Why I joined the only successful pyramid scheme

A pyramid scheme is one in which the single pillar of its business model is to have each customer (or member) go out and subscribe more members. They then go and recruit more members, and the organization grows at an unsustainable rate until it either collapses or cannot grow any more. This is a central principle of the organization’s business model.

I am referring to Toastmasters. Unlike a traditional pyramid scheme — which traditionally sell a product that it cannot deliver, or share the subscription money with its members — Toastmasters does offer valuable services. I guess I could be more charitable and call it multi-level marketing. Here’s what I mean by the label.

The Toastmasters’s business is marketing. Toastmasters organizes its clubs worldwide according to a hierarchy, with divisions, districts and areas. Each club’s performance is measured in several ways, but is solidified into a program known to its members as the Distinguished Club Program (DCP). More successful clubs get more DCP points than the less successful clubs. There are a maximum of ten DCP points, and the club earns them by helping its members achieve educational and leadership program milestones (the certificates of achievement) and for recruiting new members. The full list of points and how they are earned is given below.

  1. Two Competent Communicator (CC) Awards (Education)
  2. Two more CC awards (Education)
  3. One Advanced Communicator Bronze, Silver or Gold award (Education)
  4. One more ACB, ACS or ACG (Education)
  5. One Competent Leader (CL), Advanced Leader Bronze (ALB), Advanced Leader Silver (ALS) or Distinguished Toastmaster (DTM) award (Education)
  6. One more CL, ALB, ALS or DTM award (Education)
  7. Four new members (Membership)
  8. Four more new members (Membership)
  9. At least four club officers attending two training sessions (Training)
  10. On-time payment of membership dues (Administration)

The points scheme seem pretty heavily shewed to the educational achievements, don’t they? Look closer. All of the education goals are probably attainable in a calendar year, especially from a subset of more motivated members. And in our district at least, we have a great track record of achieving them. While membership points only take up two items of the list, eight new members must join to earn the points. Eight new members in clubs of at least 20 members must join to earn these points. That’s a substantial rate of growth for any club, especially as each club suffers from some degree of members joining and leaving through the year. If a club doesn’t meet the growth requirements for a while, the club is no longer official and is shut down.

The Toastmasters’ product is to improve public speaking and leadership qualities. Its educational program is divided into two tracks, education and leadership. The education track promotes a a novice level of speaking competence, giving its followers practice with essential style elements including vocal variety, body gestures, speech organization, visual aids and emphatically speaking. Advanced communication goals target specific areas of interest, from giving technical speeches, to special occasion speeches, to speeches by management and humorous speeches. In parallel to the communication track is the leadership program. The leadership goals begin with effectively taking on roles in the meeting, to chairing meetings, then progresses to running large-scale projects (such as for work) and taking executive positions at the club or district level. Each of these tasks is meant to increase administrative, communication and leadership qualities. In both educations branches are complete, one reaches the highest achievement called a Distinguished Toastmaster.

Does this change my opinion of the organization? Absolutely not. Does this change my enthusiasm to be a member and perform my executive duties? Absolutely not. The reason my opinions haven’t changed after writing all of this out is because Toastmasters International truly does deliver a valuable education plan, helps foster local and district leadership skills. If a member follows the spirit of the program then they can really improve their speaking, listening and leadership qualities.

1 Response

  1. Hannah Oct 11, 2016 / 10:43 PM

    This is a great article. Thank you. I found this while looking for an article outlining the Toastmasters Business Model. Much like you I am science nerd too, Mechanical Engineer, but may be venturing into a non for profit business idea I had. My idea is similar to Toastmasters but has a different outreach mission. I went to my first toastmaster club meeting today and thought about how much money they must be making while providing a service that doesn’t need much of anything, really…which inspired me even more.

    The fact of the matter is, a business is for profit and this is working by putting people in a safe zone to face their fear. Public speaking is the number one fear people have, death is second. Unlike most engineers, I enjoy talking to people, so I never understood this.

    …anyway, no real point to my comment, other than wanting to share as well.

    Thanks again!

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