Precisely. And until I see a genuinely effective strategy from companies similar to Pow Wow (and we've already seen many of them, alas), I'm skeptical of the end goals.
I can email five friends today and start our own publishing company, for our own work, and using our own capital and talents. Nothing wrong with that, though it might be slightly crazy. It crosses into irresponsibility when we start coaxing other, even less experienced writers to join us. To commit their work on vague promises of new kinds of marketing and future profits.
In Pow Wow's case, it's simply too early to tell. We don't have enough information to make a positive judgment, and what little we've seen so far appears close to the pitches from some less-than-effective companies we've already dicussed.
To be as helpful as possible, I'd urge the principals to re-think accepting beta authors until they have more details worked out, to try for some major (and respected) UK literary professional endorsements, and get three to five years worth of operating capital in the bank first.