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November 17, 2018

Firm creates model to make wealth out of consumption

An Orange Telkom Kenya branch in Nairobi. Pillar Tech is working in partnership with the telco.
An Orange Telkom Kenya branch in Nairobi. Pillar Tech is working in partnership with the telco.

When it comes to earnings, there are three major sources: active, passive and portfolio income. Active income comes from formal jobs or self-employment.

Passive income is earned from leveraging existing systems such as franchising, while portfolio income is earned from investments like bonds and stocks – bought with savings from active or passive income. Passive income is vital in supplementing other sources and creating wealth. Many such sources have the potential to become full-time activities.

With the increasing joblessness though, how would you find it to make an income just through consumption? Well, Pillar Technologies Ltd is enabling people to do just that. The firm has created a platform where thousands of Kenyans are now making money whenever they consume airtime – a commodity that has evolved into 'basic' in the Kenyan context – through multi-level marketing.

PTL says it intends to empower households countrywide to recoup a little from the airtime they spend. And depending on the number of people who enrol under a member on joining the network, one could end up earning passive income huge enough to rival active earnings.

“Ours is a distribution model. It can work to sell anything in a structured way, whether that be electronics or cars, not just fast-moving consumer goods,” said Peter Massawa, PTL’s managing director, in an interview.

The company works in partnership with Orange Telkom Kenya – the third largest mobile services provider in the country – and says the model has helped up subscriber numbers and airtime consumption.

“The volumes are growing. We now have more than 50,000 members in our model over a two-year period, and many are making good earnings... as much as Sh50,000 every month,” he said.

Orange, in a response to the Star, said it partners with PTL "in the distribution of ... airtime and SIM cards in Kenya".

Massawa said PTL is using a model dubbed ‘Direct Intervention Programme for Empowering Kenyans’, which is at the moment the key anchor of its campaigns. The DIPEK concept, Massawa said, not only ensures one earns from the airtime they use but also generates a residual income over a lifetime.

“In the traditional model, one buys to get value from a product they see. Our model works with the word of mouth and presentation to ensure a potential member understands what's in it for them," he said.

“The 'buy' drive for airtime is different from that of a ordinary product. You find that people strive to ensure they have airtime even in toughest times of the month, while they would rather grapple with whatever else bothers them,” Massawa quipped.

Pillar Tech says its unique business model ensures that anyone makes money no matter when or what level they join the network. For membership, one needs to activate a registered Orange Telkom mobile line.

Once a member, you start earning income whenever you or the people you recruit load airtime on their lines. PTL says income streams are three-prong; activation of new members, monthly allowances and lifetime residual income.

“It is a win-win scenario. And new members must always be recruited by existing ones. Pillar Tech itself (as a company) cannot register members,” Massawa said.

Just so you understand the potential, let’s unwrap the process and model.

A member registers with Sh2,985 to join and is handed a starter kit for DIPEK. According to PTL, the member is entitled to monthly allowances of up to Sh20,000 “upon reaching certain targets” that it defines.

When you join and start recruiting, those directly under your code (assigned serial number) are your ‘first generation’ in the multi-level network. Whenever they recruit, those will make your ‘second generation’. These will recruit the ‘third generation’ and so on.

“This goes on up to the 12th generation. The number of people you recruit and those they recruit creates a 'multiplier effect',” he said, adding that the sum of members under one’s ‘down-line’ are labelled ‘team’.

For every recruit you enrol, you earn Sh500, which reduces to Sh50 depending on the generation up to the 12th. Remember, it is not you who will have recruited the second to 12th generations directly, but a residual income is accrued to you.

Besides this activation income, one earns from the airtime they and their generations (team) load on their lines. One earns a commission of 0.5 per cent for airtime loaded every month. A member must however load a minimum Sh500 worth of airtime, either once or cumulatively.

“Most people load more than Sh500 monthly which is equivalent to Sh17 daily. The amount is therefore relatively reasonable, as the lower limit,” Massawa said.

The airtime must however be loaded through Orange Money, the partnering telco’s mobile money transfer platform, and not scratch cards. One can check their earnings and team size via SMS or by logging in to the online accounts on Pillar Tech’s website.

“You will not be selling, hawking or marketing airtime. You will just be recommending and sharing the business opportunity with your networks and have them join your team. So, as they consume Orange airtime, they benefit and you benefit too,” he said.

“We are converting that phone into a business platform, making consumers as partners.”

Massawa says the worth of airtime within the network of about 50,000 members averages Sh9 million to Sh12 million every month.

“This is still little, we are still young as a business and hope to do a lot more,” he said, adding that Pillar Tech targets a membership base of three million in the next two years.

So, I ask, are there challenges in this unique model? Are there hurdles along the way?

“Yes there are. People have their doubts, and especially so with Kenyan consumers, because of pyramid schemes that have left bitter memories. That’s what really affects most consumers,” Massawa said.

Creating awareness about DIPEK, he said, is the firm's biggest strategy to overcome doubts and build confidence. Pillar Tech also plans to have outlets countrywide. It helps to have Orange's backing.

“We are also using testimonials to show that indeed those who join do get the promised results. Our system is open and transparent, and one can track their activities,” he said.

Massawa said Orange participates in the firm's seminars to answers questions regarding the partnership.

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