pretty much forces them to be on the straight and narrow. It also is a positive for Blastoff, because if Blastoff does turn out to be a shady deal, Pre-Paid Legal has A LOT to lose…so you’d think Pre-Paid Legal has probably done some extensive homework.

If you didn’t go watch that video, here is the synopsis according to that video if you join as a Pre-Paid Legal “associate”:

  • Get paid on 20 levels instead of 10
  • Get paid on legal plans that people buy through Blastoff
  • Introduce Blastoff to all your friends, family, neighbors, loose acquaintances…etc. before anyone else can get to them

The 20 levels could be a big deal. I’m sure they’re paying half the commissions at each level, but if your network was 100,000 at 20 levels instead of 10,000 at 10 levels, you’d probably make more than double all other things being equal. There’s no real way to know if anyone will actually buy a legal plan through the site, but there’s no reason to think that no one will either. The biggest of those three is really getting the head start I would think. Since people will only sign up for Blastoff once, if someone invites your Aunt Sally who buys everything online…she wouldn’t ever be able to be part of your network…so that could be a big deal."

Conclusion: I don't know if blastoff network is going to be the 'next twitter' or 'bigger than google.' However, it is a fairly robust website that does offer a lot of value. And it's free to use.
Time will tell to see if it lives up to the hype it has generated.

I've just signed up. Here is the link to my page where you can sign up if you want to