MLM Analyst

Look, I was hoping I could generally avoid singling out individual companies when doing my analysis. But lately I’ve received so many confused comments & emails from apparent MonaVie distributors regarding the Inc. 500 list that I’ve got to clear up some things for them. I’ll try not to be unkind…

Within this site’s comments you’ll find the following,

Do you also think the INC magazine top 500 companies (in the September issue) list is also bologna because MonaVie is the only mlm that made the list. Should we also be calling that publication a bogus, bias, poorly researched and invalid lie?

And you’ll also find this gem,

When was this research taken?? Because the September addition of the Inc. 500 magazine (The annual report of the fastest growing private companies in America) states the ONLY nutritional beverage to rank was MONAVIE! Placing #1 in the Food & Beverage category, #3 in Revenue and #18 OVERALL!!  GO TAKE A CLOSER LOOK AT YOUR STATS.

If I were a MonaVie distributor, when I first heard about the Inc. 500 list placement I’d tell all my prospects about it. But after that I’d probably:

1. actually go read about it
2. figure out that it only includes private companies that proactively submitted their own annual revenue numbers
3. think to myself, “Oh, well. I guess it’s better to be on it than not on it.”
4. just keep it to myself because I didn’t want to be dishonest and manipulative by ever implying that MonaVie somehow “beat out” any other MLM companies since it appears that MonaVie was the only one who submitted their info

Just about the same process would apply to leveraging my company’s placement on a MLM Top Earners List: A) get excited, B) ignorantly tell others, C) finally learn the facts, D) and then keep it to myself because I want to be able to live with myself.

I just thought of another motivation for keeping it to yourself. What if you attracted an intelligent team member/distributor/customer who likes to read and learn facts for themselves? What if they actually read Inc. Magazine’s methodology (<- notice that link) and figured out you were either deceitful or ignorant? Either one is bad, right?

And can you image an intelligent new recruit actually looking at, and then analyzing, the methodology behind the creation of a Top Earners List? Their trust in you would be pretty well shot. You don’t want that.

See, I’ve not only avoided being unkind, I’ve actually been very nice to MonaVie people; helping them retain their recruits. You’re welcome.

I’ve really enjoyed some recent comments posted on the site. Some of my favorites are those riddled with stories of how the author knows a guy who knows a guy who makes a billion dollars a month, etc. etc. They are usually provided as evidence that one network marketing company or another outperforms all the rest. Take this one for example,

“…i have a personal friend named [deleted] who makes 13k a week and i know this because i saw it and his dad is a black diamond that makes 1.5million a year and i also saw that so i know its not fake…”

Many of you know that if you’ve exposed yourself to enough companies & products, you hear the same basic stories from them all – people were healed, the most unlikely people became crazy rich, and so on. I suppose the storytellers can’t be faulted. If you want someone to take action, you typically want to appeal to their emotions. Emotions motivate. And stories touch our emotions.

In fact a few years ago I read an article in the Harvard Business Review by a famous screenwriter, Robert McKee. In it, McKee argues that, “executives can engage people in a much deeper–and ultimately more convincing–way if they toss out their PowerPoint slides and memos and learn to tell good stories.” I agree. In fact, since reading the article I find myself telling more stories to illustrate points when I deal with clients and business partners.

But you can pry on someone’s emotions to persuade them to do something stupid just as easily as to persuade them to do something good, right? I’ve become a bit jaded by anecdotes of people becoming unbelievably wealthy or suddenly healthy. Of course those people exist. I know many. But is it wise to base important personal and business decisions on someone else’s stories? Do those stories necessarily relate to you and your future?

I’m going to say “no” – with a caveat. Let me start by defining the term, “Anecdotal Evidence,” which is, “non-scientific observations or studies, which do not provide proof but may assist research efforts.” Stories are anecdotal evidence. They are nice and can serve a valuable purpose, but only when they reflect more scientifically valid evidence.

Successful businesses do not make decisions based on anecdotal evidence. If they do, their success will be short-lived. A long time ago I was part of a technology start-up that had an owner who told us he had spoken to dozens of potential customers and that they all wanted a certain type of billing system. As evidence of this conclusion, he would tell a single convincing story to the other owners about a conversation he had with a potential customer.

We were all supposed to take that as evidence enough of what all of our future customers would want. When a few of us asked to see his data he became very defensive and threatening. So we trusted him and designed and built the system. It took 6 months and cost us a bit more than $1 million to build. It was a complete bust. Our sales peaked at around $10k/month.

So those of us more interested in reality (and surviving as a company) went out and interviewed a number of potential customers and found that they preferred something completely different. It was simpler and much less sexy than what our outspoken storyteller insisted on. It took us a month to build and we did it entirely with existing resources. Within a short while, monthly sales passed $200k.

Now, what will you do with my little story? You could dismiss it as not representative of typical successful businesses. Or you could use it to start your own research, reading articles and studies that show how successful businesses make successful decisions. After that you’ll conclude that my story is realistic and useful and you’ll try to make important decisions in the same way.

So here’s “the moral of the story” for those working in, or looking into, the network marketing industry. The next time someone tells you a great story, or two, about their product or opportunity consider using some of these statements and questions in your responses:

• Wow, that’s a good story. Now show me all the data you have.
• What percentage of your company’s distributors make at least $1,000 per month?
• What percentage make at least $10,000 per month?
• What scientific studies have been performed on your product?
• What about independent tests performed on your company’s specific product formulation and processing methods?
• What percentage of revenue does your company spend on ongoing research and development to ensure the quality and viability of current & future products?
• What percentage of revenue does your company spend on distributor support and in what form do they offer that support: mass advertising, sales materials, etc.?
• What percentage of product sales are due to retail sales as opposed to distributor purchases?
• What does your company do to regulate fraud and other inappropriate distributor behavior?
• I’m certain you could (and should) think of dozens of other important questions.

Stories are fun, and they might sometimes reflect reality. But smart business people ask a lot of smart questions and legitimate companies with long-term prospects have solid answers. The more smart questions you ask, the more MLM companies will have to disclose valid information.

The less fair MLM companies may also finally be persuaded to invest more in making their products and business practices more legitimate instead of plowing extra millions into the pockets of a few chosen elite. But if things continue as they are with certain companies, we’ll only be sure to hear more and more stories and less and less useful facts.

I recently had an interesting exchange with a man named Mike within a post on the MLM.com forums. I thought it was entertaining enough that I would share parts of it with all of you.

It started with a re-post of an article/sentiment that has been circulated in many other places about the promise of direct selling vs. typical employment. It extolled the virtues of working hard in direct sales in the short-term so that you can achieve long-term dreams.

In general I agreed, but made an argument for balance. I wrote,

Yes, like just about any entrepreneurial effort, direct sales can provide great financial freedom and flexibility. But how many of us entrepreneurs sacrifice years of enjoying important personal and family moments with the idea that we’ll somehow get more of those moments in the future?

Money is fine but not actually critical to happiness. And time only exists right now. So whether you work for yourself or someone else, or both , balance is where it’s at – especially when it comes to making time for others. …A reminder to myself more than anything.

To which my new buddy Mike replied,

Money is fine but not actually critical to happiness - post

You couldn’t convince that’s true to billions of people so lacking in money they go without daily food, clothing and shelter.

And time only exists right now. – post

Because so many people live like that without planning for the future they end up in the future more broke and hopeless than ever.

And my reply to that,

When I said “money is fine but not actually critical to happiness,” I thought I was replying to a post about balance coupled with prosperity on an internet discussion board perused by people who probably have a place to live and food to eat.

I didn’t realize my sentiment would be read by “billions of people so lacking in money they go without daily food, clothing and shelter.” Otherwise I would have certainly encouraged them to earn some money first before pursuing balance.

And with regards to encouraging myself and others to live in the moment, I agree with you that that cannot come at the expense of preparing for the future. However, if you read that entire paragraph of mine you’d note the message is to reserve “time” to care for other people, now.

I assume you’re not proposing that because others are poor and suffering, money should be our life’s primary aim; nor that we should so singlemindedly pursue wealth for tomorrow that we ignore the needs of others today.

I suppose everybody defines happiness and balance somewhat differently, but could the two of us possibly be that far apart?

Here’s an interesting report to consider. It is about the measurement of happiness in various parts of the world. Surprisingly, many 3rd world countries top the list:
Nigeria Tops Happiness Survey.

And here is a more recent happiness study wherein the researchers conclude, “Money’s pretty powerful, but it’s not the whole story…”

They add, “…benevolence and expressions of gratitude appear to be subtle but powerful ways to bring happiness into one’s life and to extend it. Religion and solidarity in the community play a big role in this, he says, but any positive belief system can help.”

Some “balanced” food for thought…

And here is Mike’s reply to that,

Money is such a multi dimensional multi leveled concept and provider of happiness that it resists any singleminded want or pursuit. And the needs of all people today require money unless they are people who live totally off the land for food, clothing and shelter and buy nothing at all.

For all the rest of us money is the great provider and however we get it or like what we do to get it it remains the great provider.

We’ve heard many times: I’m just in this to help people. Great – help them by referring them all to me and that will satisfy your need to help.

When you love what you do all the better and living like an artist passionate about your life your business your art – they are the same – is a reasonable goal. It’s the only goal I’ve ever had and I believe it’s the best way in the world to live.

But regardless of that, you can’t ignore money when you pay attention to people’s needs today – it’s a contradiction.

And my final reply,

Mike, dear Mike. You didn’t read those 2 articles in my last comment, did you? I’m thinking you couldn’t have because there’s no way you could have resisted attempting to debunk them. And I saw no debunking, just more insistence that “…the needs of all people today require money unless they are people who live totally off the land for food, clothing and shelter and buy nothing at all.”

Au contraire. Remember studying Maslow’s Hierarchy of Needs in high school or college? It’s a pretty common model for understanding the types of “needs” that all people have.

A focus on money effectively ignores an individual’s highest needs. Most people you and I meet really already have their basic physiological and safety needs met. So can money buy love/belonging, self-esteem and/or self-actualization? Nope. It can help grease the machine a bit, but it’s not necessary. (Again, those two worldwide happiness studies I previously linked to are insightful.)

So you absolutely can “ignore money when you pay attention to people’s needs today.” It’s not a contradiction. The key is actually caring enough about someone else that you find out their real and immediate needs and sincerely try to help them – with no thought of personal gain.

In most cases, the people we meet and especially those close to us, need our time and attention not our product or business opportunity. However, maybe sometimes those come later, after we’ve proven we view them as more than a pawn in our own pursuits.

Sorry for making this post so long. But ultimately we all want to be happy and I think the pursuit of happiness is a struggle of balance and priorities. So it’s important to constantly question ourselves, our motives, actions, thoughts, etc. In the middle of making a living, are we really concentrating on what will bring us the greatest happiness? If we truly care about others first, won’t our businesses thrive as a nice by-product?