It turned out that the "upcoming incredible new product that will bring tears to your eyes" was another over-priced version of products already sold by a dozen direct sales companies and every big-box store in town. Later I learned that my acquaintance, and the team of fellow employees he signed up, are no longer involved with the company and bad-mouth the industry every chance they get.
Sadly, my acquaintance had fallen victim to Fatal Flaw #2, Hype and Disappointment - the most cruel and egregious flaw of them all.
Direct Sales/Network Marketing/MLM is famous for wildly over-promising and woefully under-delivering. We've heard the jokes: "MLM stands for Moms Losing Money" and a hundred others. However, the disappointment, hurt, financial loss and devastation is no laughing matter. The Internet is filled with thousands of stories of people who, in good faith, became involved in our industry to help themselves and their families, and ended up with crushed spirits, hopes and dreams...and in many cases, empty wallets. Each story reinforces the negative stigma and chips away at the credibility of our industry.
Why do so many people fall victim to hype and suffer the resulting disappointment? There are many factors; let's examine a few.
First, most people get involved because they genuinely want an opportunity to control their own destiny and create a better life for themselves and their families. While some may be driven by the desire to "get rich," the majority simply want to meet their basic needs and feel more financially secure in an uncertain, rapidly changing world. They trust that the industry (and the team they joined) will deliver on its promises. Unfortunately, 98% of the time it doesn't.
Second, it is easy to get in and easy to get out. Starting a Direct Sales business requires little up-front investment, $100 or less, and if it doesn't work out, not much has been lost. Compare to the enormous cost and risk of starting a traditional business with all the planning, bank loans, storefront, employees, regulations, etc. - way out of reach for the average person. The ease of entry and exit is one of our industry's competitive advantages...and one of its greatest weaknesses.
We contend that the low barrier to entry encourages rapid turnover, tire-kickers, lax commitment and poor choice of those who are not a good fit. We do not advocate raising the cost of entry; we want the industry to remain accessible to all. Instead we prefer a more thoughtful and wise approach to teambuilding and stricter standards for the selection of those whom we sponsor.
Third, it's often a case of the blind leading the blind. We may be recruited by people who are themselves just getting started as entrepreneurs and have not yet mastered the attitude, mindset and skills necessary to build a successful and profitable business. Ask any business owner - the learning curve is not something one can master overnight.
In our industry, recruits are told that simply following "The System" and talking to lots of people is all they need to do to be successful; that somehow, "The System" substitutes for years of hard work, sweat, tears, learning and experience. When people fail, they are blamed for "not surrendering to The System" or not working hard enough. As we shall explore in our next blog post, Fatal Flaw #3, the concept of a "duplicatable system" is delusional, bogus and unworkable.
How do we identify and avoid the hype?
Very simply, when we hear these words from the smiling Big Earner on the stage or the Acolyte at the coffee shop: "It's easy and anyone can do it." "You can become wealthy in only two to four years." "If [Big Earner Name] can do it, you can too!" "Talk to everyone you know before someone else does!" "It's a ground floor opportunity." "Our company/service/product/compensation plan/etc. is the best." "God wants you to do this." and dozens of similar exhortations...run away as fast as you can.
Rule of thumb: If it sounds too good to be true, it most likely is!
Building any successful and profitable business takes years, especially if one is embarking on the entrepreneurial journey for the first time. If anyone tells you otherwise, it's disingenuous and pure hype. Walk away - no matter how seductive their pitch.
Instead, find an individual who tells you "it's not easy, and not everyone can do it." "Building a business can take three to five years, and there are no guarantees." "I've built a successful, profitable business - let me share my wisdom and experience with you." "Let's do this together, in the spirit of teamwork and service." In other words, rational, pragmatic, down-to-earth, reasonable statements that mesh with what we know to be true in the real business world.
In the New Paradigm model we recognize that Direct Sales/Network Marketing/MLM is no different from any other type of business, and that solid and proven practices (plus lots of hard work, persistence, education, mentoring, personal growth, attitude, mindset, skills and so forth) are necessary to build a successful and profitable enterprise that enables us to achieve our goals as we serve the best and highest good of people, community and planet.