Pyramid Schemes, Gas Prices, and College Tuition Price Transparency

Named for their pyramidlike structure, pyramid schemes are businesses whose primary revenue stream comes from recruitment fees that new members pay to join, rather than sales from the business's product or service. Pyramid schemes often sell products or services directly to consumers. Because recruiting new sellers theoretically increases the total number of sales, pyramid schemes incentivize senior members to recruit new participants, who pay a registration fee. Some of that fee covers the initial business costs, like inventory, but the majority is divided and sent up to senior members (called uplines). 

> How multilevel marketing companies defend themselves against being classified as pyramid schemes. (More)

As more people join, the company becomes more layered, and the payments at the top keep rising. While pyramid schemes often sell products like energy drinks or supplements, they can also be donation chains or even structured as a game. 

> Learn about the famous "airplane game" pyramid scheme. (More)

> How one company used pyramid scheme-style recruitment tactics to target college boys and sell energy drinks in the early 2010s. (More)

Pyramid schemes are illegal in the US, but pyramid-shaped multilevel marketing companies (such as Mary Kay, Amway, LuLaRoe, and Herbalife) are legal. A company is considered an MLM rather than a pyramid scheme if the primary source of its revenue is product sales rather than registration fees, and most products are sold to customers outside the company. An estimated 99% of people who join MLMs never make any money.

> Why 100+ women who left fashion MLM LuLaRoe filed for bankruptcy. (More)

> Home goods company Amway is the largest multilevel marketing company in the world by revenue, generating more than $7B annually. (More)

Discover more: 

> The 1870s woman who ran a Ponzi scheme disguised as a bank by women, for women. (More)

> A hedge fund took a $1B short position against supplement MLM Herbalife after discovering that 82% of the company's distributors never made a profit. (More)

> The namesake of the Ponzi scheme, Charles Ponzi, made an estimated $15M from running a fake international arbitrage scheme in the 1920s. (More)

In partnership with Shopify

Indie Publishing Is Having a Moment

Books are so back, and the proof is everywhere. Book fairs are pulling tens of thousands of attendees, and indie publishers are growing without investors. A few years ago, bookstores and zines seemed to be losing ground. Now the tide is turning, and digital infrastructure is putting power back in the hands of small publishers. 

Publisher Vivian Sming chatted with Shopify’s In Stock, a Substack featuring real stories from the front lines of entrepreneurship. Sming, the founder of the independent publishing studio Sming Sming Books, takes Shopify through the impact of AI on independent publishing, the explosion of book fairs across the globe, and why books are stubbornly resilient in 2026. 

Subscribe to In Stock right here for more entrepreneurial stories like this.

Please support our sponsors!

 News in Context 

1440 brings you the knowledge and context behind the week's stories:

Gas prices across the country fell this week after the US and Iran announced an initial agreement to end the war that would reopen the Strait of Hormuz, although the strait remains partially open. (More)

> Crude oil's price accounts for roughly half the price displayed at the gas pump.

> See where the 100 million barrels of crude oil the world consumes daily end up.

Leaked documents recently revealed that OpenAI, ahead of its initial public offering, is losing billions of dollars each year. (More)

> OpenAI initially focused on novelty projects, like training bots to win video games.

> The story of how ChatGPT was conceived over dinner at a Silicon Valley hotel.

SpaceX's stock shook off a three-day selloff streak, which erased roughly $400B in market value, ending Tuesday back above its debut price of $150 per share. (More)

> SpaceX was built to achieve Elon Musk's vision of making humans an interplanetary species.

> Read a timeline of all of Elon Musk's business ventures.

Sustainable clothing brand Reformation—which was acquired by private equity firm Permira in 2019—is preparing to IPO as soon as this summer as many private equity firms hunt for ways to return cash to investors. (More)

> Permira is among the world's top 50 private equity firms by capital raised—see the rest here. 

> Cheap debt and relatively minimal regulation have fueled private equity's expansion in recent years.

One Story We're Taking Stock In

For the 2026-27 academic year, Washington state's Whitman College will begin operating under a new pricing rule: Annual tuition will cost no more than 10% of parental adjusted gross income. The policy is just one answer to a question almost as old as the US higher education system itself: Why can't students know how much it costs to attend a college before they go through the trouble of applying?

Whitman is among a growing number of universities that seem to be hoping increased price transparency can help lure more upper-middle-class families back into their application pools. Many of these families make too much money to qualify for need-based financial aid, but also can't afford the increasingly high price of college. Whitman's annual list price, for instance, is close to $90K—but only 6% of its 2025 incoming class paid the full amount. The feature story below, one of the most interesting we read this week, dives into the future of opaque college pricing. 

> The latest in college pricing: tuition at 10% of your income. (More)

> Why college sticker prices are often misleading. (More)

🫶 Humankind: After being laid off, a California woman opened her own business and saved $24K to launch a creative craft festival in an old Joann Fabrics store.

In partnership with Shopify

Unlikely Ideas, Big Success

Floppy disks. Bottles of Tums. Shipping straps. These are just a few of the everyday things that Nik Bentel has turned into quirky, covetable objects through his company, Nik Bentel Studio ... and the catalog only keeps getting weirder.

On In Stock—which features real stories from the front lines of entrepreneurship—Shopify talked to Nik about where he gets his ideas, how he determines which ones are worth pursuing, and how in the world he actually makes his creations. Get the full story right here, and subscribe to In Stock for more entrepreneurial stories like this.

Please support our sponsors!

 Etcetera 

> The largest US airlines by market share, visualized.

> How was the term "death tax" popularized?

> David Ogilvy's best advertising advice.

> How much you should tip in different countries around the world.

> The story of Fort Knox, which was originally built as a secure facility for the US Treasury's gold reserves.

> How the Social Security Trust Fund surplus has historically been used. 

> Nike cofounder Phil Knight didn't always love the brand's swoosh logo.
 

> Are CD ladders a good investment strategy?

> With a "Social Network" sequel coming out, find out what Zuckerberg thought of the original film.
 

> Steve Jobs's early years included a summer job at HP.

> What causes economic bubbles?

> The average salary of a Harvard MBA grad is almost $200K.