Thursday, March 10, 2016

Why Did Thrive Learning Institute Fail? Lessons to Learn...

(Thrive Learning Institute Fraud artwork by Don Hankins @Flickr)

Where Did Thrive Learning Go Wrong?

Well, it started with how they were set up.

I had a long phone interview some years back with a guy who went by "JoeBlow2000" in the forums. He's long since quit visiting there, but many of his posts are still around.

And you can take what follows as hearsay.

Dave Rasmussen used to work for Joe at a big online training company in Utah. That's where Rasmussen learned the ropes.

In that day, all online training was completely in-house. The only scene outside was some of the independent lead generators. All your sales, fulfillment, and CRM was internal, which meant that quality issues could be handled quickly.

Dave left Joe's mentoring and apparently tried to take some of the training materials with him.

He got in with Colton Moody as a partner to bankroll Thrive Learning. But it was always only a fulfillment operation. They just delivered training. If they had complaints about the sales floors, they would have to contact the independents and go over it with them.

As Thrive only got 10% of what was charged, they relied on the sales floors to be honest (a losing battle) and also to make up their income by upselling their clients with additional services. This is how a $6,000 investment could spiral up to $14K or more.

Prior to Thrive, the average cost of such training was about $4K. Per Joe, that was carefully worked out according to their experience of what people would pay and stay happy.

When Rasmussen raised it to $6K, it obviously attracted the independent sales floors, which took about 40% off the top. (The other 50%, per memory, went to the lead generator, who was also supposed to get a percentage of any upgrades, but that was a bit iffy.)

With that new higher price, Thrive attracted more sales floors and lead generators, then quickly started turning over millions in sales monthly (and at one point, weekly.)

The stage was set for failure, as customer relations management was inherently faulty.

Where they went wrong - couldn't be helped

They were working on the presumption that only 3% would finish the course, and only 3% of those would make their money back. (Another 3% of those wound up incredibly successful and wound up on the online infomercials and were used to push people to buy.) That model is actually standard for a lot of scammy industries, like what makes online spam financially possible.

That means that there's a potential for 97% to be dissatisfied. Theoretically, only about 3-10% would actually complain, and these would be simply paid off and silenced.

The problems and Thrive's Achille's heel were these:
  • They were teaching people how to use the Internet for research and marketing.
  • Their own marketing was  to pump up Lead Generation by being at the top of the search engine rankings (with tricks that were possible at the time.)

But complaint forums were found to rapidly take over Thrive Learning's standings, regardless of how many weird backlinks they could create. Thrive's solution was to get the complainers to remove their posts as part of their payment - failing that, to pony up legal harassment.)

Their complainers found out that they could start blogs and get on the rankings themselves. Not only could they submit a complaint online to Utah state, but they could also recruit other people to do the same. 

So a minority few people then started ranking for what they learned to research online and how to post online, using all the training Thrive had given them. This began a small movement of people who banded together to support each other's posts on complaint forums, comment on their blogs, and basically "complain like hell" everywhere they could about Thrive Learning and their principals.

Now, those few complainers looked like the majority opinion about Thrive. 

As more and more people complained to the Utah AG office, they became inundated with paperwork - almost all of it was about Thrive.

Eventually, Thrive couldn't keep up with paying everyone off and the excuses to their AG buddies didn't hold water. (It also didn't help that the Utah Governor also had an online complaint inbox, and these complaints were being sent directly there as well.)

So, in 2009, Thrive finally got hammered by the Utah Department of Consumer Protection office. All their other attempts at settling didn't work.

By 2014, they had quit.

Thrive Learning was started in April 2006 and were mostly out of the business by Fall of 2009, and gone by 2014.

A failed business plan, obviously. 

What's the Why of Rasmussen, Moody, et al?

Believing and following Get Rich Quick schemes that used shortcuts and treated people like commodities.

Lessons to learn

  1. There is no such thing as "Get Rich Quick."
  2. Give real value, far more than you are paid for.
  3. Ask only what the market really wants to pay. Then deliver in excess of that.
  4. Be honest.
  5. Be accountable at all levels.
  6. Go the extra mile and avoid quality and customer service shortcuts like the plague.

Can Thrive Learning Institute be reborn?

In short, no. But nothing of the original still exists. Everyone has moved on, and the phone number and training materials were taken over by a different company. 

Since the name is now open again (the trademark office notes some 75 entries with the word "thrive") it is possible to use this as a learning experience for everyone. 

While it would be smart to avoid that name at all costs, funny enough, it could be a viable marketing campaign to start a new company that builds on apologizing and starting fresh with lots of giveaways to former students. 

You'd have to:
  1. Keep everything in-house. All under one roof.
  2. Start with materials first. Give these away for free or low cost.
  3. Make a name with the quality of materials and open-handed help.
  4. Start free online courses as a sample.
  5. Build a list of qualified, interested potential customers.
  6. Get into coaching only if it looked like this was feasible.
  7. Once a paid program was established, use affiliates for lead generation.
It is possible, if you start from the beginning with an honest content marketing approach, avoiding all GRQ approaches and people with this mindset.

If I find out about anyone attempting this, I'll let you know...