The Four Generations of Network Marketing

Generation 1

1960 – 1980

CORE VALUES

The first generation was built on the core values that launched the the largest companies in the industry. These core values are the basis and foundation for the Millionaire Training Series.

The cornerstone of this 1st Generation was self-responsibility.

Generation 1 Transcript

Taylor:

Welcome, WealthBuilders!

Larry:

How are you guys? Welcome today. Glad to be here to talk with you.

Taylor:

You’ve got the T and the-

Larry:

The L. You notice how she put the T before the L instead of the LT. The T and now it’s the L. You get it. You get it.

Taylor:

Welcome to the LT WealthBuilding Academy. We welcome you guys coming in here today. We’ve got a really incredible subject matter that we want to share with you guys because this is so foundational to what your journey’s going to involve as you become, in the Wealth Building Academy, as you become a wealth builder and as you grow you, as you grow your team, and as you grow your check.

Larry:

Grow your check. Guys, this is something kind of special to me, because we’re going to be talking today about the four generations of network marketing. Taylor just loves this subject matter. We don’t talk about it a lot, but for me, I kind of took it for granted. I don’t want to say I took it for granted, but I lived it, so it’s like an old story that you go through back from high school and college and things. You know what I mean? It’s great to share it and everything, but it has an impact on a lot of people. We’ve shared this a few times. Taylor says, “We’ve got to share this with you guys as part of the Academy. This is going to be important for you.”

Taylor:

It’s very important from the perspective of, as I don’t know where you are in your journey, but I do know this. I do know, in order for you to move forward, you have to know your history. Knowing your history plays a big role as to how you move forward because it’s foundational in the process of network marketing. Personally, I don’t know of a human being in the network marketing industry current or this profession today that is active and has the knowledge and the wisdom and the experience that Larry has. I don’t say that because he’s obviously my husband.

 

I say that as his being my mentor from starting as a stay-at-home mom of three and building into a six-figure income as a single mom of three and understanding how this profession, where it started, how it was built, the foundation and the principles that you started with and parlaying those things into what we know to be true today. I’m real excited for you, because you’re probably thinking, “Why is this important to me?” It’s important to you because it’s understanding the philosophical approach and understanding the tactics that this industry was founded upon, that it’s carried over. Whenever you understand this, it’s like the skills of carrying forward into your business. Whether that’s with family, whether that’s with your finances, whether that’s with building your business, these concepts are timeless. 

 

I wanted to sit down here today and talk about these things because we talk about four generations. Most people, their experience, most people that are in the industry today or in what we call the profession, started in the ’90s. They don’t understand what it was like whenever, before it was even an industry. You were there, so let’s talk about generation one. 

Larry:

We’ve got to back just a little bit here, because I don’t think anybody thought that we would have an industry and a profession called network marketing or multi-level. It became network marketing. It became multi-level. In the beginning, it was called pyramiding. Nobody thought, I say nobody. That’s just too broad of a statement, but very few people ever could envision what this has become, the network marketing industry. We take for granted so many things, but you’ve got to take a look at Mary Kay cosmetics, what a role that they played. They were back there then. You’ve got to look at Shaklee. You don’t hear a lot about Shaklee, but Doc Shaklee brought that thing forward. That had a very powerful impact, all the way through the ’80s. You cannot look at this thing without looking at Amway and the part that Amway has played. No matter what you may think, $12 billion last year? They’ve just consistently grown and grown and grown. Go ahead. 

Taylor:

This is really interesting that you brought up Amway because most people, with Amway, there’s some preconceived ideas that go with this, but you were listening to the radio, and you shared this story with me. I want to tell this to the wealth builders out here. Larry listens to Sirius radio, and he was listening to Garth Brooks. This is very- 

Larry:

I don’t know if I can tell this story and not be emotional about it. I will do it. I will do it. Anyway, I was listening to the Garth channel. I like listening. I like that kind of music that Garth Brooks plays, but I love it because he talks about the artists and he talks about the song and the timing and all that stuff. They asked a question of Garth Brooks. They said, “Listen, who would you most want to go to lunch with?” I thought, “That’s an interesting question.” He immediately said, “If I’m going to lunch with anybody, I want it to be my mom and dad.” He said, “We’ve got to break it down.” He said, “Family would be my mom and dad, and people, it would be my mom and dad. I love going any time with my mom and dad.” He said, “If it’s spiritual, I’d love to have lunch with Jesus Christ. Think about that.” 

 

I’m thinking about those answers. It was immediate to me. I’m just about ready to go through a car wash. I’m thinking, “In business, who would I most want to have lunch with?” It was instant, and I had never thought about this in my life. It was instant, and it was Rich DeVos of Amway. Why? He was the Larry Thompson of Herbalife, Rich DeVos was to Amway. He’s got more experience. He’s got more success. He’s got more wisdom. He’s got more money. He’s been there longer. It was instantly to me, “Man, to be with Rich DeVos.” That’s how I see this industry. There are so many people out there today. Sure, they’ve made six figures, seven figures, ten, fifteen, twenty, thirty, forty million. There’s very few people that have walked down this path. As Taylor said, I’m one of the last ones standing out there to walk down there in this time period. I don’t know if that’s what you were looking for. 

Taylor:

Yes, because it paints a picture. It paints a picture from the perspective of whenever you started as the long-haired hippie construction worker. The long-haired hippie construction worker with no self-confidence, no education, didn’t graduate from high school. 

Larry:

No self-esteem. 

Taylor:

No self-esteem. 

Larry:

I could tell you the color of your shoes, but not your eyes. 

Taylor:

Started 19, 20 years old. That right there, you started before it was even considered an industry. I love whenever you said the pyramiders are here, and the drug dealers, right? 

Larry:

What Taylor is saying here is very interesting because when I joined, you had drug dealers were here, and pyramiders. Who was above the drug dealers? The pyramiders or the drug dealers? What’s interesting about this is the day that I joined a company called Bestline Products, the meeting that I came to, the actual meeting that I came to, two significant things happened. Number one, Bobby DePew was giving that meeting that night. I’ve got a picture of him over here on my wall. We became incredibly close friends, all the way through, on his death bed. Bobby was an ex-school teacher. He was giving the meeting. He had a philosophical approach that was just unbelievable that I identified with, but there was somebody else in that meeting that night at the Hyatt Hotel on First Street and 101. For those of you that are from that area, there’s kind of an intersection. First Street and 101, there was a Hyatt Hotel. I don’t know what it is now. 

 

I came there and in Governor’s, we had to walk through the whole lobby and walk around the pool. There was a Governor’s House A and B. I never will forget it. I’d never been to any environment like that, but Jim Rohn was in the audience as a guest, just like me. Jim Rohn joined the same company the same night as I did. That didn’t have, you’ve got to realize, I had no knowledge of any of that, but three weeks later, Jim Rohn had a training class for his distributors, and I came to it. It changed, you know what I’m talking, changed my life. 

Taylor:

Let’s talk about just a little bit about this part right here, because you talk about Bobby DePew. We know this, and we hear this so much in this profession today, coaching, mentoring. Sometimes it’s very loosely talked about. Whenever we talk about Bobby DePew and what that means to you is that he was the original tactician of network marketing, the original strategist, and having an understanding of people and having an understanding of a psychological sales approach with people. He became your mentor at the age of 19 with no experience. 

Larry:

I was 23, 23. 

Taylor:

23, still young, no experience, but as your mentor, as your coach, you learned a briefcase of skills. You learned some skills. More importantly, not did you just learn from him, but he saw something in you that you didn’t see in yourself. I think that part is an understanding of who Bobby DePew is to you and how that parlays into the rest of your history or your future. 

Larry:

It’s very interesting because Bobby had the ability to see inside of you. He could see things in you that you never could see. He could encourage you. I understand it now. I never understood it back then. I understand it now because I can see it in people. I can see it in them, and it’s easy for me to encourage. I know where they are. I know their struggles. I know what they can become and I know what they can do. Bobby’s thing was about learning a few basic fundamentals. There’s nothing like fundamentals. Fundamentals is what it’s all about. That’s what the Academy is all about, fundamentals. I want to take you to a story of the Chicago Cubs. The Chicago Cubs that just won the World Series? I didn’t keep up with it, but I know the story. There’s that young coach that took the Cubs to the World Series and they haven’t been there in 100 years. Guess what happened? The year before, he took the Boston team to the World Series and they hadn’t been there in 54 years. 

 

His deal was, how did that young coach take this team, the Boston team first and then get them to the World Series and then take the Chicago Cubs to the World Series after 100 years? His deal was, it’s the unrelenting way that you look at the fundamentals of the game. In baseball, it’s simple fundamentals. Simple. Run, catch, throw, hit. Now you think, what about social media? Shouldn’t we get this on film? Of course, you could. What about internet? It’s run. It’s catch. It’s hit. It’s throw, but it’s the unrelenting belief in those fundamentals that you will become great. That’s what Bobby taught me. 

 

I will go back to the ’60s now. Let’s go back to the ’60s and talk about generation number one. 

Taylor:

Generation number, and you might, if you’re taking notes here, which I highly encourage you to do, is what we call generating core values. Write that down. It’s core values. It’s generating core values, which could be translated into fundamentals. 

Larry:

Could be right at the fundamentals. Let me tell you, this is very interesting. This is for you guys that are wealth builders. I hope that you’re going to get a lot out of this. This means a lot to us. We don’t have scripts here. We’re here to share with you as a wealth builder part of our wealth building world and our wealth building Academy. We want to communicate these things to you because these things are the difference that it makes in your business. Generation before generation, let me share a little bit about how that came about because I have already divided up the network marketing world into four segments as I was calling it. I’m watching TBN, the Christian television show one day. Jensen Franklin is on there. For those of you that know Jentezen, he’s out of Georgia, I believe. 

Taylor:

Yes. 

Larry:

I love Jentezen Franklin because of his passion. I love passion. I love the way he pitches. I love his ideas. He was talking about the four generations of a spiritual awakening. I said, “That’s interesting.” I stopped it and went and got my notebook. I started taking notes on it. He was talking about a spiritual awakening, which spiritual awakening means things that change the world, change the Christian world, the things that change the world. He says, “The first generation here of any spiritual, there’s four generations,” is what he said. The first one is core values. You’ve got to identify the core values of what that awakening is all about. When those fundamentals, those core values are identified, he says, “Then you don’t get much growth out of that. Then you go into generation number two.” 

Taylor:

I still want to back up because we’re still in generation one. There are some very significant things that happened here that are fundamental in laying the groundwork for it parlaying into generation two. That’s this, so you’ve got Bobby DePew. You’ve got you. You’ve got this 23-year-old, didn’t know much of anything. 

Larry:

Nothing. 

Taylor:

Really, as a coach and a mentor giving you some core values, some basic fundamentals. You guys have to understand, whenever you were starting, you’ve got the tactician, which is Bobby DePew. You’ve got Jim Rohn. If you guys don’t know who Jim Rohn is, please do yourself a favor and go do some research here because he really laid the foundational work, and anybody- 

Larry:

If you don’t know Jim Rohn, you know Tony Robbins. Tony Robbins came out of Jim Rohn at 19 years of age. I met him at 19 at Jim’s office. 

Taylor:

You couldn’t be watching this today and not know Tony Robbins, so if you know Tony Robbins, then you ultimately should know Jim Rohn because that’s where that was born from. It was Bobby with the tactician. You have Jim with the philosophical approach. You’ve got you. Now you’re working hand-in-hand with Jim Rohn, doing all this stage work and traveling and doing meetings together. You have to understand, this part is so important from me, from my perspective. This was at a time in the ’60s whenever there was no internet. There was no cell phones. There was no MasterCard, Visa. There was no UPS or FedEx. Long-distance? That was expensive. You have no understanding of, the phones were hard-wired to the wall! You have to understand that whenever you’re teaching, whenever you’re learning something in this environment, in this way, the whole idea was you to be become so self-responsible- 

Larry:

Self-responsible. 

Taylor:

And so self-functioning that the concept was that they could give you a brochure- 

Larry:

Wow. 

Taylor:

And fly you across, drop you off in a parachute, and you had enough skills that you could start your business wherever you landed. 

Larry:

Yeah. 

Taylor:

By yourself. This part, people don’t understand this today. I want to really lay the foundation on this part because people need to understand, in that day and time, everybody was self-responsible. Everybody was self-determined and were taught those skills of not depending on your up line or your down line. 

Larry:

As Taylor’s sharing the story here, when you think about it going back there, how do you go outside of your local area to build the business? When you think about no internet, no cell phones, no Google. You know what I mean? No Instagram, none of this stuff. That’s one thing, but now think about no MasterCard, Visa. Everything was cash. Think about the difficulties of that. Think about not being able to ship products. 

Taylor:

Think about long-distance sponsoring. 

Larry:

Sponsoring, because I’m telling you, back then, when someone called long-distance, the house stopped. The whole house, “Long-distance! Long-distance!” Everybody would stop and look at the phone. You’d just be looking at the watch every second. What’s the significance of that? It means that fundamentals had to be there. What Taylor just shared about putting a parachute on your back and putting a brochure and going across the country because Bobby started a national expansion program, got me away from my comfort zone of my own little city that I lived in, Livermore, California, and got me out into Texas, conceptually pushing out of the airplane over El Paso, Texas, not knowing anybody and having to start from scratch with those fundamentals. The briefcase of skills that he taught was self-responsibility, self-determination, self-motivation so that you become self-functioning.

 

That’s what the LT Academy is all about. No matter who you are, no matter where you are in your skill level, those things are the things that we teach here. That’s what you get out of here. I’m telling you, every one of you, no matter where you are in your income and wherever you are in your journey, you are going to get tremendous value in your team out of this. Generation one was a tough one. 

Taylor:

You have all those dynamics going on. It’s not even considered an industry. It’s not even considered a legal profession in this time. 

Larry:

Legal profession. 

Taylor:

There was a lot of regulatory things that were happening. 

Larry:

Going on constantly. 

Taylor:

Then you have to understand this core value concept from the perspective of the marketing plan. Most of you are out there, the marketing plans that you’ve been exposed to were not even close to what this looked like. How this started was, everything was based on retail/wholesale. That’s a term that today’s market- 

Larry:

They don’t know today. 

Taylor:

Really doesn’t even know and truly understand, but the whole reality of it was, whenever you buy something at a wholesale price and you sell it at a retail and you made the difference. 

Larry:

Yep. 

Taylor:

Whenever we talk about generational money, generational money? You need to completely understand. 1%. 

Larry:

One generation. 

Taylor:

Of one generation. Let’s look at that, and talk about that. 

Larry:

First of all, I’ve got to cover a few more things on generation number one because we weren’t, as Taylor was saying here, they didn’t look at us as a legal entity, but people believed in, if you believed in your products, then you could get other people to buy those products. We got to survive off of selling bottles of products and cases of products and making the retail/wholesale difference. Generation one was a struggle for everybody. That generation, then, there were very few people that got to transcend into the second generation. As Jentezen Franklin, I want to go on! 

Taylor:

I know you want to go on, but there are some very important parts here. I want to make sure that this is completely solidified. Whenever we’re talking about retail/wholesale and we’re talking about one percent of one generation, that means that your income depended on you- 

Larry:

100% 

Taylor:

And what you did. Not what your team did. 

Larry:

You got it, good. 

Taylor:

Not what your down line did. It all depended on how many people you were going to talk to about your product, how many people you were going to talk to about your business. Your income depended on what you did. That is something that is so important in today’s world and today’s market. Then something very, very significant happened because in this process of the people that survived this timeframe, these people are strong. You have to understand. These people could do business without Visa and MasterCard, without long-distance, without UPS or FedEx. They were building their teams. They were building their business. They were building their customer base all around core values. 

Larry:

Correct. 

Taylor:

Generation one, generating core values. Something very significant happened at the end of this generation that Amway- 

Larry:

This is cool. 

Taylor:

Played a major role. This is where everybody needs to have a complete admiration for Rich and Jay, for what they did, because if it wasn’t for them, there probably wouldn’t be an industry as we know it today. 

Larry:

There would not be one. Not probably, there would not be one. Generation one is really basically 1960 to 1980. Remember, I said I divided it up into four segments. That was the first segment for me. Jentezen Franklin said, “You’ve got core values.” He says, “You don’t get your growth out of generation one. You get your growth out of a spiritual awakening in the next generation. That’s where you generate growth.” 1980 is when generation two started in network marketing and multi-level. 1980, basically, to 1990 is generation two. I’m going to talk about that. This is important. What Taylor’s referring to is 1979. Amway fought for this industry, fought vigorously for this industry. They believed we were viable. They believed that the rules and regulations that were coming down were wrong. In 1979, they signed off. They’d been fighting all kinds of legal battles throughout the ’70s. 

 

They signed off on what’s called the Consent Decree, is what I believe is what it was. It signed off that basically the government, for the first time, recognized multi-level. To my knowledge, the first time MLM was used was in that consent decree where it said, “Multi-level marketing,” which it was okay to do. It basically said, “Okay, you guys, you pyramiders, if you don’t do this, then we won’t do that.” The rules were established about what a legitimate multi-level company should look like. At that point, it was generally accepted that you could pay on three generations. Nobody had really tried that. There had been a couple people short-lived, tried some stuff in the ’70s. They got shut down. It was generally accepted now that there was three generations that you could pay on. 

 

Guess what happened, else, in 1979? America opened up trade with the Republic of China, so there’s new ingredients coming into America. “Herbs.” Here comes Herbalife. We’re using ingredients that no one had ever heard of before, herbs. We now had a definition of what multi-level should look like, so I wrote a plan for Herbalife with a three-generational payout heavily on retail and wholesale with a three-generational payout. We brought those herbal products to the marketplace. Generation started in 1980 to 1990. All the growth that you can point to today in the industry came as a result of the Amway signoff and the Herbalife startup. 

Taylor:

You’re still missing a piece for me. 

Larry:

Go ahead. 

Taylor:

Whenever, because of what you personally experienced and what you personally went through and the personal growth that you had in generation one. 

Larry:

Right. 

Taylor:

Not just what you did in your business, because what you did personally, but I want to point out the fact that you had the rug pulled out from you many, many times. 

Larry:

Yes. 

Taylor:

So many times, we run across people. We run across distributors across the board. They take it personal if they have someone in their team quits them. 

Larry:

Oh, my goodness. 

Taylor:

We have seen this a lot more where companies have had the rugs, even recently. You guys know. The rugs have been pulled out by a lot of companies, for a lot of companies, and have affected a lot of people and probably pushed a lot of people completely out of this industry with a really sour taste in their mouth. What I want to commend you for is the fact of your longevity in that because in any time during that process where you had made it to the number one distributor or Vice-President of the companies, in between, in this first generation. The companies closed the doors, locked the doors. You’ve showed up. They’re gone, nowhere to be found. To have the strength and the courage to go start again, to have the strength and courage to take those skills that Bobby gave you as your coach and mentor, the strategy and the tactics, and taking the things that you gleaned from Jim Rohn of working with him through all those years with the stage work and learning from him what I call the psychological, the positive mental attitude approach. 

 

Taking those skills and continuing to gather those and grow you. This is very important, because if you want to be successful in this business, in this profession, you have to understand that you have to grow you. There’s going to be stumbling blocks. There’s going to be speed bumps. There’s going to be things and obstacles that come your way. I’m going to tell you here, the bigger the problem that you solve, the bigger your check. This is very commendable for you for sticking with it and for taking and gathering all of these things as you’ve grown, as you’ve pressed in and as you continue to move forward, that it came to this point in time in 1980, whenever the worlds of network marketing are now viable, are now legal. The worlds of the trade with the Republic of China, the worlds of you coming together and having a relationship with Mark Hughes and coming together and building this giant. 

Larry:

Very interesting, very interesting what you’re talking about. Let me recap here. Let me do this without bragging, but it was a part of the story. I became the youngest area coordinator in that first company, Bestline. I became the youngest regional director. I became the youngest vice-president. One day, the doors are shut and it’s over, gone. You’ve got to realize, I went full-time in this business the first 30 days. I’ve been making a living in this industry ever since for 50 years now! When that rug was pulled out from underneath me, it wasn’t like you could go, “Who’s doing anything today?” There weren’t that many companies. The second company that I got started with became the number one distributor. I wasn’t an area coordinator, but it a concept of regional director and the vice-president of the company. That went south after about two years. Then, I’m sitting. I’m in San Diego at the airport, waiting for my baggage. I get a tap on my shoulder. 

 

There’s a friend of mine. He was the up line of Mike Fuller, who got me started in network marketing back in the ’60s. He had just started a company called Golden Youth Marketing. His name was Larry Hoff. He said, “Come on down to this meeting.” You’ve got to realize. My company was just shut down. I’m thinking about going back and getting a construction company. I’ve had it with all of this stuff. I came to his meeting that night. Guess what happened that night? Interesting, fascinating. In that room that night as a guest, I did join, but there was somebody else in that room that joined as a guest. It was Mark Hughes. The company, he had just, with Slendernow, Seyforth Laboratories had just shut down. He came there and he joined that night. Then Mark and I were working together as competitive lines. I became number one. Then he became number one. Then I became the vice-president of the company. 

 

Then I started working with Mark. We formed a very unique relationship. In less than two years, that rug was pulled out from underneath us. Now we find ourselves at the end of generation one. Amway’s got the rules. Now Mark has the idea to start Herbalife. I’m not real interested. I’m now back on the page. I’m going back to construction work. That’s what I’m going to do.