“Kool Aid Man” by Source. Licensed under Fair use via Wikipedia – http://en.wikipedia.org/wiki/File:Kool_Aid_Man.jpeg#/media/File:Kool_Aid_Man.jpeg
Vince Martin, CEO of BigCrumbs & MainStreetSHARES was not too happy with the Kool Aid reference in the March 31 post on this blog, Pass the Koolaid! Another E-mail from BigCrumbs/MainStreet Shares. Mr. Martin did take the time to post a comment, and even added a bit of levity, calling himself the Kool Aid Man, and a bit of wry sarcasm, asking me which flavor Kool Aid I am drinking. I still have no intention of investing in the new venture, but thanks for stopping by, Vince. And, for the record, I prefer Fruit Punch flavored Gatorade.
So, without further adieu, here’s the response from Mr. Martin:
Hello Kat!
Vince, from MainStreetSHARES, here (a.k.a.The Kool-Aid Man). I don’t typically comment on blog posts, but since MainStreetSHARES is so new that your post currently appears on the first page of Google’s search results for us (congratulations), well, how could I resist?! So, I’ll just add a little something to the “conversation”.
Kat, I actually think it’s amazing that other companies can convince people to accept (and even demand) a simple rebate that is actually a small fraction of what THEY derive from YOUR total value (i.e. additional commissions, *your* data, *your* eyeballs, etc.).
So, I’m not sure it’s a matter of *whether* you’re drinking Kool-Aid, but a question of which flavor you prefer! I believe that, with just a little math, I can objectively say that our flavor is better than even Purplesaurus Rex. OK, that may be an overstatement. Nothing is better than Purplesaurus Rex. But, it’s at least as good.
Regarding complexity, when people are able to get past the idea that they only deserve a little cash back, it’s really simple: we’re giving our members a share of our TOTAL company revenue, based on how much they spend each month. The percentage they earn is equivalent to their percentage of total member spending, which we show them on the site. Easy.
Of course, we’re also giving them msSHARES as mentioned above. It’s all really basic math (i.e. just simple percentages) that anyone can get, and I’m sure we’ll continue to refine the explanation to ensure that simplicity is obvious. Still, it’s a new concept and we’re giving people a lot, so we’re pretty sure there will be some who don’t get it (or want to get it) at first. We call them “late-adopters”!
Interesting side note: when we launched BigCrumbs, there were some who complained about complexity (and miscellaneous other things). We then proceeded to turn it into a multi-million dollar company that earned the business of even (or especially) the most discerning individuals (thanks for your membership, BTW).
Well, Kat, thanks for giving me a little (more) space on your blog! Unfortunately, I have a few more brick walls to burst through, so I won’t be able to continue the conversation here. But, if you have any specific questions or comments, or just want to say hello, we’d absolutely love to hear from you! You can reach us directly via the Help link at the top of our site.
In fact, our favorite meal consists of a healthy plate of constructive feedback which, of course, we wash down with a tall glass of ice-cold, well…you know.
Kindest Regards,
Vince Martin
Founder, MainStreetSHARES
A New York frequent flyer who elegantly combines her passions for worldwide travel, running a gazillion marathons all over the globe and staying fit ... without sacrificing her fancy for good wine and food.
I got the email from BigCrumbs too. Since I was not a big user of the site, I read it quickly and didn’t pay much attention, but I do think his comment on your blog is pretty impressive – well written, a bit self-deprecating, funny. I may indeed stick to cash back over shares, but after reading his explanatory comment here, I might just give MainStreetShares a second look. I too wish Vince the best!
Million dollar company my arse. If it’s worth millions then sell it while it still has any value and distribute it to BC’s supposed shareholders. This idiot CEO or whatever he calls himself needs to brush up on financial theory and how shareholder value is actually generated. Value isn’t created by trapping free cash flow in an illiquid investment. Shareholder value is destroyed by companies that trap free cash flow instead of distributing it back to shareholders. Furthermore value is destroyed by lack of transparency and frictional costs. BC couldn’t compete with portals like TCB that distribute 100% of the commission. How exactly is value created here? By forcing users to invest in a non-transparent and illiquid investment and hoping that an even more clueless investor would eventually buy it? How are MSS users getting more value vs. a portal like TCB that pays out 100% of the commission. MSS users would be getting less to the extent the commission is skimmed off to referrers and the CEO’s pockets. There is absolutely nothing here in Vince’s hairbrained idiotic fantasy that could possibly add shareholder value.
I think you said it all!
“HikerT”, I’m not quite sure why you’re so angry but, your understanding of, and attempt to apply “financial theory” to our company in that manner are misguided. You’re simply wrong. A thoughtful person could spend a day deconstructing your “arguments” with real-world examples, but I’m sure it wouldn’t matter. Further, you’re overlooking that any cash back site that “gives you 100%” of the retailer commission, is simply extracting value from you elsewhere that you do not share (e.g. advertising, your data, etc).
In fact, if they’re “doing it right”, they are extracting much more value. That’s actually the point. On a related note, a company in the cash back space was just acquired for $1B on only $167.4M in prior year revenue and $13.7M in operating income. Those are lofty multiples and that additional value came from somewhere. Our mission is simply to show people where and give them a share.
But, MainStreetSHARES is clearly not for everyone, and that’s really OK (expected, even).
So, there’s no need to punish yourself and stew in anger. I invite you to instead use the Help link at the top of our site and request that we cancel your account. Per our terms, this will also cancel the msSHARES agreement and the additional value that you don’t believe you have contributed will simply accrue to other members. I will direct our support team to expect and expedite your request.
I’d thought I could post here to help clarify what we offer and even have a little light-hearted fun with skeptics. But, if there was any doubt before, it’s clear now that it’s anything but “all in good fun” and that I’ve wasted my very valuable time. Apart from the much-appreciated second-look from Elaine, spending my good will here has obviously been a mistake, as this “discussion” has quickly devolved into something that is well beneath me.
Sincerely,
Vince Martin
CEO, MainStreetSHARES
Vince, you seem to believe that investing in a risky venture somehow adds value. If someone want to throw money at venture capital they can adjust their investment portfolio to the desired risk/return profile with fewer frictional costs and superior diversification than your MSS wet dream. To the extent MSS is paying out less than 100% of the commission it will have higher frictional vs. portals (cough TCB) that pays out 100% of the commission. BC was at a disadvantage to other portals due to having high frictional costs. The commission was skimmed 3 ways (x% profit, y% to referrer 1, y% to referrer 2, so only 100 – x% – y% – y% was going to the purchaser). This meant BC was at x% + y% + y% frictional cost disadvantage to TCB. Now, you might argue that some of that x% would be shared with members at the time of the wet dream IPO. But you still have the issue of those lifetime referral commissions (frictional costs) of y% + y%. The way to add value here is to just distribute 100% of the commission to users like TCB does and let them invest the money however they want? If they want to throw it at a venture capital wet dream they can do that, and they will be better off because have more money to invest.
mainstreetshares is the way to go , the idea is simple and clear but may not be appealing to some, well to me its like winning a lottery here (which company will let you share revenue? )
mainstreetshares does just that, its beyond cash back, i buy a lot online and this is the only way i save money and invest in myself , i have been a member of bigcrumbs for a while so i have so many shares and if the company was acquired now , for 1 billion i would be paid over $30,000
It does not cost anything to try or be part of this new wave. Buy the same things you would buy , but do it smart now (2015…) Invest in yourself.
Paul. Founder of ugunlocked.com
MSS would IPO for a billion? If the prospects are really that great wouldn’t VCs snap it up today? My guess is Vince has tried and the only check he got was a reality check. The portal space is becoming quite saturated and mature. You have TCB paying out 100% of commission. To the extent a portal has an exclusive paying more than TCB or TCB does not cover a merchant there are cash back comparison sites funneling people to the highest payouts and minimizing portal profits. I just don’t see who in their right mind would pay a billion for this. If the members are using it a vehicle for a IPO payout how many are going to be left to use it after the IPO?
BTW, as best I can tell MSS is just a re-branded version of BC with one important change. The BC referral system was 2 deep. The new system is 1 deep *but* only for new members. This means if you were a BC member who was referred by someone who was referred by someone then the “shares” you earn from purchases are diluted *twice* as much as they would be if you had been referred as a new MSS member going forward. Furthermore if you had *not* been referred (under either system) the shares you earn are not diluted with each purchase. It’s really too bad that MSS didn’t scrap the lifetime referral system. It really adds to frictional costs and puts MSS at a significant disadvantage to its competitors in terms of the commission they can pay out (in addition to the dilution of shares). It always used to crack me up when the BC pimps would suggest that it didn’t cost anyone to use their referral link. Not true!
LOL, I wonder how many people continued to be suckered?
http://www.doctorofcredit.com/mainstreetshares-aka-bigcrumbs-shuts/
I can’t believe they lasted as long as they did.
Hiker, love your prophecy.