Unless you live under a rock and don’t spend much time on social media, you’ve probably heard of Andrew Tate and Hustlers University, his paid online community for entrepreneurial hopefuls.
Some people have accused Hustlers University of being a pyramid scheme. However, that largely depends on what your definition of a pyramid scheme is. Hustlers University is a legitimate educational program that provides its members with resources to help them make money as entrepreneurs.
Is the information inside Hustlers University valuable? Perhaps to some.
Is it proprietary? We don’t think so. The content doesn’t share anything groundbreaking that hasn’t been covered in other online courses for entrepreneurs.
Is it a pyramid scheme? That’s exactly what we’re going to dive into today.
First things first—who is Andrew Tate?
Andrew Tate is a British-American serial entrepreneur, former professional kickboxer, and social media star. He is the founder of Hustlers University, an online membership that provides resources to people who want to start their own businesses.
He has a podcast called Tate Speech. The podcast’s premise is, “Reality doesn’t care how you feel. This isn’t Hate Speech, this is Tate Speech.” You can make your own assumptions about that.
Andrew Tate’s net worth is approximately $250 million, which he amassed from running several businesses, including a webcam business, a chain of casinos, and The War Room—which is a “global network in which exemplars of individualism work to free the modern man from socially induced incarceration.”
Although Tate has been in the limelight for years since he gained notoriety after being kicked off of Big Brother UK, his short-form video clips have gone mega-viral in 2022. His virality helps him make even more money, which we will explain next.
How Hustlers University promotes getting rich quick
Hustlers University is solely focused on making money online—and doing it fast.
Instead of promoting traditional methods of making money, like working a 9 to 5 job or starting a brick-and-mortar business, Hustlers University preaches ways to make money through e-commerce, social media, and other online ventures.
The entrepreneurial activities that Hustlers University promotes include:
- Stock analysis
- Options plays
- Crypto analysis
- DeFi
- E-commerce
- Copywriting
- Freelancing
- Flipping
- Financial planning
- Business management
That’s all fine and dandy, but what makes Hustlers University special? After all, there are plenty of other programs that offer similar resources.
Hustlers University’s main selling point is the “opportunity” to make a lot of money quickly like Cobratate himself.
Tate’s messaging promotes getting rich quick. He often talks about how he made $600,000 per month from his webcam business. Most people have never seen that much money in their lives, so the thought of achieving that level of success is mind-boggling and… well, very attractive.
Hustlers University’s membership fees are also a major selling point. The program costs $49.99 per month, which is relatively affordable compared to other paid online communities and courses that focus on entrepreneurship.
So, what’s the problem with Hustlers University? Why is it so controversial?
Because many people accuse Tate of operating a pyramid scheme. Let’s take a closer look at that accusation.
ICYMI—here is what a pyramid scheme is.
A pyramid scheme is an illicit business model in which participants make money by recruiting new members rather than selling products or services. It’s called a pyramid scheme because it’s structured like a pyramid, with each new recruit at the bottom supporting the people above them.
The only people who make money in a pyramid scheme are the people at the top of the pyramid. Everyone else loses money. That’s why pyramid schemes are illegal in the United States and many other countries. They are unethical, and they trick people out of their hard-earned money.
Recruiting new members is the only way to make money in a pyramid scheme. Pyramid schemes are not sustainable business models in the long term. Eventually, the pool of potential recruits dries up, and the pyramid scheme collapses.
What is the difference between a pyramid scheme and a multi-level marketing (MLM) company?
In theory, the difference between a pyramid scheme and an MLM is that there is a legitimate product or service being sold in an MLM. In a pyramid scheme, there is no product or service—only the promise of making money by recruiting new members.
An MLM company sells products or services to its customers and pays its participants commissions for recruiting new members. The commissions are paid based on the sales of the products or services, not on the recruitment of new participants.
Pyramid schemes are illegal in the United States and many other countries. MLM companies are legal, as long as they are selling a legitimate product or service.
Are MLMs pyramid schemes in disguise?
This is a debate for another day, but we’ll sum it up for you. There is evidence that many MLMs are no different from pyramid schemes.
The Federal Trade Commission (FTC) has taken action against several MLMs for being pyramid schemes in disguise. The FTC has also warned that some MLMs may look like legitimate businesses, but they are actually illegal pyramid schemes.
Now that we have that out of the way, let’s talk about Hustlers University.
Does the Hustlers University business model qualify as a pyramid scheme?
Hustlers University has a monthly membership fee of $49.99. For that fee, members get access to online courses, resources, and community forums.
However, TikToker @benleavitt[1] claims that the reason Andrew Tate is becoming so famous is that he “runs a Pyramid scheme for sigma males.”
All Hustlers University participants have the opportunity to become affiliates for the online course/community. Affiliates earn a 50{c8122336fa184b41b825475f39221c7fa2e59423b242708028c1f2502555c53f} commission for anyone they refer who signs up. That’s an easy $25 in cash for every new registrant, which is an appealing offer for an affiliate.
Average affiliate commissions for online courses
The average affiliate commission for an online course is 10 to 20{c8122336fa184b41b825475f39221c7fa2e59423b242708028c1f2502555c53f}. So, 50{c8122336fa184b41b825475f39221c7fa2e59423b242708028c1f2502555c53f} is a very high commission. It’s possible that this is just a marketing tactic to get more people to sign up for the affiliate program. But it could also be a sign that Hustlers University isn’t meant to educate people. Instead, it is focused on recruiting affiliates to promote the course to even more aspiring entrepreneurs.
This raises the question: Is Andrew Tate more interested in promoting his affiliate program than he is in selling courses?
It’s impossible to say for sure. But based on the evidence we’ve seen, it’s possible that Hustlers University is nothing more than a pyramid scheme disguised as an online course.
What Hustlers University actually teaches about making money online
Now, let’s get into the good stuff: what Hustlers University actually teaches its participants.
In addition to teaching its hustlers about copywriting, crypto, and freelancing, one of the main money-making strategies Andrew Tate offers is to cut up clips of himself and share them across the Internet.
Why does this work? Well, it ties in perfectly with his attractive affiliate commission offer. If you can get people to sign up for Hustlers University using your affiliate link, you’ll earn a 50{c8122336fa184b41b825475f39221c7fa2e59423b242708028c1f2502555c53f} commission—or $25 for every new member.
If you can get a lot of people to watch your TikTok videos and click on your affiliate link, you could make a decent amount of money.
But will this opportunity last? If Hustlers University is a pyramid scheme, it won’t—because as we mentioned earlier, pyramid schemes are not sustainable “business models.”
If the FTC catches wind of what’s going on, they could shut down the entire operation. So, while you might be able to make some quick cash by promoting Hustlers University, it’s not a long-term solution for making money online.
But wait—if Andrew Tate’s business is registered in Romania, can the FTC still punish him?
We forgot to mention that Andrew Tate actually lives in Romania. While it’s true that Hustlers University may be registered in Romania, the FTC can still take action against Andrew Tate and any other US-based individuals or businesses involved in the operation.
The bottom line is this: if you’re thinking about promoting Hustlers University, think twice. It may be a pyramid scheme, and it’s not worth risking your reputation or getting in trouble with the law.
Let’s play the Devil’s Advocate. Why wouldn’t Hustlers University be a pyramid scheme?
Some believe that Hustlers University offers its members a valuable service: access to online courses, resources, and community forums for entrepreneurs who want to make money online.
It’s possible that Andrew Tate is simply using an affiliate marketing strategy to promote his business. It’s also possible that the high affiliate commission is just a strategy to incentivize affiliates to promote the courses more effectively.
Pyramid schemes typically contain multiple levels of recruitment
Another key characteristic of pyramid schemes is that they typically contain multiple levels of recruitment. In other words, participants are not just recruiting new members—they’re also recruiting other people to recruit new members.
However, we haven’t seen any evidence of this occurring with Hustlers University. While affiliates are incentivized to recruit new members, there’s no evidence that they’re being asked to recruit others to do the same.
It also seems that there is only one level of recruitment. That is, affiliates are only being compensated for the people they recruit—not for the people recruited by the people they recruit.
Since Hustlers University only has a single level, it is not like other schemes that use multiple levels to pay more money to people who are higher up in the pyramid.
Although Hustlers University may not be a traditional pyramid scheme now, it would be easy for Andrew Tate to shift the business model into a multi-level marketing format if he wanted to.
All he would need to do is start paying affiliates not only for the people they recruit, but also for the people recruited by the people they recruit.
If he did this, the business would quickly become a pyramid scheme—and it would be much more difficult for affiliates to make money.
So, while it’s possible that Hustlers University is a pyramid scheme, there’s also a chance that it’s not. Only time will tell for sure.
The verdict: Is Andrew Tate operating a pyramid scheme with Hustlers University?
We believe that there is evidence to suggest that Hustlers University is a pyramid scheme. However, we can’t say for certain without further investigation. So, if you’re thinking about joining Hustlers University, proceed with caution. After all, it might not be around for much longer.
