Why People Fail

Originally, my title for this article was “Why People Fail In Networking”  After I got well into writing it, I concluded that this article went much deeper than why people fail in a particular kind of business model. I think you will see what I mean.  I don’t expect that everyone will appreciate this article but I promise that it will not be like every other article out thereabout why people fail.

Many years ago, I worked for a sign company in Long Beach, California. My boss was a  good guy and real character named Conrad Escalante who had patented a sign design that he called the Advertising Machine. It was about 2 1/2 feet high and 3 feet wide. It had a bright yellow, backlit  plastic face with tracks that held plastic letters. The entire perimeter was covered with light bulbs housed in an open channel. When you plugged it in, the lights flashed in a circular motion and could be seen from a mile away. We sold it, door to door to businesses all over the country in the 80’s. This represents the toughest kind of sales. This was long before sign ordinances prohibited these kinds of signs. These signs made it possible for a  store front merchant to direct a lot of attention to his store.  With one of these babies, everyone passing by would notice his store.

I was the Sales Trainer for the company and had the responsibility of training and inspiring sales people who, for the most part, were somewhat downtrodden and had been looking in desperation for a way to make money.  I discovered that most of these sales candidates were  good people who had failed in their previous endeavors. The main reason for this was that they were very negative in their view of themselves.  This attitude was always reflected by their belief that they had a series of “bad breaks” that had brought them to a desperate level of poverty.  Invariably, they saw themselves as a victim.  In addition, they had a tendency to blame others for their failures.  The real cause of this problem, goes much deeper than what one can see on the surface.  They had failed so many times, that they just knew that things would not work out well for them in anything they tried.  I was somewhat naive’ about this and believed that, at some level, I could fix them.but, 96% of them failed and left the company. Conrad used to tell me that salespeople have a 24 hour clock and that you have to wind them up, everyday.   I spent a great deal of time trying to do this.  I used concepts and slogans to inspire them. One of my favorites was;

“Whether you think you can, or you think you can’t–you’re right.”

― Henry Ford

While I agree that having a positive attitude is important, but what I have discovered is that failure is a common experience to all mankind. We fail at everything!  If inspirational quotes and slogans and positive ideas could fix this problem then 95% of those who enter the Network Marketing Business would not fail, because MLM is absolutely loaded with positive slogans and  ideas!

Think about it. Most people already know that around 50 percent of marriages in the United States end in divorce. The number is similarly high in many other developed nations. When you break that down by number of marriages: 41 percent of first marriages end in divorce.  60 percent of second marriages end in divorce.  73 percent of third marriages end in divorce. Most people who take up golf, do poorly.  The attrition rate in real estate is astronomical. In fact, a greater percentage of new licensees fail than do new restaurants. Some 90% plus will not see their second anniversary in the business. The turnover rate in retail jobs is around 110%.  The failure rate for new businesses is so high that Harvard Business School estimates 95 percent of new businesses fail in the first year.   Today, the average person changes jobs ten to fifteen times (with an average of 11 job changes) during his or her career, which means a good amount of time is spent changing employment. Nearly Half Of America’s College Students Drop Out Before Receiving A Degree. I could go on, but I am pretty sure you get the idea. It is interesting  that we always have great excuses for our failures.   It was our spouses fault, the company had an untenable environment, it was the economy, I had personal problems, they didn’t recognize my talents, the market was bad, the product stunk, there was too much competition, etc., etc.

I have identified two major reasons for failure.  There are others but these are the biggies.

1. What We Believe About Ourselves.

I have discovered, in my work in the State Prisons as a volunteer chaplain, that there is a distinct possibility that a natural physical function of the brain is to blame.  This physical function can be found in the brain stem, and is referred to as The Reticular Activating System, RAS for short. Most people don’t know that this perfectly normal brain function can be their worst enemy.  Let me explain.  The reticular activating system (RAS) is a part of the mammalian brain located in the brain stem. In human biology, it is believed to play a role in many important functions, including sleep and waking, behavioral motivation, breathing, and the beating of the heart.  In simple terms, it functions like a librarian.  Most of us have been to a library where they use the Dewey Decimal System.  First you look up the title of the book that you want to find in the card file, where you see who the author is, what the book is about and other salient facts. There are categories or classes in this card system;

The main Dewey Decimal classes are these:

000 Generalities
100 Philosophy and psychology
200 Religion
300 Social Sciences
400 Language
500 Natural sciences and mathematics
600 Technology (Applied sciences)
700 The arts (fine and decorative)
800 Literature and rhetoric
900 Geography and history

Each class is further subdivided at the hundred divisions and the the thousand sections. Numbers are placed after a decimal point to further identify material more specifically by subject.  How does one make sense  of a call number? Here is a sample of a book title and Dewey decimal call number. Note how, as we analyze the call number, each line leads to more specific information about the book’s topic:

142.780973 C826e  Existential America by George Cotkin   100, Philosophy & psychology. 140 Specific philosophical schools. 142 Critical philosophy. 142.7 Phenomenology. 142.78 Existentialism. 142.780973…About Existentialism in America (0973 at the end means history and description about America)  With this number, you can walk directly to the book in a large library with tens of thousands of books and put you hand right on it, no problem!

Ok, enough about the  Dewy Decimal System.  The fact is the RAS  works kind of like this.  This system has been operating in you subconsciously and relentlessly since the time you were born. It has made a “card” about everything that has happened to your  life. If when you were young,  a teacher, a parent or some other person with influence in your life said to you that you were a loser!  The RAS makes a card entitled loser and lists the emotional response you have. Then every time you are confronted with some stimuli that provokes this same emotional response in you, the RAS quickly goes and pulls up your loser card and reads it to you. Of course, more information is continually added to the card as life goes on.  This is why we continue to make the same mistakes over and over again.  Why we feel nervous, or anxious, or apathetic, or embarrassed, or confused and inadequate.

This RAS, and its little cards,  is what keeps people fat, or broke, or lonely, or lacking confidence, and most of the time we don’t know that this is happening to us.  In order to overcome this problem, we need to re-program the information held by our librarian.  This requires much effort and it means replacing negative thoughts with positive ones. It means reasoning with oneself and turning thoughts and feelings that lead to failure to ones that will lead us to be successful.  It takes time to overcome negative ideas about oneself that have been with you for a lifetime, but it is entirely possible which brings me to the second main cause of failure.

2. Character.

I wrote a bit about Character in my last post but I need to go a bit deeper with this concept.  The dictionary defines character as;

char·ac·ter
1. The aggregate of features and traits that form the individual nature of some person or thing.
2. one such feature or trait; characteristic.
3. moral or ethical quality: a man of fine, honorable character.
4. qualities of honesty, courage, or the like; integrity: It takes character to face up to a bully.
5. reputation: a stain on one’s character.

In its true sense, character is spiritual maturity.  It comes from honestly facing our own demons; pride, vanity, self-indulgence, envy, greed. sloth, lust, etc. Forgive me if this offends anyone, but someone who attends a Mega-Church that teaches that God wants you to be rich and happy all the time, is not spiritually mature. In order to overcome our passions, we need help, we need Grace and we need to struggle to be a better person. Most of you who are reading this will know how this is obtained.

The following is a quotation from John Chrysostom, one of the Early Christian Church Fathers and a story that gives an example of what I am trying to say:

John Chrysostom,  teaches us that it is not the man who has nothing that is poor, but the man who wants to have that which he has not got. One can have nothing and not be poor: one can be rich from the point of view of everyone who looks at our lives, and feel oneself to be a wretched pauper. We are rich only, then, when we absorb everything given to us in life as God’s gift and the richness of God’s love.

“There is a story quoted by Martin Buber that tells how in the eighteenth century there lived a rabbi in Poland. He lived in extreme, desperate poverty, and every day he gave thanks to God for all his generous gifts. Once somebody asked, ‘How can you thank God day after day, when you know, and know for sure, know in your flesh and in your soul, that he has not given you anything — how can you lie in prayer?’ The rabbi looked at him smiling and said, ‘You do not understand the crux of the matter! God looked at my soul and he saw that in order that I should grow to my full stature, I need poverty, hunger, cold, and abandonment; and in this way he enriched me infinitely.’

“This is a marvelous story, because we see in it a man who is able to believe God and love him, and to understand God’s wisdom through love, which is incomprehensible to the mind of the flesh. We see how this man in his utter wretchedness was rich — in a certain sense, already in the Kingdom of God.”

My hope for you is that you will be successful in all of your endeavors. Remember that true success is not always making a lot of money.  Sometimes our failures will give us a richness we could have never dreamed of.  Don’t get me wrong, money is important and Network Marketing is a wonderful business model whose time has come.  In my next post, I will talk more about the real opportunities one can find there. My purpose was to get you to think beyond just getting wildly rich! There are more important things and if character is not developed, in a true spiritual sense, you will never really be rich at all.

Seraphim

What’s missing in personal development?

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What Does It Take To Be Successful In Network Marketing?

In my last post, I wrote about some of the reasons anyone should consider Network Marketing but, I also mentioned some negative aspects related to one’s character, that everyone should consider before getting involved.  Even after one is engaged in the business, one should consider exactly how his or her character will effect his or her prospects of success in MLM.

Work Ethic

What kind of work ethic do you have? Do you arrive at work on time? Do you currently give your employer an honest days work?  Do you try to get along with others who grate on you in the work place, or is the difference in your personality so strong that you create a negative ethos in your workplace? Do you honestly appreciate and value the differences in others values and style? Are you honest? Are you willing to make sacrafices to see others succeed? Are you a team player or are you a rugged individualist? Are you competitive to the point of hurting others? If you have answered in a way that keeps the focus on “you”, and you are not “other directed”, then you have a choice to make. Change or fail!  Personal change of character can be the most challenging thing in life, but if you expect others to believe in you and follow your lead, in “any” endeavor, you must become a person of real integrity. You must become the person who has the characteristics of the people that you want to attract.

You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. That is something you have charge of.

Jim Rohn

“A critical mistake that I made as a young leader was that I used to think that charisma was the most important aspect of leadership. In the beginning, I focused on charisma because I know that leadership attracts, and leadership influences people. Therefore I thought, “Well, if I’m going to influence people I’ve got to develop charisma in my life.” I’ve been around enough boring leaders to say that is a desire that most of us should have! What I learned is that character is the most important aspect of leadership, not charisma. Charisma attracts, but character sustains. In fact, I think charisma, in the area of leadership, is overrated. Character embodies who you really are. It’s the inner fiber of your being. It is your inner self in action. It reveals what you are truly made of, it’s your substance. Character is, as D. L. Moody said, “What you are in the dark.”

If you have charisma without character, it’s only a matter of time before people find you out. Without character you cannot sustain meaningful relationships, and without relationships your ability to lead and influence others is anemic. So what is it about character that really makes a difference?

1. Character sets you apart.
There was a time when people who lacked integrity stood out from the crowd. Now the opposite is true–charisma can make people stand out for a moment, but character can set them apart for a lifetime.

2. Character creates trust.
Leadership functions only on the basis of trust. If you pull out trust, then you will lose your leadership foundation.

3. Character promotes excellence.
If you lead people, good character sets a standard for everyone who is following you. People will eventually become like their leader. If leaders compromise on their standards, cheat the company, or take shortcuts, so will their followers.

4. Character gives staying power.
During the tough times that all leaders face, character has the ability to carry you through, which is something that charisma can never do. When you are weary and inclined to quit, the self-discipline of character keeps you going.

5. Character extends influence.
Charisma, by its nature, doesn’t last long or extend very far. It’s like a flash of gunpowder. It produces a quick, blinding light, but then it’s gone. The only thing left is smoke. Character, on the other hand, is more like a bonfire. Its effects are long-lasting. It produces warmth and light, and as it continues to burn it gets hotter, giving fuel that burns brighter.

If you’re currently leading people, you probably have some measure of both charisma and character. The question is which one are you relying on to lead? The answer can be found in your response to this great question, “As time goes by, does it get easier or harder to lead?”

Without character, leadership becomes harder to sustain. You constantly have to perform to get people to notice you; but with character, as time goes by, leadership strengthens, builds, and continues to attract the people. And best of all, the ones who do come to enjoy your fire stay with you a lot longer than the ones who only want to see a show.”

— John Maxwell

In my past experience with a rapidly growing Network Marketing Company, I noticed some leaders who became increasingly  motivated by money.  They were thrust into an income level that caused them to lose sight of character.  They focused on only the people who would make their next commission check bigger and ignored those who were working hard and struggling to to grow their business, but weren’t producing numbers big enough to suit them. They became almost brutal in their style of training.  They made demands and forgot to inspire by their actions. Money changes people who lack character!

I was there long enough to see some of these same people lose much of their residual volume and income. These leaders, who had quit their full-time jobs, with a fanfare,  ended up having to return to their traditional full-time jobs. After all of their hype and fanfare, they ended up showing everyone that they were really shallow people who lacked wisdom and character. They had previously made announcements on social media sites that proclaimed that they had found the Holy Grail of income generation and now had the freedom to spend time with their families, travel the world, buy expensive cars and homes and generally do whatever they wanted with a minimum of effort. Imagine the impact on those who looked to them as leaders when these individuals had to sheepishly return to the workplace in shame. Now, with less credibility, where they continue to try and inspire “new” people to join their ranks. Why would anyone want to follow a loser?

You see, they lead with charisma and not with character. Somewhere, they lost track of integrity, they embellished the facts, they made false claims, they wanted people to do as they said, but forgot that people do as you do.

There Is No Shortcut To Success

It is amazing to me that many people who get involved in Network Marketing, think that they don’t have to work!  They are dazzled by the idea that everyone below them will have to do all the work and that they will get to reap all the rewards.  Nothing could be further from the truth. Success in MLM is completely dependent and equal to the amount of effort you invest in your business.  One must realize that there is “no” easier softer way This is because there is a spiritual principle involved, namely;

Genesis 3:19 KJV
In the sweat of thy face shalt thou eat bread, till thou return unto the ground; for out of it wast thou taken : for dust thou art, and unto dust shalt thou return .

And…

Proverbs 14:23
All hard work brings a profit,
but mere talk leads only to poverty.

Everyone only reaps the rewards of their own labor.  Of course in MLM, if one is invested (this requires time and hard work) in the lives and success of others, additional rewards can earned in tis way.  Remember that this still requires your hard work.  In this kind of work, you are working for others, for their benefit, for their success.  The trick is to be focused on the other and not on the reward. In this, it is important to not get the cart in front of the horse.

Helping others is a selfless act referred to as altruism. Although most people help others without themselves in mind, there are many benefits to the helper. You reap mental, physical and societal rewards when you assist and support people. Although true altruism does not ask for anything in return, it is reasonable to enjoy the rewards.  In other words, be nice and leave the rewards up to god. You will get rewarded for this kind of labor and focus.

Persistence

It has been said about persistence that “nothing” will take its place.

Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan “Press On” has solved and always will solve the problems of the human race.
– Calvin Coolidge

Persistence is the ability to maintain action regardless of your feelings. You press on even when you feel like quitting.

When you work on any big goal, your motivation will wax and wane like waves hitting the shore. Sometimes you’ll feel motivated; sometimes you won’t. But it’s not your motivation that will produce results — it’s your action. Persistence allows you to keep taking action even when you don’t feel motivated to do so, and therefore you keep accumulating results.

Persistence will ultimately provide its own motivation. If you simply keep taking action, you’ll eventually get results, and results can be very motivating.

Should you always persist and never give up? Certainly not. Sometimes giving up is clearly the best option.

Have you ever heard of a company called Traf-O-Data? What about Microsoft? Both companies were started by Bill Gates and Paul Allen. Traf-O-Data was the first company they started, back in 1972.  Gates and Allen ran it for several years before throwing in the towel. They gave up. Of course they did a little better with Microsoft.

If they hadn’t given up on Traf-O-Data, then we wouldn’t have such rich collections of Microsoft and Bill Gates jokes today.

So how do you know when to press on vs. when to give up?

Is your plan still correct? If not, update the plan. Is your goal still correct? If not, update or abandon your goal. There’s no honor in clinging to a goal that no longer inspires you. Persistence is not stubbornness.

This was a particularly difficult lesson for me to learn. I had always believed one should never give up, that once you set a goal, you should hang on to the bitter end. The captain goes down with the ship and all that. If I ever failed to finish a project I started, I’d feel very guilty about it.

Eventually I figured out that this is just nonsense.

If you’re growing at all as a human being, then you’re going to be a different person each year than you were the previous year. And if you consciously pursue personal development, then the changes will often be dramatic and rapid. You can’t guarantee that the goals you set today will still be ones you’ll want to achieve a year from now.

But, once you start, don’t quit.

In my next post, I will talk more about why people fail in Network Marketing.  Please leave a comment and stay tuned.

Seraphim

Aside

“Why People Hate Direct Marketing”

This is my first blog about Network Marketing and will be followed by additional articles that I hope will bring facts and perspective to what I believe is a real alternative  to a traditional job. I am not advocating the abandonment of one’s job. Network Marketing is something that someone begins on a part time basis while providing our families with the support that they deserve and expect.  My goal is to bring some facts and credibility to an idea whose time has come.  Do you doubt this statement? I challenge you to read the following very compelling reasons why everyone should consider this business model.

My hope is to bring some clarity to the idea of a Network Marketing business  opportunity to those who are considering getting involved, or who may not be aware of the potential offered by this viable business model. . The idea of Network Marketing is often viewed as a pyramid scheme unworthy of serious consideration, but is this true? It is true that many times these opportunities are presented by un-professional and greedy people who are in it to get rich and who are not concerned about the moral considerations of selling something that does not measure up to its claims (lies and mis-information) a very bad idea, or that may cost more than a similar product purchased at a retail store. Most of us strive to be frugal, especially in this economy, so why should what we pay more  for something offered by an MLM Company that we can get cheaper somewhere else?  Man, do I have some good reasons to do this!!!  ( the later, that is).  We are all very skeptical of anything that seems too good to be true. The old adage that says; “If it is too good to be true, then it probably is!” comes immediately to the minds of thoughtful people. While most of us know that no one give us anything for free, and a regular income from a traditional job is necessary to support our families, then traditional wisdom says we should just pass on this whole idea. Wait a minute!  I think that this view may be very short-sighted.

Here are some very compelling and thought provoking facts  that all of us should consider before we ignore this timely and lucrative phenomenon.   No opportunity comes without risks, and I will talk more about these in the next article., as well as the pitfalls and moral considerations that are essential to one’s success.( I promise ) That being said, remember this;

“One hundred percent of the shots you don’t take, don’t go in.” – Wayne Gretzky

“The men who try to do something and fail are infinitely better than those who try to do nothing and succeed.” – Lloyd Jones

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.” – Mark Twain

So then, please consider these reasons, compiled by the research of Leonard Clements,  for getting involved with your eyes wide open!

Reason Number One – The Economy.

What’s bad economic news to most people is good news to network marketers. And there’s a lot of good news.

I’ve always had the belief the U.S. economy did influence Network Marketing, but not significantly. I mean, was there ever an economy where people didn’t want more money and free time? B ut when I began to do some digging to support my contrarian position, I soon discovered I was wrong. That one of the strongest growth phases in Network Marketing history occurred between 1990 to ’92 and coincided with the last economic recession should have been a clue. And there was so much more.

When we compare the popularity trends of Network Marketing to unemployment rates, on a semi-decade basis, there are some very exciting revelations.

Although MLM was born in the 1930s – in the midst of The Great Depression – it began in earnest in the 1950s. Network Marketing was far more popular in the second half of the 50’s than the first. Not a single company of consequence launched from 1950 to 1955. However industry giants Shaklee, NeoLife, and Amway all started between 1956 to 1959. The unemployment rate the first half of the decade averaged 4%, and was the second lowest in U.S. history in 1953 at 2.9%. However, it averaged 5.3% the second half of the decade reaching its highest level since the Great Depression in 1958 at 6.8%. Translated into today’s numbers that would mean almost 6 million more people became unemployed between 1953 to ’58.

The first half of the 1960’s all types of direct sales continued to flourish. Mary Kay Cosmetics started in 1963, and Avon, Fuller Brush and Tupperware all achieved momentum. Although the industry continued to grow from ’65 to ’69, it was not nearly at the same pace. The unemployment rate the first half of the decade was significantly higher than the second half when 2.5 million unemployed people went back to work.

Jumping ahead to the 1980’s, Network Marketing was thriving the first half of the 80’s while unemployment continued to rise. In fact, in 1982 unemployment was at its highest level in 40 years at 9.7%. During the second half MLM “slump” unemployment dropped considerably, and by the end of the decade the number of those out of work was almost half of what it was at the beginning of the decade.

The 1990’s saw perhaps the clearest distinction between halves of any decade with more major company launches and more companies going into momentum than any other time in history. There was also more wealth being created by way of MLM from 1990 to 1994 than any other 5-year period. The second half wasn’t exactly the best of times for Network Marketing. If there ever was such a thing as an MLM recession, we had one from 1996 through 1999. Why? The very high unemployment rate from 1990 to ’94 and the sharp drop during the second half of the decade where it hit a 30-year low at 4.2% in 1999.

The only exception to this half-century long pattern is the 1970’s, but that was an exceptional decade.

Remember the last half of the 60’s industry growth slowed as unemployment dropped to a post-war low. During the first half of the 70’s Network Marketing started rocking as unemployment rates jumped. Unfortunately, all that started rocking some boats, and the result was over five times as many MLM related law suits from 1970 to 1974 than all of the 50’s and 60’s combined, and in 1975, there was a federal action, which essentially questioned the legality of Network Marketing itself.

Fortunately, one company, Amway, had the financial ability to defend themselves and the entire multilevel marketing industry. This case lasted until late 1979 when the court ruled in favor of Amway. As a result there was, for the first time, a clear delineation between illegal pyramids and legitimate Network Marketing companies. There was a pretty dark cloud hanging over the industry the last half of the 70’s and there wasn’t a lot of expansion in spite of the even higher unemployment rate.

The last and arguably greatest MLM growth phase began in 1990, the same year the U.S. went into our last economic recession.

1980 to ’84 were boom years for Network Marketing and we experienced recessions in 1980, part of ’81 and most of ’82.

1970 to ’74 were also boom years, and our economy was in recession almost all of 1970, and 1974.

Remember how the last half of the 50’s and into the early 60’s were years of great MLM expansion? We were in recession from ’57 to ’58 and most of 1960.

Now, most recessions last 12 to18 months, but the end of a recession doesn’t mean that’s the end of a slumping economy or high unemployment rates. We’ve had eight recessions in the last 50 years, and during the 12 months immediately after the “end” of the recession the unemployment rate went up! Every time.

Strong evidence. And we’re only on Reason Number One. Let’s talk about an even more powerful justification to believe in a coming Network Marketing explosion.

Reason Number Two – Demographics.
Not only is the pool of eligible prospects increasing at unprecedented levels, but the segment of society most ready, willing and able to pursue MLM is also exploding.

There were about 76 million babies born between 1946 and 1964, which at the time accounted for almost one-third of the entire U.S. population. Since then, it has been glaringly obvious exactly where this giant bubble in the population is at any moment in time by simply looking at what products are most popular. And when in comes to charting the market size for what most Network Marketing companies offer, we’re not even half way up the curve yet! The market for products that will make us look and feel younger is going to continue to expand most dramatically over the next 5 to 10 years as the boomers reach their 50s and 60s.

But this baby boom is exciting for another completely different reason. Virtually all Network Marketing companies require distributors to be at least 18 years old. Well, guess what happened about 25 years after the baby boom? Those 76 million boomers had about 75 million babies. And about 41 million of them will turn 18 over the next 7 years. At no other time in history, other than the original baby boom itself, have this many people been added to the body of eligible MLM prospects in this short a period of time.

Of course, the people eligible to join are not as important as the number who actually are joining.

The Direct Selling Association (DSA) conducts an Annual Survey of salespeople in the industry. (Keep in mind two-thirds of these direct sellers are Network Marketers.) According to their analysis, there was a net gain of 400,000 direct sellers from 1997 to 98. A 600,000 net gain from ’98 to ’99, and a 700,000 distributor gain from ’99 to 2000. Not only is the number of people increasing, but the increase in the increase is increasing!

If we do nothing more to extend this current figure forward for another 10 years, we end up with 4.7 million additional network marketers.

To put that in perspective: It took MLM over 50 years to grow to 7.5 million, and we’re conservatively projecting adding another 4.7 million in just the next 10 years! (By the way, that means the average networking organization will be 37% larger!)

And as far as demographic reasons for believing in an upcoming MLM boom, we haven’t even discussed the very best one!

According to Gallup Polls, the average age of all Americans when they first decide to invest in a residual income-producing vehicle, such as stocks, bonds, real estate, or perhaps in a business venture, is 42. The average age when we invest the most into such devices is 47. If we were to graph the number of 42 to 47 year olds in the U.S. we’d find that starting about 1988 the line begins to point upward at almost a 45º angle as the boomers started turning 42 – and that line continues to rise at a level never before seen in history all the way to the year 2009.

We are barely past the halfway point of that dramatic upward curve!

Does this really benefit us as network marketers? Are 40-somethings more open to MLM opportunities?

Well, the average American is 36 years old. According to a MarketWave survey of over 6,000 network marketers from 1990 to 2000, the average network marketer is 38.6, and that number has consistently risen over the years. An exceptional number of those over 40 do participate in Network Marketing, and this segment of the population which is most ready, willing and able to invest in a residual income business venture is going to continue to increase dramatically for another seven years!

Reason Number Three – Wall Street.
Securities investors look for companies and industries that are about to rise up fast, and thousands of analysts are looking closely at Network Marketing right now.

Professional investors are a pretty savvy group of people. Based on their due diligence they eventually invest their funds in companies whose growth (and profits) they expect to go up. So, what do they see when they turn their magnifying glass on Network Marketing companies?

There are over 20 publicly traded Network Marketing companies, but the bottom third are so small I’ll focus on the top 12 well established companies. If you were to chart their stock price over the last 5 years, starting with December 1996, in almost every case you’d see a line that looks a lot like the path of an airplane – coming in for a landing. With few exceptions, MLM company stock values flattened at their all time lows and stayed there for about two to three years. Clearly, Wall Street wasn’t impressed with Network Marketing’s growth potential the last half of the 90’s.

What do they see now?

Well, the benchmark S&P 500 reached its peak in September of 2000, but by mid-December 2001, it was down by 23%. Over the exact same period our index of the top 12 Network Marketing companies was up by 8.2%! And all of a sudden, in the last 12 months, these Network Marketing companies are outperforming the overall stock market by over thirty percent…. That level of performance really gets investors attention!

Number Four – Supply and Demand.
The greatest inhibitor of MLM growth the last few years, has been a huge supply-side glut of networking opportunities. That’s already changing.

Anyone who got even a C in Economics 101 could tell you about Supply and Demand: An industry booms when demand dramatically increases. When there is a tremendous increase in supply, it results in a down-turn. And sure enough, during the massive proliferation of MLM companies the last half of the 90’s, we had a deep industry slump.

Based on a survey of MLM company software suppliers over 4,900 MLM companies opened from 1994 to 1997, and there is anecdotal evidence to show that there were about 3,600 start ups in 1998 and 1999 alone. What’s even more troubling is that perhaps half of all MLM start-ups don’t go to the major software houses, but rather hire in-house programmers. Therefore, it’s possible that the actual number of start-ups could have been double these figures.

As many as 13,000 Network Marketing companies may have launched from 1994 through 1999. There were at very least 8,000- but we only had a net gain of about 600 companies, from 900 to 1,500. Have you ever heard the claim that 95% of all MLM companies fail in their first two years? I thought that was just a scare tactic spread by older companies, but these surveys say that’s true!

Now, during this same time period the number of network marketers in the U.S. increased from only about 5 million to 7.5 million. That means the number of distributors went up about 50%, but the number of companies increased by three times that much!

If you do the math, you’ll learn this means the average networking downline shrunk by 40%. There is no question that the supply of MLM opportunities far exceeded demand the last half of the 90’s.

So, what’s the good news?

Well, some very encouraging things began to happen in the year 2000.

It’s very clear that the number of start up companies has declined significantly since the beginning of 2000. This, along with the increasing number of company mergers and acquisitions, will only make the industry stronger. As more and more companies entered the market the available distributor base was spread thinner and thinner. The result was smaller downline organizations, higher attrition, and generally far fewer success stories. But think about it: if there were just as many distributors, but half as many companies, the average downline would be twice as big- yes?

I’m not suggesting the number of companies will contract to half, but any reduction in supply will certainly help increase demand, which will then expand the number of those men and women getting into profit and reaching their income goals. The more success stories we have, the more motivation and less resistance we have to building our organizations even larger- and the cycle continues upward, rather than down or flat as it has in the past.

Reason Number Five – New Blood.
Our entire industry is about to go into momentum for the same reason individual MLM companies enter momentum- a massive influx of folks who’ve never been in Network Marketing before.

Almost every Network Marketing company today would like to think they are about to go into momentum. Momentum, as it applies to Network Marketing, is the stage in a company’s growth cycle where sales volume begins to increase geometrically and the company doubles, triples, and perhaps even quadruples in size in a very short period of time. Most momentum phases last about 6 to 24 months.

Much like buying a stock right before it goes up in price, most networkers want to attach themselves to a company right before it explodes. Thus, practically every distributor will try to make a case that their company is “about to go into momentum.” How do they know?

They don’t. No one knows exactly when the momentum phase will kick in, but much like stock picking, we can look for clues- historical trends and patterns to help us make better guesses.

An analysis of all the successful major Network Marketing companies shows that every momentum phase in MLM corporate history was facilitated by massive numbers of people moving into the opportunity – either as reps or customers – who have never been involved in Network Marketing before. Momentum is never the result of people moving from one company to another. Momentum is ONLY caused by a massive injection of new blood.

Where is this new blood going to come from?

There are a little more than 7 million people participating in Network Marketing in the United States. That means there are about 270 million who are not involved! And that also means that there are literally tens of thousands of success stories just waiting to be written.

So, how are we going to expose those massive numbers of people to our products and opportunities that we’ve never been able to reach in the past? (How many you saw this coming…?)

The Internet.

You may be thinking, yeah, yeah… but the Internet’s been around for years. Well, the Internet may have been around in 1990, but it didn’t come into it’s own until after 1995. By 1998 the number of people on the Net had almost tripled. Today over 60% of adults are on-line and many predict that virtually all Americans will be using the Internet in some capacity by the year 2010.

And it wasn’t until around 1997 or so that the Network Marketing industry really began to use – or a better term might be “abuse” – the Internet. There are exceptions, but for the most part MLMers got a little over zealous with this amazing new technology. Rather that use the Net to help us build our downlines and sell our products, it was used in a magical-mystical attempt to have it build our networks for us. The result was big recruiting numbers, but very little sales volume and overwhelming attrition…

The Internet was also abused in other ways.

Like so many other dot.coms there were a lot of failures. Some were ugly. There were numerous legal abuses resulting in several well-publicized closures. The Network Marketing industry painfully cut its Internet teeth from about 1997 to early 2000. And now, as the smoke clears, what is beginning to emerge are the remaining responsible, visionary companies that knew all along the awesome power of the Internet was not in having it do all the work for us, but rather having it help us present our products and opportunities faster, less expensively, and to far, far greater numbers of people. New people, who’ve never been exposed to Network Marketing before.

The Internet is a sales, training and prospecting tool with unimaginable potential. And it’s an industry that itself looks to expand by 100 million users domestically over the next 10 years. As this happens, Network Marketing will soon go into momentum the same way everyone of it’s post-momentum companies did- by a mountainous wave of new blood.

They say a rising tide raises all boats, and this Internet tidal wave could even cause an unprecedented event in Network Marketing history – the “secondary momentum phase,” where large, post-momentum companies actually achieve momentum again!

But the Internet isn’t the only reason I believe we’re on the verge of massive “outer circle” recognition. Another fact that’s hugely compelling is…

Reason Number Six – Positive Media Exposure.
If the mainstream media were to find a way to make money from this industry (that typically doesn’t advertise) they’d have a much greater incentive to promote the positive side- yes? They’ve found a way.

Radio, television, magazines and newspapers all exist primarily on advertising dollars. But Network Marketing is an industry that doesn’t advertise in the mainstream media. After all, we’re the “word of mouth” business. Not only has the media had no financial incentive to promote MLM, it actually has a financial incentive not to…

Well, that too is changing. The mainstream media is just now discovering how to cash in on Network Marketing.

The first big step in this direction was back in 1994 when Success magazine published a front cover focusing on Network Marketing and a lengthy and extremely positive feature article about our industry and its people. Sure, the companies that knew they were going to be mentioned ran big ads, but that’s not where Success made the most money. The people of this credibility starved industry sold out the entire run of that issue and Success magazine broke their all time single issue sales record by almost double! The result was a lot more positive portrayals of Network Marketing companies in future issues. But even this isn’t where the greatest promise lies in terms of positive media exposure.

Let’s say, instead of paying for an advertisement, a network marketer worked out an arrangement where he sponsored the publication itself, got the ad for free and the resulting sales volume and downline commissions that were generated from the ad went to the magazine? They could potentially make far more income from overrides than from ad fees, even long after the ads stop running. It’s more than just a win-win scenario- we get the positive press and the media gets even more money than if they charged us for the ads. But would this work?

It already is. Slowly, quietly, such a movement is taking place. I know for a fact that there are currently over 100 radio stations in the U.S. attempting this, and some are succeeding, big time. Yet, virtually the entire Network Marketing industry is oblivious to the fact this is even happening. It’s simply a matter of time until the media grapevine picks up on this phenomenal ad revenue resource.

And let’s not overlook the public image boost we’re getting from the various athletes, celebrities, political figures and medical authorities Network Marketing is attracting like never before. And not all are paid endorsers. Many of them have careers that are based on their reputation and positive image and they’ve openly and willingly attached their good names to Network Marketing. We’ve also got well-respected mainstream authors and keynote speakers such as Richard Poe, Paul Zane Pilzer, Mark Victor Hansen, Brian Tracy and Robert Kiyosaki, extolling the virtues of Network Marketing. This kind of powerful, third party validation has never happened before. It’s just starting, and it’s growing fast!

And finally, in the recessionary wake of the dot com disasters with high-techs at all time lows and the fears of finding yet another Enron- or three or four-do you think the media can continue to ignore all those corporate and individual Network Marketing success stories? They can’t. And they aren’t!

Number Seven – Federal Regulation.
I know it sounds scary, but it’s not. In fact, more and better laws will be the #1 legitimizing catalyst to the MLM explosion.

Earlier I showed you that in the first half of every decade MLM outperformed the second half- and that’s been the case for the last 40 years. But there were more than just economic reasons for this. The regulatory climate has also effected the performance of the industry. The most obvious example being the previously mentioned federal actions back in the 70’s.Legal attacks by state or federal authorities on high profile Network Marketing companies do occur from time to time. Curiously, they seem to peak in pre-election years (but that could just be a coincidence:-). Most of those larger companies, by the way, not only survived the attack, but also are considered today models of legality whose policies and enforcement systems are emulated by younger companies.

Yes, there have been many situations where pyramid schemes have been shut down, and typically the action is described as “the Network Marketing company was shut down because it was an illegal pyramid scheme.”

It drives me nuts when I hear someone make a statement like that. It’s like saying, “A really honest man was exposed as a liar.” Well, then he wasn’t an honest man was he? Either you’re an illegal pyramid scheme, or you’re a Network Marketing company. You can’t be both.

I want to make this very clear before we go any further: Illegal pyramid schemes often try to disguise themselves as Network Marketing companies, because they want to appear legal. Unfortunately, when the press reports on illegal pyramid schemes, we all suffer guilt by association. And that does have an effect on our ability to retain good people and acquire new ones, at least temporarily.

The good news is that the last few years we’ve seen really no significant legal attacks on Network Marketing companies, and several closures of illegal schemes. Not only does this make the industry stronger due to a smaller, higher quality pool of legal opportunities, but it also increase our ability to build businesses because we don’t have the negative public stigmas creating greater resistance toward the industry and its opportunities. It also demonstrates a greater ability among regulators to delineate between pyramids and legitimate MLM programs. This is especially encouraging and comforting to those networkers who’ve built substantial incomes in “high profile” opportunities, or those who intend to.

Once again, I’ve saved the best news for last.

There is active, professional lobbying going on right now by the Direct Selling Association (the DSA) and others, to enact legislation that will create federal regulation of Network Marketing. As it is now, operating a Network Marketing company in the United States is kind of like trying to do business in 50 different countries. Each state has it’s own set of laws pertaining to business opportunities, some specifically about MLM, and all have statutes pertaining to pyramid schemes. Although, for the most part, each state’s definition of an illegal pyramid is consistent with the other 49, the interpretation and implementation of those laws has been somewhat haphazard and arbitrary over the years. It’s true that there was a significant legal precedent created by the federal court’s decision in the Amway case in 1979, but still, enforcement actions have been inconsistent not only between state and federal precedent, but from state to state, and sometimes even from case to case within the same state.

Many of these cases involve judicial opinions as to whether distributor’s personally consumed products by should be recognized as legally commissionable sales. This the focus of the federal legislation currently being proposed and several states, including Texas and California, have already recognized such volume as bona fide.

Not only will unified federal regulation create a clear, consistent path for all Network Marketing companies and state regulators, to follow, but also, much like the federal regulation of franchising back in the 60’s, it will eventually require true and full disclosure. If this does come to pass, and many believe it will, it would absolutely be a good thing- very good. Not only will it tremendously strengthen the industry by weeding out the bad apples; it will cause the massive turnover rate among start up companies to drop to a fraction of the current level. They won’t start up in the first place. And the ones that do launch will have to be serious players with solid backing. So not only will more distributors be involved in fewer companies, but those businesses will be only the highest quality opportunities. Federal regulation will also greatly increase the respect and credibility of our industry. This will create a tremendous boost to all established U.S. based MLM companies.

There are some people who are still apprehensive about the prospect of federal regulation. They fear regulators may throw their entrepreneurial baby out with the legal bath-water. Not a chance. Not only are there over 1,500 Network Marketing companies in this country, employing tens of thousands of tax payers, and generating literally billions in sales and corporate tax revenue, there are about 5 million MLMers who are also registered voters. That may not be a big percentage, but as the 2000 presidential election clearly demonstrated, it’s enough to make a huge difference in who has the political power in this country. I’ve heard the argument made that back in 1963, congress came within 11 votes of outlawing franchising. Not only didn’t they, but the post regulatory era of franchising created an industry that now moves over one-third of all the goods and services in this country! Federal regulation was the catalyst to the biggest boom in entrepreneurial history.

Not only do I not fear the concept of federal regulation, I find the vision of this new era of Network Marketing to be absolutely exhilarating!

Last, and certainly not least;

Reason Number Eight – the current, positive and powerful Growth Trends of the Network Marketing Industry itself.

Since the top twelve publicly traded MLM companies provide the most reliable information, and they make up the majority of the largest, most well established companies, I’m again directing my analysis towards them. (Although an informal survey of un-audited data provided by private MLM companies reinforced these results.)

From 1990 to 1995 annual industry sales growth averaged about 16%, and some years was as high as 30%. However, if we track the growth of these public companies – based on U.S. revenue only – the average annual sales growth from 1996 to 2000 was 8.7%, with a low of just over 6% from 1999 to 2000. And the entire direct selling industry’s growth rate dropped to a 10-year low of 4.5% around this same time.

Based on this information it would seem that industry growth was about to come to a grinding halt – yes?

But instead, the growth rate of these companies from 2000 to 2001 was 14.6 percent – more than double the previous year’s rate!

Without question, the slowing trend has reversed. This is by far the strongest signal of impending momentum, when there is not only an increase in growth, but the rate of growth is also accelerating dramatically.

Now, one year of doubling growth rates certainly does not guarantee a boom, however, one thing is certain – every company momentum phase throughout MLM history began with that first exciting period of doubling growth rates. What do you think the chances are the same phenomenon holds true for the entire industry, as well…?

There you have it folks. Not one…. Not two…. But eight solid, powerful, verifiable reasons for finally believing in an upcoming Network Marketing explosion. No one knows exactly when it will happen; it could be next month…. It could be next year…. It could be anytime in the first half of this decade, before 2005.

All I know for sure is, if you get involved now, and stay involved, you will be there when it happens. Gold was at $43 an ounce , but is now at $1312.80 .  So hop on, strap yourself in, and get ready for the ride of your life. It’s gonna’ be a blast!

Seraphim