Can we just give a warm [inaudible] welcome to Gordon? Thank you. Well, it's certainly a pleasure to be here. It's always interesting to be the dumbest person in the room, so I'll try to do my best with that. As Sandy mentioned, I've been in the direct selling industry probably longer than most of you have been alive, on 30 years. I came out of school as an accountant, spent my five-years in [inaudible] and went more of an entrepreneurial path that led me direct selling. I've been involved on all three sides of direct selling. I started initially as a distributor. If you were to think like Amway has distributors that market their products and services, I started on that side. My partner and I were able to build the third largest distributorship in the history of the industry. We did over 10 billion in sales, sold products in over 30 countries, had an active sales force of over 100,000 people, and interestingly enough, were paid in excess of $100 million in bonuses and commissions. So from the field side, I understand this business really well. When I got out of the field side and retired, I lasted four days and got brought back in. I don't do retirement well, apparently, to the consulting side. I was brought in to modernize one of the larger companies and that got me on the path of doing more industry consulting. Now, I work with direct selling companies, helping them evolve. Typically, when they're stuck, I get brought in to figure out why they're stuck and how to fix that, how to adjust culture. Then part of that is I have my own technology company that's based out of Serbia and we are basically a virtual tech company for a lot of direct selling and network marketing companies. I share all that with you because from the industry side I know a lot and then on top of that, I'm very involved in the association that oversees the industry called the Direct Selling Association. I've been on the research committee for four years. We now have a large academic initiative that Sandy is a part of, 217 academic institutions and I'm the industry liaison so I get the opportunity and the honor to speak to students all over the country and certainly it's a pleasure to be here at Emory. When we talk about direct selling, I suspect a lot of you are not really sure what that is. I think it's a very misunderstood industry. I'm hoping tonight that I can give you a little bit of clarity about what the industry is. But let's start here. These are companies that you might not realize are direct selling companies, but you're probably familiar with. Probably the largest on the list is Amway. They've been around for 100 centuries it seems like. Pretty good sized company, market in over a 100 countries doing about nine billion a year in sales. But you see more common names like Mary Kay has been around a long time, Avon has been around a long time, but then you see more modern companies like Team Beachbody the people who started the P90X movement and the INSANITY movement with all the infomercials,, and these are companies that live in the direct selling space. How many of you are familiar with at least one company up here by show of hands? Pretty much everybody in the room. I'll start here. I imagine you have perceptions about direct selling, in particular network marketing. What are those perceptions? What do you know about the industry? What have you heard about the industry? Anybody? Yes. Get in earlier or don't get in at all. Get in earlier. The timing issue. Yes. To be honest with you that there is some truth in that that when you get positioned in a newer company and it rises, you can grow quickly, but equally, getting positioned in more legacy companies necessarily can be good if you get in on a timing, on a momentum wave. It works both ways. Anybody else? Anybody been involved in a direct selling company or a network marketing company? Here's the big question: has anybody ever heard the term pyramid scheme? Yes. Just about everybody in the room. It's funny, my daughter just had a friend that got into this. She's a junior at Florida Southern and she's like, oh, they're in one of those pyramid schemes. It seems to be a common way of looking at the industry, but I want to dig into what the industry really is. Let's start here. What I hope to cover is to give you a snapshot about the industry, to dive a little bit deeper into the business model so you really understand how it works and the philosophy behind it, and to talk about the challenges. Because the challenges have a lot of value in a room like this because you guys are all achievers, your problem-solvers. It'd be fun to talk about the challenges and to get your ideas and see what you would do to help evolve this industry because at this point in my career, that's where I'm positioned as an influencer to change and evolve the industry. Let's start with the industry overview. If you look at direct selling compared to other channels, what you recognize is there is some common themes. In particular, there tends to be a manufacturer, creator of a product or service and there tends to be a place that it reaches the consumer. What tends to change is what's in the middle. If we look at traditional retail, you see stores and more infrastructure built around it. If you look at online retail and e-commerce, you're seeing more online stores and webs and platforms of that nature, but in direct selling, we market through people, through large groups of people, and that's what makes us unique. What is different today is that direct selling crosses over into other distribution models. Pretty much every company I know is trying to get a stronger e-commerce presence. We're seeing companies now, especially in the Far East, that are setting up experiential retail experiences and changing how the industry is working. There's a lot of innovation going but at our core, we are a group of entrepreneurs that market products and services to consumers through the people that we know. Now, if I really look at what drives this, it's a concept I call Entrepreneurial Crowd Funding. While you might not be familiar with it in indirect selling, you're probably familiar with it in companies like Uber and Lyft. These gig companies basically, took the same model, which was instead of hiring people, we're going to create an independent contractor entrepreneurial model and use that to help drive the sale of services and products to the consumer. I don't think it's a coincidence that the guys that started Uber used to be distributors for [inaudible]. They were actually direct selling distributors selling knives while they were in college and then ultimately recognized the value of the model. They were the face of all things, the gig economy. I will tell you the philosophy of this works really well and it is not just direct selling to the gig economy. I'll give you, for instance, I started my tech business last year after working with a group, my teams in Serbia, after working with the group. The business is now growing very rapidly. There are 24 of us involved in the business right now, so we're still small, but adding people every month. If you were to think about your business people, if you were to start a tech business and you're thinking," Wow, I've got to get Infrastructure, then I have 20 plus people working." What kind of capital do you think it would take to start something like that to make it successful? We've been profitable from month one, just so you know. Any idea? 500 K. 500 K, good guess. Anybody else? Yes. 20 K. 20 K. Okay, good. Anybody else? This is the interesting part. I started my technology company with $10 thousand, and that $10 thousand is still sitting in my account. Why was I able to do that? Because this idea of Entrepreneurial Crowd Funding using affiliates to drive sales is exactly what I did. I went to people I knew, that had relationships, and they brought me the relationships that created our client base, and we gave them a portion of that. A lot of times, when I'm now working with young entrepreneurs. One of the things I'm involved with is, I'm four years on the advisory council at Wake Forest University for their entrepreneur program. I'm always talking about kids using licensing and affiliate models to help drive their business. You're finding this concept of Entrepreneurial Crowd Funding has become really big. If you look at it in the gig economy, the last data I saw, it's about one out of every three employees are doing subside hustle. It's really changed the way things are working. Has anybody been involved in any type of entrepreneurial crowdfunding outside of direct selling? Yes. I started my company six months ago, and what you're speaking to, I am essentially targeting the use of CPAs. Because they have the pre-built relationships, they understand the budget, etc. I've been working to build a relationship with the CPA firms so that I can leverage that channel to access clients. I bet you're finding that's a lot easier to scale than to try to build all that infrastructure with employment cost. Yeah. Yeah, congratulations. There's a perfect example of somebody that isn't in direct selling, isn't in the gig, but using a more traditional model, and this entrepreneurial crowdfunding to help build a business. Indirect selling, there are really two different types of business models. One is true direct selling, which reminds me of the gig. It's an affiliate model where you're selling a product and service and there's one person that markets that, but they do not have the ability to create a salesforce, they only have the ability to create a customer base. What's different about network marketing or Multi-level marketing or MLM or relationship marketing or social selling, whichever term they want to use today, is that you can build layers of teams. If I look at when we built our business, bet we did the 10 billion in sales, we could build five levels of sales teams. When you build them right, you create an exponential growth that looks like a Christmas tree. Below that is all this additional sales force that when people go away, it just moves up, so you continue to keep growing. Today, network marketing ranges somewhere between 95 and 98 percent of all direct selling or network marketing companies. Why do you think that is? Why do you think it's the more popular model? [inaudible] Easier to grow faster? Yes. You can get more customers. Yeah, you can get more customers. If you think about it if the goal of the business model is to build a critical mass of customers and a salesforce. What's better than having your salesforce continue to be able to duplicate that. What network marketing does is creates leverage. What I always tell people, if you want to understand how to build business wealth, to me, it's just a formula. It's you times leverage. If you're building any type of a business model where you're the sole person providing value, your limitation is time. With network marketing, that goes away, because I can build massive sales forces and get paid off of their work. Network marketing has become pretty much all of direct selling these days. It is evolving, and we'll talk a little bit about that. The gig economy now is moving to a two-generation program. Two levels of pay so think about, if Uber drivers could get another Uber driver, there's a term for that, it's called a super affiliate. Where network marketing companies are shrinking. They're going down to less levels of pay. These worlds are coming together, primarily because your part-time person, that's really the foundation of it all, is who you have to systemize around. Network marketing is really evolving these days. If I look at it from a bigger scale, direct selling is really this massive Ecosystem. At the core of the ecosystem is the distribution channel. At the end of the day, if you want to know why direct selling grows is because we have growth in net customer growth. All over the world, more and more consumers use direct selling to buy products and services. The distribution channel has always been the center of it, around that is the business ecosystem. It's the direct selling companies like Amway, it's the salesforce like their IDOs and the distributors. Then there's this huge association called the WFDSA, which is the world federation of direct selling companies. There's 59 different global associations that make up that and they fight all the legal and regulatory battles. Then as you can see around this, there's this whole ecosystem of people that are affected by this industry. A good example to me would be the investment community. We see a lot of investment with startups, we see a lot of investment with PEs, we see a lot of merger and acquisition activity in the industry. As you'll see later, the biggest reason is because when you build these things right, they're massive cash cows. These people invest in the idea of cash-rich, cash-strong companies. We see more and more of this, we see more academics coming in the industry, a lot of legislators and policymakers. All this is what makes up the ecosystem, but what's important to remember about the model is the success of it comes down to this over here. The idea behind direct selling is to create more passionate brand ambassadors that believe in the industry and the products and services we sell and to them. The more effective we are at that, the more the ecosystem works. A lot of my work now isn't just with the field and the companies, but dealing with all these outside parties. Some of them are not necessarily big fans, there's always an interesting dichotomy. I give you an example, anybody ever heard of GaryVee? Gary Vaynerchuk? GaryVee is a really famous digital marketing guy that resonates a lot with the younger generation. He's in his '50s, he acts like he's 20. He gets in front of a room and he's, I don't want to say abusive, but it feels abusive to me, he's going to tell you what he is on his mind. To give you an idea of how he is, I saw him speak to a room of direct selling executives and the guy they brought him in is a friend of mine who own Success Magazine. He was smart enough not to give Gary the mic because you never know what Gary is going to say, but the first question he asked him was, "What do you think of print media?" Well, the guy owns Success Magazine and this guy is in a digital space, sure you already know what the answer is. He's like, "Print media is dead." Then he turned to my friend Stewart, he was, "Sorry about that, I forgot this is all your clients." That's GaryVee, but he has a massive global following. He talks to direct selling companies and he talks to the entrepreneurs, but in his book, somebody asked him a question about, if you were a new marketing, I can't find a job and they all seem like bad jobs, and he's, "You must be talking about the lowest common denominator, network marketing, because this scummiest of all network marketing things." This is big influence who's have an opinion on the industry. Always working to shift perception and to change anything that isn't positive toward the industry. The first thing you have to recognize about the industry is been around a long time, goes back literally to the mid 1800s. When I put on here, it's Positioned Right. What I want you to understand and what I think the data will support is that, you guys ultimately will see this as a meaningful improving distribution channel. I think when you see the numbers in the scope of it, it defeats the number one argument that we hear that this is an illegal pyramid. You can think about how can you have an illegal pyramid that has 200 billion a year in sales and 120 million people involved in it? How can anybody pull that off as something illegal? Let's start with the sales force. This is data going back from 1991-2008 that's put out by the Direct Selling Association. If you were to look at this, how would you define this trend line? Pretty simple. Upward trend line. As you can see through all kinds of economic times and business cycles, it stayed relatively strong. It really took a big jump in 2010, you started to see an escalation in the growth rate. Anybody know why? Why do you think that there would be an escalation in 2010? Yes. [inaudible] lost their jobs and decided to take this up. Yes. This wasn't too far after the recession. That's a great guess, but it was something else. Anybody? Facebook. Yeah, social media. All of a sudden, social media came together with direct selling, and this force changed the trajectory of the industry. It's interesting that as you look at it now and it starts to slow down, like in the US, we've had three of the last four years sales had been down. Part of the reason people say it's down is because of social media. There's so much of the same noise of direct selling that at some point people just get deafened by it and they turn off the social media, but today, the big players in direct selling are pretty much all social influencers. They're the people that have big audiences. These are people I spend a lot of time with all my personal branding work, but this is what changed the trajectory of the industry. If you remember the first was sales, but if you look at the sales force growth, you start to see the trajectory is much bigger, but follows a similar pattern in terms of a long-term uptrend. To give you some perspective of this, I thought I would compare it to some economic indicators that you might be familiar with: population, job growth, and GDP. If I were to take, for instance, the sales growth compared to GDP growth from 1991-2017, the industry grew at about 123.84 percent. But if I look at it compared to job growth and population growth, you start to see that this is an industry that's become hugely popular globally and is beginning to have a much bigger impact in a much faster trajectory of growth than traditional economics and traditional growth. When we talk about the landscape, so Direct Selling is available as a business model in over a 170 countries. As you can see from this, it is primarily comprised of four major regions. Asia Pacific, North America, South and Central America and Europe. To give you an idea, these countries make up what we call the $24 billion dollar markets. These $24 billion markets make up 93 percent of the worldwide sales and almost 90 percent of the entire sales-force. This has a strong right tail. These industries control everything. What we're starting to find, what's interesting is the smaller markets are starting to find traction. As you start to develop middle-class, we're finding these smaller markets like Vietnam is a good example. Abu Dhabi, there's stuff going on there, the UAE, we're starting to see pockets of things starting to grow. We suspect over time, as the global market changes, we're going to see more and more of the smaller markets come up. But this dominance by the bigger markets has been this way for as long as I've been looking at the data, literally going back to the 1980s. The only thing that's really changed is at one point, Japan was about 44 percent of the worldwide sales and now they're down to 14 percent, so they were the market that really lost a lot of share over time. If we look at what's sold in the industry, the answer is everything. The large group of things are obviously wellness so you'll see a ton of nutritional products in this space. It's actually a crowded space, but it's something that's been in an uptrend for many years and home goods in particular, like cosmetics and soap like Amway, those kinds of things. But as you can see, everything is sold in direct selling. You have companies like Ambit, who's on the top 20 list. They sell energy of all things. When they sell energy, it doesn't show on this list, but it's a massive market, but then there are a billion-dollar company in this space. Now let's take a deeper dive into the business model. This is where we can start making this a little bit more interactive. This is the business model that drives all of Direct Selling. If you look at it from a business perspective, it starts with sales so the revenue component. Then there are three major expense buckets; cost of goods sold, operations, and commissions. Remember what the commissions is a big issue because everything works through the Salesforce. As you can see, the target of these is 15 percent cost of goods sold, 15 percent operations, and 50 percent commissions. If you wonder why a lot of sales people gravitate toward network marketing and direct selling, ask yourself this question. How many of you that would have a sales job would get paid 50 percent of sales? It's sort of unheard of, but it also creates challenges. Where a lot of business owners are interested in the market, in this model, especially the investment community, is because of this, that you can generate about a 20 percent EBITDA. You can actually do higher if you run these components a little bit better. So it's a very attractive cash on cash model. There are really two core components, the distribution channel and the business opportunity and both are in some form of an evolution. If we're going to talk about the business or the distribution channel first, we have to talk about pricing. You guys are distribution experts. This is your class so you know what markups are on products and that stuff. If you look at the models that exists in Direct Selling, there's basically two of them. One is a party plan model, which is like [inaudible] , which has home parties and they market products at the parties. What's unique about this model is it tends to have a lower cost of goods sold. So lower commission, lower markup on the product, easier to create end consumers, and it has a faster payout. Because a lot of times if you retailing things, you can make money at the point of sale. But this is a small portion. The MLM is the bigger portion. As you can see, the thing that really jumps out is these products are marked up six to 12 times cost of goods sold, which is a pretty big markup. One of the challenges that we're having in the industry is e-commerce is growing as a distribution channel. We're running up against a price challenge that our industry, if we try to compete with what's sold on Amazon, you can just buy it much cheaper. A good example would be, I recently met with one of the billion-dollar companies and their biggest problem was Amazon. I was like so what exactly is the problem with Amazon? They said every product we have, they sell on there at $0.25 on the dollar. How do we fix this? It's an interesting question. If you go back to the model that we talked about. Let's go back a slide or two. You're looking at this model. How would you solve this problem of pricing so that you can stay competitive as a business model? Where would you focus your attention? I'm trying to understand the model of EBITDA, these are different segments. You have, let say Medicare for an example, let's say cosmetic company. What is the 20 percent EBITDA? If I am a Medicare agent, I get 20 percent. I'm trying to understand, does Medicare make 20 percent? Profitability on the company [inaudible]. That's their bottom line, profit cash on cash profit. They're getting 20 percent from the sales. Yes. Are they are paying commissions of 50 percent to that agent? Yes, in different force, that's necessarily not one person because the network marketing, that's going to be spread out. Weighted depending on who's pulling how much weight and all of that. The only channel is through people and not an online channel. That's a great question. Forever, the only distribution was done through the sales force, now that's evolving. You're starting to find companies that are actually competing against their sales force that are running almost e-commerce operations outside of their sales force. One in particular that I work with in Charlotte, North Carolina, their belief is; we're going sell everything through e-commerce and what our distributors get is the lessons that we learned that we can apply to their replicated websites to make them more successful. Five years ago, that was unheard of in this industry. Everything was very much about the field doing everything and that is evolving. But going back to the question, if you are going to sell and you knew e-commerce was there and you had this big markup of anywhere from six to 12 times cost of goods sold, where would you look to evolve the business model? Where would you take it out of? Would you take it out of operations, costs of goods sold, commissions, would you lower the EBITDA? What what would be the logical target? Yes. [inaudible]. Commissions. How many would agree if commissions is the most logical place to look? Yeah, absolutely. It is a challenge for some of the people that have compensation plans that had been in place because if you change the compensation plan and you lower the payout, people are not going to get paid as much, or possibly, you might shift the compensation where your retailers are making more money, but the people that are in building the organizations aren't making as much money. But yes, that's a great answer because at the end of the day, you can only do so much with cost of goods sold. Probably the best example of somebody lowering this, I know one company that their cost of goods sold is about five percent instead of 15 percent. Save a little bit more flexibility. If I look at the operation side, typically you will find for every employee there's about $1-1.2 million worth of sales, we had a company that'd come in and innovated, created an online operation. They didn't have an office. When I looked at their sales per employee, it was over $10 million. You can do stuff on the operations side, but ultimately it's the commissions that have to change. If you can't lower the commissions, then you can't necessarily lower the price. At that point, you have to go back to what always make direct selling work, which is people to people selling it. It's the relationships of that. Part of where we're struggling a little bit in the industry is, we've always been a people to people business and now we're trying to be an e-commerce business and competing in a distribution channel that we're not experts at, that our business model isn't really built for. If I go now to the actual business model itself from what I would call this relationship stacking. If you think about what relationship stacking is and how that relates to the business opportunity side, everything is about customer growth. The more your customer growth you have, the more you sustain the viability and success of your field. After the customers, the first thing you have are your micro-entrepreneurs. They're your part-timers, that's the whole gig world that we're competing against. As you can see, they represent between 85-95 percent of the field. Typically, people make anywhere from $0-1000. Now, this brings up an interesting question; why do you think people that make no money continue to work this business model? Because it is a business. [inaudible]. I'm sorry. [inaudible] I'm sorry, that that is per month. Sorry about that. For some people, it is per year, but it's basically a monthly figure. How many of you would sign up for a business opportunity and continue to do it if you weren't making any money? With the hope of making money at some point. Hope can be a big part. You continue to get people to believe in the future. But at some point, hope can only carry us so far because you have to deliver on hope. Ultimately, why do you think they do it? Because they're getting a discount on products. Yes, that's a good point. About three years ago, Herbalife got in a lot of trouble, and it became this movement called customer segmentation. We looked into the distributor force and said, "How many of you have no business intention, but just really wholesale customers?" It is about 70 percent of the distributor force, so that's a big part of it. But let's take the 30 percent. Because most of them aren't making money either. Why are they here? Yes? I don't think it is the people like us, I think it is the people that need the money more that are out there, and they're doing it part-time in addition to full-time to supplement their income, because they have to. Yes, so like the gig economy. About 40 percent of the gig economy, the part-time people, are only doing that to be able to pay their bills. It's not like there's some windfall after that, so common problem. But there's another reason why people stay in this. The relationships that they have built. Relationships is a big part of it. Okay? What else? Yes? Is it because they don't have to spend a lot of time to make that amount of money. I don't know because if they become the customer base and they don't really need to do much from month to month, I mean ever [inaudible]. Yes, so that's a good point. There are two studies done in the industry that say why do people leave. Both study came to the same conclusion that the number one reason is time value proposition. It's just not money, it's the time it takes to make the money. If for instance, you're making $500 a month and you're spending an hour, all of a sudden it looks like a bad time proposition, but what if you're spending 30 hours a week to make 500 bucks. Then it's an entirely different issue. You've got to remember, wealth is created through critical mass, so it usually takes time to build a significant income. But there's another answer. Yes? Does it have to do with proximity to individuals that are highly successful in the business? That border lines on what it is. What really makes it work are more intrinsic things, personal growth, finding significance in something belonging to a community, having new friends, building relationships. There's so much involved with what I call cultural addiction. The idea of putting people and holding them into a community. The interesting part, if people were to ask why were we so successful? The reason was because I mastered cultural addiction. I know how to build community, I know the whole behavioral game of that. I didn't need all the people to make money. If 90 percent of the people didn't make money, I can still hold them into the business, because I knew that value wasn't always about money, it's about other things. That's the way we teach the industry. Part of where we have a, what I will call a reputation challenge, is because of this down here. If you hear people talk about network marketing, you'll hear the extreme stories. You'll hear, the guy that I build with, a 100 million in commissions, 300,000 a month for doing nothing. Then everybody's like, "Oh yeah, I want to sign up for that. When do I start? When do I get my 300,000 a month?" The reality is, if I were to take this figure at 20,000 a month, about four out of a 100,000 active distributors make that kind of money. This is a very much of a part-time model. The problem is, when you tell everybody that this is the rule, not the exception, and you don't tell the whole story. This has been a lot what's created a lot of the perception challenges and regulatory and legal issues that we have is just not telling the whole story around the opportunity. Do people make this kind of money? I know literally, the 100s and 100s of people that make this kind of money. But the reality is for every 100 of them there's probably a 100,000 that don't, so we try to tell the entire story. But ultimately if you look at this, if you hold customers, you'll hold micro-entrepreneurs, part-timers, through the foundation. If you hold the foundation, then you'll create junior leaders. If you create junior leaders, you can create leaders. That's the relationship stacking game. Part of why the industry works well and the people that are successful was that, we're really good at holding relationships and stacking them on top of each other. Yes? Could you tell me a little bit about the demographics of the micro-entrepreneurs in that 30 percent that you were talking about. Yes. That 30 percent that you are saying doesn't make money, but wants to feel belonging. What is the demographics of that 30 percent segment? Great question. The demographics in the US, in particular, female, so 80-85 percent, most of them are educated, middle to upper middle-class, and have a spouse that makes enough money where money isn't an issue. All of a sudden, it's almost like a club of moms and housewives that want to get together and build a business. That's been the demographic forever. What's changing is there's been a shift in demographics. Today, the average age of a direct selling distributor in the US is 46.3 years old. We're now seeing all these Gen Ys come in and now Gen Zs, so we're seeing this new group of people coming in, and the synergy of this has been very challenging for companies because my generation, I'm ancient, unfortunately. We put a lot of value in loyalty. We stay with things. A lot of the younger generation moves quicker. If they have a better opportunity, they have no problem picking up and they're very good at what they're good at. They're good at social media and personal branding and building all the architecture around that. We're seeing more and more movement of people. There's a lot of discussion about how do we build culture for this next generation, these Gen Ys, at a time where in my generation has always been the foundation of it. But that's what the demographic profile is. The other thing that's interesting is the largest demographic profile that's growing is the Hispanic community. We're seeing more and more of those coming in, and they seem to resonate really well with the business opportunity. When we talk about the evolution of direct selling industry, I'll start here because I'm always telling people this. The greatest danger in times of turbulence is not the turbulence, it's to act with yesterday's logic. Part of the reason if you ever involved in an industry or a company or leader that isn't evolving. Oh my gosh, I hate to tell you how many experiences I've had with those situations. What you recognize is, innovation and relevancy is really about a mindset and about taking risk. A lot of legacy companies and traditional leaders tend to stay with what they know. Ultimately, you can't really build a next-generation company with old school thinking. Let's just take a basic example. One of the fundamental principles of direct selling is you got to build a customer base. That was the same way 50 years ago, which changes how you build a customer base and where it's done. That's where the evolution is. We see really fast-growing companies like a good example is a company like Unique. Is anybody familiar with Unique? They are a cosmetic company and their claim to fame was they built a hero product that was a last product that they sold over 10 million of them. They started the business, the guys that started it we're not salespeople, they weren't entrepreneurs, they were programmers. They systemized around the micro entrepreneur. They're all idea was you got to be able to run the whole business from a mobile app. It took them four years to build their business up to evaluation of a billion dollars, sold 60 percent of it for $600 million and they ran, but why did they do this? They came in with technology being the way to build efficiency to the business, and because of that, they scale really easy. Imagine if I told you, Okay, you're in the US, I want you to go to the UK. Think about from an infrastructure standpoint what it would take to do that. Because of the way their technology worked, they could go to any market with one full-time person and scale a market. That is unheard of in our industry, and they brought that type of innovation to the industry. It's important to understand that this pursuit of relevancy requires very new thinking. If we look at where we're really focused, it's a movement back to the customer-centric focus. Let me explain what that means. If you think about culture and you think about what drives culture, it's always been one of two things and direct selling. Either you lead with the opportunity, so everything becomes about lifestyle and the business opportunity, and how we're all going to get rich and we're all going to own mansions and cars, or you focus on marketing products and services to consumers. The industry started very customer centric, moved out of that for about 50 years, and now it's moving back to being more customer centric. We're seeing a lot of systemization around that. The other is there's a lot being done to drive engagement and efficiency on the operation side. Engagement is think about what happens after somebody joins the industry, whether it's a customer or whether it's a distributor. Then of course, we're always battling the perception about the industry. Let's talk about the headwinds and tailwinds because this is where we can have some conversation. We already established that one of the tailwinds it's helping us is we do have proven and meaningful distribution channel. We have a large global footprint and it continues to grow every year, very good for our business. We see a growing number of passion in the ambassadors. As I mentioned earlier, because of what happened with Herbalife, we've seen this customer segmentation movement. Just to give you an example of how much that makes a difference. In 2018 in the US, we saw sales pretty flat, recruiting was down over 11 percent. The Salesforce dropped over 11 percent, but yet we saw growth in the industry. The reason was because preferred customers, so customers on auto reorder, buying at a discount, went up 48 percent for the year. Why? Because all of a sudden we're focusing on customer because customer-centric is really important. The other thing is, in network marketing and direct selling, what's common is what I call the personal branding revolution. This is where I tend to spend a lot of my time these days. Personal branding is the idea of building a brand within a brand. If you think about network marketing of Almond Amway Distributor or Juice Plus Distributor then I want to be able to build my own brand within that, not just have accompany brand. I was telling the story to [inaudible] earlier. I get involved with the whole personal branding thing because a mom came up to me at a conference I was speaking at, and said, " Oh my gosh, my daughter is a really successful social influencer, and she's in high school and I'd love to flyer her to meet with you so you can give her some business advice." I was like, " So tell me about your daughter." "Well, she's 17 and she's making $53,000 a month while she's in high school." I'm like, " Well, I'd like to meet her. I'm curious what she's doing." So she flies them and she started building Instagram branch. She build seven of them from the time she was 14-17 and she had about 10 million followers. What she did, she sold time into her business. If I was Sephora and I wanted to market a product into her network, I would pay a 150 bucks an hour to keep a video playing in her network and that was her business model. I remember meeting with their thinking, well, a 150 bucks an hour is not a lot of money for a fashion brand having about 8 million people in it. It doesn't seem like a lot of money for that. Is there anybody you know, that's doing the same model and being paid more? She got, " My best friend runs the social media Instagram account for Kylie Jenner." Of course I knew who Kylie Jenner was. I don't know much about her, because I don't watch whatever that show there is. I'm not even sure what the show's about. But I said, "So what does she pay?" Said, "three to $500,000 every time she plugs at somebody in," and I wonder why she's a billionaire. I started realizing that in today's world, this idea of personal branding is hugely important to everybody because you have to know how to market yourself. You have to understand that influence is a form of capital in the marketplace today and the more successful you are at this, the more you have opportunity, and deal flow in relationships. I built this architecture around it to show not only how to ideate and create a brand, but how you create visibility and how you scale it. A lot of my time I've got to work with really young entrepreneurs that have call it 16 million and up followers, so really big players in the social influencer space. What's been interesting is not just in direct selling, everywhere I go, the social influence are the ones that seem to be rising to the top. We're seeing personal branding work well in this industry and we're starting to see it work outside of the industry. Usually, it's a funny thing when I'm teaching at colleges, a lot of times what I'm actually teaching sales and marketing and entrepreneur programs or personal branding, and the architecture of it, for some reason it's not really taught a lot, but it's hugely important. I suspect this is going to evolve over time. The other thing is we're starting to see a greater application of technology and big data to improve this time value proposition to bring the efficiency part of things. In our tech company, it's called ShapeTech Solutions, in fact my son, Connor is back there, he's now the CEO. He graduated from Wake and we put him right on the shooting line with everybody. We're involved in two big aspects of direct selling. One is we're redoing how e-commerce pages work. We're bringing UX, UI in, new strategies, building more sales, and lead-based e-commerce versus informational portals which the industry has done, and then were involved on the back end with back offices. How do you build support systems that help distributors be more successful? We get a good read on this. It's interesting when I look at the traditional world toward direct selling, we're starting to see this coming in, but they're way behind where the rest of the world is. We're starting to see change and it's going to create massive differences. On the headwinds that things that are slowing things down, first and foremost is reputation. We talked about that and what we're doing to solve that is number one, we're changing the prioritization of the business focus. If you think about the model, everything starts with recruiting and sales. I got to get customers and I got to get a team. That's recruiting. It's the number one paid activity in this industry. The problem is that it isn't what creates success. Success is built of relationships. We were talking about this earlier, building critical mass with relationships, it's the engagement piece. We're starting to see how engagement is beginning to take a bigger hold on things. Who can tell me what engagement means? Can you give me an idea of what engagement is? Anybody? [inaudible] rather than just collecting people opinion [inaudible]. You have a deeper connection to people? Yes. I'm going to give you a behavioral formula and I'm going to share this with you because I can tell you this behavior formula changed my whole trajectory in business. When I figured this out is when I really got the relationship game. Engagement is the triumph of hope over experience. Forget about direct selling for a second and let's just take it in the context of something you might understand. How many of you have ever been in a personal relationship with somebody? Show hands. If you think about the context of that, why do you stay engaged in that relationship? Well, the first thing is experiences. If you're having good experiences, you tend to stay involved. A good experience has five components. It's positive, meaningful, it creates hope, it confirms hope, and it magnifies hope. Hope is nothing more than your belief system about the future. Not to get too technical, but the neuroscience of how our brains works is really simple. We focus on something and our brain says, what does it mean, and we give a conclusion to that. That becomes our belief system. If you were to talk about why are you engaged in Emory? Why are you in this class? You weren't born with the idea of, "Oh, my gosh, when I'm 20-some years old, I'm going to be at Emory and I'm going to be taking an MBA class." This all is programmed through experiences. If there are two variables to that, hope and experience, and both drive engagement, which one do you think is the most important? Focusing on hope or focusing on experiences? How many think hope? That's fascinating. Here's my question for all of you that think it's hope, which is probably 80 percent of the room, where does hope come from? From experiences. The mastery of business is not marketing hope, it's turning hope into reality. It's the experience game. Anybody that understands business will preach to you about the importance of the customer experience in the customer journey. To be really successful at business and direct selling, what you have to really get good at is the experience game. If you do it well, you'll create hope, but you also confirm it and magnify it. Ultimately, what you look to do, and this was a mastery of what I had on the behavioral side, we should turn hope into faith. The difference between hope and faith is hope can be defeated by an experience, faith that cannot. When you build people's identity to connect to things, all of a sudden you can have this massive successful organization that sticks around. Engagement is really important. The next thing that is going on is self-regulation. We have not had a self-regulation movement in direct selling for many years, now we do. I don't know if I can say this on film, but I will. For a lot of years, there are feeder groups to the regulatory bodies, for instance, the Federal Trade Commission. If a feeder group doesn't necessarily like you, they can find a problem and all fix. What a lot of industries do to get around that problem is they create their own self-regulation with a third party. That's what happened last year in direct selling, so we're seeing a big change in the reputation because we do have a self-regulatory movement. Of course, the academic initiative, as I mentioned, 217 universities were finding their input is invaluable in terms of research, their understanding of business. In my opinion, they are the most underutilized asset that we have in direct selling to change it. I look forward to playing a bigger role in that. Of course, the income narrative moving away from this, everybody's going to get rich to meaningful part-time income. The execution of taking priority of hope. The focus of the systematization. Let me explain that to you, and I'll ask it is a question. If you had to build the business model around direct selling, and you had to systemize the process, which group would you focus on, on the distributor side? Would it be your retailers, or would it be your leaders? Which one do you think you would build your systems around? Retailers. Why the retailers? Yes? They're the ones that interact with the customers. Okay, what else? Who's the lifeblood of the business? Micro-entrepreneurs. The data suggest that 80 percent of all people in direct selling have no willingness or ability to build a sales organization. If you don't systemize around these part-time people, what happens is you believe them. You get this churn, and you can't develop consistent leadership, and this is a huge change that's going on right now. People are now re-systemizing their business to make the part-timers more successful because then it'll hold more stability into the industry. Why do you think there's a compensation imbalance? If you think about pay on one hand and performance on the other, there's this massive imbalance that exists in the industry today that is being corrected. Why do you think that exists? Any idea? [inaudible] Yeah. The answer is because of how complaints are designed. If you go back to what's the philosophy behind how people are paid in this industry, it's market hope and get people to chase the marketing plan. If you look at the imbalance, what happens is more and more money over time shifts to the leaders, and the leaders aren't the ones driving performance, it's the micro-entrepreneurs. What you end up with is this massive imbalance that is trying to be corrected. To give you a for instance, I know $1 billion company, and they determined through their analytics that 98 percent of their commission was being paid to people that drove no performance at all. If you think about that in the content of running a business, this is something that you have to begin to correct. The time value proposition we talked about, the gig opportunities. Why do you think the gig opportunities are so popular these days? Anybody here who've done a gig, an Uber, or Lyft, or Amazon, or Etsy, or any of these? Yes. Why do you think they're so popular? Flexibility. Flexibility is a big part. Anybody else? They're easy, fun. I always look at it this way. If I were to say, what is similar to me to all of you? It's that I had the same desire in my career that you likely have in yours, because whether you're an entrepreneur or whether you work for somebody, the four things you tend to value as needs are certainty, comfort, freedom, and- Independence. I have recognized that freedom, for instance, is something that is growing in importance to people. Because it's growing in importance, what we're finding is they're going to these gig economies and direct selling because it gives them a sense of freedom. It gives them a sense of comfort in that they can be around other people. It's the element of entrepreneurism that is growing and it's working into the gig world. What's different about the gig economy is ultimately, it doesn't have a reputation challenge at this point, and it is a much better time value proposition because of things that exist in it. They're much better with technology. They use data better. They journey maps, so they're studying all these touch points. The business model tends to work better for the part-time people. I think I mentioned earlier, the latest that I saw was one out of every three people that have a job are working one of these side hustles. This has become really popular. Part of our challenge right now in the industry is these are the people that are getting our part-time people, our micro-entrepreneurs. We were the ultimate gig. The advantage we have over the gig is there's no leverage in the gig economy. You can't build a salesforce. As the super affiliates come about, this is beginning to change, but the gig opportunities are a big issue. We talked about e-commerce and the pricing situation and having to overcome that. The regulatory and legislators always been a problem. It's interesting, and it's not always on income and the opportunity side, but sometimes things like independent contractor rules. Direct selling is an exception under the IRS code that we are, by definition, independent contractors. That's a huge advantage from a federal perspective, but what we're seeing now are states coming in and saying, "Wait a minute. You're not an independent contractor under our rules. Therefore, we want to collect taxes and fees." It creates a huge challenge for the industry. We're starting to see regulatory and legislative, it's always been apart, but it's growing but in different directions. Then, ultimately, this generational synergy that I talked about, the older demographics, learning to work with the younger demographics. Yes? Sorry. To go back to what we were talking about before, the [inaudible] incentivize micro-entrepreneur, they're [inaudible]. Looking at an example of [inaudible] or Herbalife, how are those companies incentivizing the micro-entrepreneur without actually having to give them a ton more money? Is it the purpose of the class of the whole channel that they're delivering to the client, is it with the technology that you mentioned with Uber or how's Cutco getting the micro entrepreneurs to stay? Cutco is very much designed as a direct selling company. A lot of college kids marketing, has a strong retail, wholesale, so people can make good money doing that. The problem you have with the compensation of the micro-entrepreneurs is there's too much money going to the leadership. There's not enough money for the people that are retailing. How do people overcome this? One is there's a lot of changing [inaudible] design. People are going in and changing [inaudible] lands and re-allocating money. The other is they use incentives. More indirect things like trips and bonuses and incentives for recruiting or building a sales force, whatever it might be. It's a combination of things they use, but the problem is that there's still not enough of it. We're still putting a lot of money toward the leadership and not the micro-entrepreneurs. This is where the chart is. I was working with a company. I'm not going to say who it is, but they had a pretty big compensation problem. Two of the problems with their compensation model was their retailers made 12 percent and they were paid monthly. Today, it is pretty common for the retailers to make 25-40 percent and to be paid weekly or sometimes daily. The frequency of pay that the gig economy brought in worked its way into direct selling. I can tell you if they don't fix that, there's no way they'll solve this problem because as more and more companies come out and make more money for these retailers, they're just going to move to a different business model, but they use all kind of other things. I've seen companies like Rodan and Fields is a good example. Their ex-CEO is a good friend of mine, Lori Bush. When I was talking to Lori, they were very customer-centric. What they used to do to provide attention on the customers is they would fly in customers to their conferences, people that weren't distributors. They want them to experience the culture and they wanted their team and their culture to see the importance of customers and how their products actually changed people's lives because at the end of the day, to me all marketing is a transformation game and they played that game really well. There's all kinds of things that are being done, but I would say the biggest thing that's being done are changing com plans. It's just a restructure and how they're developed. It's very challenging for some of the legacy companies that have large salesforces and global salesforces to make this change, but we're seeing more and more of them. What I would say are very bold changes. A company for instance, Mannatech, I don't know if you've ever heard of Mannatech. They're a public company doing about 200 million a year in sales. They are a legacy company and they went in and completely blew up their compensation plan and started over. As you can imagine, the people that were being paid on that were a little concerned about how that was going to affect them. Of course, there's always winners and losers, but at the end of the day, you have to go back to the fundamentals of strengthening the part-time people to strengthen the whole business model. That's a great question. As I look at things in the industry today, I think what's changing is how culture works. If you go back to the original birth of direct selling, it was a preacher that sold bibles that started this back in the 1800s. Believe it or not, that company is still in business today and one of the bigger network part of direct selling companies. The birth of network marketing was originally a quota system. It was built by Nutrilite in 1945. The idea was if you were successful as a distributor, you could get somebody to sell your products, but until they could create a customer base of 250 customers, you weren't allowed to become a distributor. It was very much about building customer basis. In the 1970s it all changed and it changed, in my opinion, primarily because of Herbalife. Back then, Herbalife went on TV and they were running infomercials. Those infomercials were bringing successful people on stage and showing checks and, "Look at our $100,000 check." They built this huge opportunity focus that changed the entire industry and it's been that way for 50 years. Now, it's beginning to evolve and what you're finding, in my opinion, is the birth of really the cultural centric era. Let me talk a little bit about that just to give you an idea of how much that makes a difference. One of the companies that I worked with, they were stuck for six years, and when I say stuck, their sales weren't moving and their customer base wasn't growing. I was brought in to help solve that problem. What I recognized was they were having this internal debate between, "Well, should we focus on customer opportunity?" Instead of saying look at culture is the differentiator. That is what makes people stay, that is what you have to get good at. I built this model for them called a mission-driven model. It was originally mission-driven system. They called it the mission-driven model and it was a cultural model. In four years, their sales went from about 300 million up to 800 million simply because I built a model that strengthened all aspects of the culture. Their ARO base, the reorders of their customers went from 350,000 to 1.2 million customers and everything changed. What I understand being on the corporate side and on the field side is that culture is ultimately the differentiator in all things. Even those of you that might work for somebody else, you're going to find how important culture is to your future. Like today, Connor and I had lunch with a guy that I know I met on a plane of all things who worked for a large consulting company, I don't want to say which one, but smart guy. Had his math and engineering degree from Georgia Tech and an MBA from Harvard, super sharp and completely got out of the consulting world. I was curious, why would you get out of the consulting world? He's like, "I couldn't deal with the politics of it anymore". He started to realize the culture was not what he expected it to be. It wasn't fair, there wasn't upward mobility. This is not an uncommon story. What a lot of entrepreneurs have that is really awesome is the ability to build your own cultures and to have things the way you want them. Now you're seeing what culture looks like a business really evolving. I did a study on Google and I was shocked at the extent of things they did for people and their culture, the flexibility they gave, the benefits they provided where my first job was with Touche Ross in accounting. It was so traditional and so political and a horrible five years of my life other than a learning experience. We're seeing culture change. How many of you by interest want to be entrepreneurs? A number of you. Good. I will tell you if you want to be an entrepreneur and you want to scale and build something big, you have to learn how to build culture and how to build relationships. That is the game that makes it work. When I'm working with a lot of entrepreneurs, even direct selling entrepreneurs, where I tend to see a struggle is proprietary thinking and people thinking they have to be the answer to everything. If there's one lesson I learned, anyway, I talked about this earlier, when I came out of school, I just wanted to be hugely successful. I really wasn't sure the way but I followed the mold and the mold was go get more school. I was a decent student but didn't really enjoy school, I wanted to do something different. Then I had an epiphany and that epiphany was business is about people, maybe I'd better study behavior and see how the behavioral game works. That change in literally 30 years of my life being invested in that is, in my opinion, the biggest reason I'm successful today. The reason I can scale is because I know how people work and had to build processes around that. For you entrepreneurs, what I would encourage, I know Sandy is an expert on all things relationships, those are important things that are not taught in school. I was telling her a kid had come to me, they had a PhD in finance from FSU. He came to me and he wanted to be successful, he's getting into the hedge fund world and the first question I asked him, "Do you believe business is about people? yeah, people are important". Okay. Great. Tell me how relationships are built? He looked at me like I was speaking a foreign language to him. I shared with him how people work and why they do things and the behavioral component of relationship building and the interesting thing was when he went into the hedge fund, it didn't take him very long to move very high up, quicker trajectory than anywhere else. If he was here, he would tell you the reason was because somebody taught me how to build relationships and that this was ultimately important to the success of anything you do in life. Does anybody have any questions about direct selling or anything else to do with entrepreneurism that I'm happy to answer? I must say that's a space I live in a lot. Yes. Your headline is how do you commerce on there? All of the [inaudible] products and every written word in that retail stores would've been crushed by the Internet. I'm surprised that's not the biggest headwind and to this sort of stuff. Even this slide, an entire business model is something like pre-Internet, like they're from the '40s and '70s. I'm just surprised that that to you it's not the biggest headwind. It is a huge headwind, not only from a pricing perspective but design. If you were to go into most network marketing or direct selling e-commerce pages, what they look like is massive information dumps. They're not designed for lead generation or to sell. Part of the evolution of that is getting it more designed for sales when it's never been that way. You've got the pricing issue. You've got the Amazonification effect where everybody expects shipping, like we have all these challenges on the e-commerce front. It is a big issue, but we're also seeing an evolution in it. Starting to see more UX more UI. You're starting to see traditional retail strategies like, flash sales is a good example. There's one company I knew they were doing eight-hour flash sale and they would get over 50,000 orders on their e-commerce page from a flash sale. There are things that are being done that are changing that, but traditionally, they've been just large, ineffective information portals that are not good for end consumers to buy from, and that's where the evolution is. Yes. I do remember like 2010, I do remember we were starting to see people trying to sell stuff on Facebook, and most of the products were sketchy diet, juice, drinks. I love that word sketchy. There's no cool [inaudible]. Yeah, get me some two by the way. I think this is part of the reputation. There's less reputable claims of products that are making claims that came back up. But I guess my question for you will be like we have seen incredibly successful retail product companies, I'm thinking like Warby Parker their glasses. Can you think of other products like that? I can imagine maybe it's some distribution like this working or something like that. Because people needs to try their things on if you don't have a store. Can you think of other product that are not like the diet stuff, cosmetics? Yeah. If you were to go to like Amway would be a good example. If you were to go look at their catalog, you'll see all traditional brands in there. What these brands recognize is the distribution has channel because they have a sales force. They go in and they sell to the brand and the brand markets to the field. We see that in Amway there's another company called Market America. They built a platform called Shop.com, which is really a malls without wall, and it is just what you're talking about. We find that retailers, like we're dealing with one right now, that's in the fashion space that's looking to go into an affiliate model to a network marketing lot they're very successful at e-commerce, but they think having a larger sales face will just speed up the success. There's more and more people going into that. But ultimately in e-commerce to me, if I was building a network marketing direct selling company, if I couldn't sell an e-commerce, I wouldn't be selling a network marketing because what I would have is a business opportunity driving everything, instead of true end consumer behavior driving things. But yeah you're seeing more and more of that. Anybody else? Yes. When you're engaging customers in these massive changes, we're suspected as well as your competition with them. Are they perceiving it as business transformation or digital transformation? Digital can be a part of it. You asked about social, I'll tell you where social media has changed this. Before social media, everything is about who you know. What social media did is change the amount of people that are connected to your brand. It allowed you to have more exposure. I talked about influence being a form of capital social media is a place to create a lot of influence. That's what social media changed. If we look at things today, it's the social influencers that drive everything. Everybody is on social media, but not everybody is successful. The majority of people are not. I always tell people, why is that? It's because ultimately, if you don't know how to communicate, it really doesn't matter which platform you're on. It's not going to be successful. When I teach personal branding classes is a good example. I'll ask somebody, do you believe in the value of communication? Of course. So tell me what perfect communication is? It's an interesting question because most people have never thought about it. But if you think about it, perfect communication is when you communicate and people do and think what you want them to do and think. When your perceptions are met by your intentions, you have perfect communication. People that are effective in social media are effective communicators, they're really good at the content game, they're really good at getting people to think what they want. Sometimes they don't do it the right way, like your example on the nutritional products, perfect example is weight loss. Oh my gosh, Beachbody got busted for putting before and after pictures, and the after pictures weren't even people in their products. You can't do that stuff. But, ultimately, I did a big research project for a company about weight loss and found out about 95 percent of all weight loss fails as business model. But yet so many people are in that space and more and more all the time but it's becoming harder to differentiate yourself. So yes. Do you think you can give a couple of examples of what you had in the model for cultural centric era; something at least for us to try in our teams? You mean how culture was built? Not how, if you had to give an advise to [inaudible] in those settings what exactly that means for them in the culture. If I'm looking at culture and relationships, I'm big on mapping, so I'm going to map touchpoints, and I'm going to figure out where the failure is in the touch points and where I can create engagement, create the results I want, build strategies, measure things. I'm seeing more and more companies, for instance, go into attribution modeling around journey mapping; and this was never done before. When I do consulting, I think about it as three pieces: Analysis, strategy, and execution. A lot of the analysis on the relationship part is where's this thing fairly and it's that way with everyone. I can look at any business and determine how long somebody stays and why they leave and I can begin to make changes if I map things out. So mapping would be number one. I just had that exercise with a company that I'm working with to shift their culture, and when I mention journey mapping, they're like, "I don't know what you're talking about, we've never heard about this." In traditional business, it's very common to see this, everything is mapped out and these touchpoint analysis are really important. The other thing that I pay a lot of attention to on the relationship game are the expectations created. A lot of times on the front end of the sales process, we can have a gift of creating unrealistic expectations. If you create unrealistic expectations, clearly they're not going to be met and people are likely going to leave. I look at all these different things that are important to relationships. But ultimately, when it comes to relationships, there just two fundamental things that I pay attention to. I'll share those with you and share your story where I got them. Years ago I had a fight with one of my business partners, and I thought our relationship was going to end. We had a massive gap and I don't remember what he was wrong about but it doesn't matter to this example. We had a mutual friend in Tony Robbins and Tony refereed. He said, "All gaps and relationships are created by one of two questions." The first was, does this is person have my best interests at heart, and the second was, does this person bring value to the table? I spent 14 months of my life trying to figure out what Tony Robbins things mean. Does this person bring value to the table is really simple. It's about people's needs. At the end of the day, I don't care who you're involved with or what culture, if your needs aren't being met in a way that you value them, then what happens is people look for a different place to have them met. So that needs structure is, what's the need, what's the prioritization, how is it measured and where is it met. That was the easy part. The other part was, does this person have my best interests at heart? This became an analysis of character, and I wasn't really sure what it meant as strange as that sounds. Everywhere I would go, it's like what does character mean, and people would be like, "Oh, it's doing the right thing when nobody's watching, it's being honest" and heard all these components of character and then I finally realized character is just a measurement of self interest. If I look at people with good character, what I see are people that are service based, not self-service based. I use those two qualities to systemize everything around relationships, strengthen connection, and the relationship process became really easy. If you just use sales as an example, rule number 1 that I taught with sales is connection before selling and connection was just three words: Trust, care, help. If I get somebody to trust me, know that I care about them, and that I have some way of helping them, selling becomes pretty easy. But if you don't have that, and you sell a lot of times what people tend to see as an agenda; and that agenda starts to develop your character and it begins to erode the possibility of a sale working well. We just put these simple principles into models and that was how we built culture. If you think about it, all these things don't apply to Direct Selling, they apply to everything in life. This model of relationships is certainly not just a Direct Selling model. I hope that answers your question, but I'm always looking at where the breakdown is; and there tends to be a lot of them. So thank you a lot and I wish you guys the best and hope I get a chance to come talk to you another time. Thank you. Thank you [inaudible]. Thanks [inaudible]
