For those of you unfamiliar with multi-level marketing – think Amway, NuSkin, or Pre-Paid Legal. It is any company that uses a pyramid or multi-tiered structure to sell products or services. Other people refer to them as pyramid schemes, get-rich-quick schemes, or simply “don’t answer the phone, it’s the Smiths with another ‘business opportunity’.” How does this have any relevance to social networking, you say?

Having been involved in several multi-level companies before, I have always found the human dynamic more interesting than anything. People get into them because they think it is easy money, but then spend more time and energy than they would in a real 8 to 5 job. But I digress.

What intrigues me about multi-level marketing are the serial MLMers. These are the people that go from company to company, dragging their ‘downlines’ with them. Whatever the next hottest thing is, there you will find these MLM addicts. With each change, there is some attrition in their network, but they simply recruit and plug people right back in.

Therein lies the similarity. I have noticed that as a new social networking technology appears, the influencers make the jump and drag their ‘downlines’ with them. There is some attrition, but they network and fill in those holes. It follows the traditional Diffusion of Innovations model introduced by Everett Rogers and later popularized by Geoffrey Moore in Crossing the Chasm (also known as the Technology Adoption Lifecycle). The innovators make the jump, followed by the early adopters and then the early majority.

I saw this phenomenon with Twitter. Traditionally, I am an innovator when it comes to Web 2.0 technology. However, Twitter struck me as something with very little usefulness. First of all, I don’t even find myself mildly interesting, let alone do I expect others to. I held out thinking it might just go away. After all, what is the business application in MicroBlogging?

Well, I recently made the plunge. It’s like voting, you don’t have the right to complain about elected officials unless you voted in the last election. I figured the same was true with Twitter – I can’t complain unless I have sampled the wares. What I found was interesting to say the least, but we’ll leave that for another post.

The gist of the matter is that social networking accurately reflects the dynamics of network marketing in the sense that once your group bands together, you follow each other from technology to technology. My recommendation: find a couple of Web 2.0 influencers and follow them around like a little step-brother. Stay in touch with what they’re doing and if you find value in it, take the plunge.

What other correlations do you see between multi-level marketing and social networking?