Former BurnLounge Intern Recalls Company’s Multi-Level Cluelessness

Jun 15th, 2007 // Comment

burnlounge.pngOur earlier call for tips on BurnLounge, the multi-level music marketing company that just got whacked by the Federal Trade Commission, garnered this tale from a former intern, who quickly picked up on the CEO’s lack of music-industry experience–and his co-workers’ utter confusion at how BurnLounge’s paid-recruitment scheme worked. We’re still looking for more tales from the frontlines, so if you’ve got dirt to share, drop a line. For now, let’s cede the floor to the ex-intern:

I was looking to break into the music industry, so I figured, why not try to get in the door with what appears to be a quickly growing start-up? The executives promised me and the other interns that we were on the fast track to a permanent position and big things in the music industry.

I guess the first sign that something was wrong with the company was when I met the CEO, Alex. He introduced himself to us and went on to brag about his Multi-Level-Marketing experience, including his big success story of turning some cosmetics company into a 9-digit a year operation. While it was great to hear that the CEO had a history of success, it also made me stop to think, “hmmm, that’s odd, he doesn’t have any experience in the music industry?”

Meanwhile, a couple months went by, and the company kept hiring people, but didn’t seem to be interested in hiring any of the interns. Then came the time for the big beta launch. We ended up staying until Midnight that night, manually entering the personal info of the beta users into their accounts. Two things stood out to me that night:
- No one had any idea how the Multi-Level-Marketing scheme worked. It was literally so complicated that not even the top executives, who were there with us entering the data, knew how it worked. We had to stop and re-do everything, just because no one knew what was going on.
- There was no way on earth that these people were going to make money. I looked at what these people were paying, and did some quick calculations in my head that they were going to have to sell around 10,000 songs a year to break even. And then I noticed that after creating an account, I was creating another account for that person’s wife/brother/best friend right underneath that account in the pyramid scheme. Think about it for a minute – how are you going to sell 10,000 songs when the people that would be most likely to buy music from your store run their own store? Do you know 100 people that are going to purchase 100 songs each from your store every year? Are you going to be able to convince random people to buy music from your store rather than someone else’s store, or from something like iTunes? Not likely.

Needless to say, I left the company soon after that. In addition to it being a complete scam, it was clear they had no intention of ever hiring any of us interns. I’ve since removed it completely from my resume, I’d be embarrassed to even be associated with the company.

FTC Asks Court to Shut Down Illegal Pyramid Operation [FTC]

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