The Four Generations of Network Marketing

Generation 3

1990 – 2010

SPECULATION

The third generation started to swing away from the core values and fundamentals known to work as speculation on compensation plans and other factors start affecting the  marketplace.

Generation 3 Transcript

Larry:

Now we find ourselves in a 1990 to 2010 and generation three, which is speculation. Remember, they have a difference. They have the skill level, but they have a different set of … and they start speculating on compensation plans. They start speculating on philosophical approaches, and it starts to change the industry, and it swings away from the basic fundamentals that we started with. 

Taylor:

And the speculation … I mean, I actually started in 1993, so I started in this arena, and so I can speak to this very clearly, because I can look back and I can reflect on what happened for me. Now for me, I was fortunate enough for you to be my mentor whenever I did start, so I understand the concept of core values, and for me it was very important, because as a stay at home mom, you know, somebody that wanted mom care versus daycare, somebody that was just looking to make an extra $800.00 a month. That was enough for me to have, to be at home with my baby and still be able to contribute to the family. And you know there’s a lot of people still out here today that just are looking for that five hundred to a thousand dollars a month can be very life changing. 

 

And so it was during this time that the pendulum starts swinging, and I didn’t realize it because I was in my little cocoon of being sheltered with these core values system. I understood the concept of retail/wholesale. I understood the, being self-responsible and self-motivated. I grew up with these kind of philosophical thinking, and having an understanding that I was in business for myself, and that if it was to be, it had to be up to me. 

Larry:

Yeah. 

Taylor:

And so it wasn’t about me blaming my up line, my down line, my company. I knew that my company was only responsible for getting me my products- 

Larry:

And your check. 

Taylor:

… on time, and my check. Everything else was up to me, and I knew that early on. But I will tell you that I was in this arena that things really started to change drastically, because it was during this time that the internet started. 

Larry:

Yes. 

Taylor:

It was during this time that we started having email. It was during this time that … so all of this technology, things were starting to evolve, and having an understanding of speculation, people around me in my team, we started to see, people like, “Okay, how can we do this faster, quicker, better? How can we recruit faster? How can we make money faster? How can we grow our teams faster?” 

 

And so as a result of that, they started getting outside of this core values, they started getting outside of the real way to do business, and really got people sideways and sidetracked. 

Larry:

Let me go down this path for a little bit. In the ’80s, technology started, okay? You know what it was? Faxes. Videos. We started social media in Herbalife. We had that flyer campaign. We were the first ones with videos. We were the first ones with satellite. We went on USA Today every Sunday night. Then we had the fax machines. What a big deal with that. Then we had voice mailboxes. All of this was the social media of that time. And now all of those things advanced. 

 

Now we get into generation three here, 1990 forward, and what Taylor’s referring to is the way the industry started, because we had ways of contacting people now that we didn’t used to have. And we had a way to sponsor people faster, quicker, better, that we didn’t have before, but now what do you do with them? And so people started to speculate on compensation plans. 

 

Now what I’m going to share with you, I’m not trying to step on anybody’s toes, because I don’t think there’s necessarily anything wrong with a buy-in area. I don’t there’s anything wrong with a unilevel plan. I don’t think there’s anything wrong with those, but it carries with it another set of problems. For example, if you go into a unilevel plan where everybody says, “Okay, all you have to do is get on auto-ship, and then all you gotta do is get people on auto-ship, and then we’ll pay you these five or six generations, and everyone’s trying to cock up seven and eight generation.” Why? Because there’s no volume there. 

 

If your minimum to get your check is a hundred dollars and there’s no retail/wholesale, guess what happens. Your minimums become your maximums. So it’s hard to get the volume, but yes you can compensate for that. I’m not saying there’s anything wrong with that. I’m saying you gotta really now focus in on the fundamentals if you want people to grow. If you want people to become run, hit, throw, catch. That becomes more important. And what happens- 

Taylor:

It becomes critical at that point- 

Larry:

More so. 

Taylor:

… because they have to be self-responsible. 

Larry:

Yes. 

Taylor:

They have to be self-disciplined, because without those disciplines and having an understanding of what it takes to build and grow a team, then they become handicapped. And whenever we start talking about these compensation plans that take the distributor out of it and the core values out of it, where it’s not about them, and they have a control over their product or service, where they can make money regardless of whether they sponsor someone or not, that right there takes a lot of self-responsibility- 

Larry:

Correct. 

Taylor:

… out of it, because now they’re at the mercy of only sponsoring, which is one of the biggest things that people shy away from anyway. So these compensation plans and this speculation process, from me, what they did is they got away from a core value, they got away from a self-responsibility perspective, and it almost, it has the ability to make people think, “I’m not good enough.” 

Larry:

Right. 

Taylor:

“I’m not strong enough. There’s something wrong with me because I can’t do this fast enough.” And so then it’s easy to start playing blame game. 

Larry:

Yep. 

Taylor:

Blame what your upline’s not doing, blame what your down line’s not doing, blame what the company’s not doing, and taking the spotlight off of them and what they’re doing or not doing, and placing the spotlight at someone else’s feet. 

Larry:

Yeah, no question about it. Now listen, I’m going to build on what Taylor’s saying here, because when I talk about, there’s nothing wrong with a unilevel plan. Unilevel plan, if you put these fundamentals in, there’s nothing wrong with it, but there’s no place for it. And the binary plan, it’s the same concept. I’m not against the binary. What I’m against is the behavior that the binary creates, the behavior that the unilevel creates. Why? Because the problem is the people in these unilevel plans and the binaries, when they start up and even today, there’s a handful of them making more money than you can imagine, but you don’t have that school teacher as a rule. You don’t have that carpet cleaner, and the long haired hippie being able to take this self-responsibility factor on, to be able to grow and build the muscles to go there. Doesn’t happen, of course. Is it have speed bumps? Absolutely. 

 

So there’s nothing wrong with the compensation plans. What happens, it creates a behavior that doesn’t allow for the personal growth to take place to give the people the confidence, “If I can do it, you can do it.” Because they look up and all they see is the mansions. All they see is the Lamborghinis. All they see is the boats and all the jewelry, and they don’t really believe they can do it. Doesn’t mean that that’s not real, and it doesn’t mean they can’t do it. They can, I’m saying, if they have the fundamentals. There’s where the LT Academy, you know I hear this phrase, ‘Old school, new school’ all the time, you know? 

 

“Oh.” You know, “This is old school.” Hey, this is school, okay? I’m going to tell you what this is. This is school. This is run, hit, catch, throw, baby. That’s what this is. You got those things down, and you got self-responsibility, self … self-motivation, self-functioning, and you got yourself a company and product that you believe in. I don’t care what your compensation plan is. You add this stuff in, you watch what happens down line. I guarantee it. 

Taylor:

There’s no question, because … To me, from my perspective in this speculation process, it’s really handicapped our industry as a whole. 

Larry:

Yep. 

Taylor:

Because it has taking the leadership skills away from people, and so that is why we’re excited about working with you in the LT Wealth Building Academy. This is what really wealth building is, because it’s like you said. If you have the briefcase of skills, you can make any compensation plan work under any set of circumstances. We can take you and your brochure … 

Larry:

Yep. 

Taylor:

… and take you in a parachute, and drop you off, no matter what- 

Larry:

Without the internet. 

Taylor:

Without the internet, without all these technology tools, and essentially you could have the strength to go build your business, and build your team. That’s what we’re talking about. 

Larry:

Now- 

Taylor:

Because we want to drive the behavior that creates the stay at home mom, the single mom who only cared about $800.00 to, if you wanted to, to become the six figure earner. I’m not saying that that’s what you want to do, but I’m saying that if you have these skills that we’re talking about here, you can do whatever you want to do. 

Larry:

Let me tell you about a group that we were working with here recently. Fascinating story. Worked with them for a couple months and set them up. Basically, we’re like interior decorators. We came into the house and the furniture was already there, you know, all the couches, and the sofas, and the lamps, and the rugs. All we did was rearrange it, and talked about these things. In one month, in one month they went up 15 times, in one month. 

 

The next month they went up another six or seven times. I’m talking about this stuff is fundamentally sound and it works. Let me give you- 

Taylor:

Well, and I’ll just say, this is not … I hate the term ‘old school, new school’ because it is school. Because with these concepts that we’re talking about here, and building the muscle … We’re working with a group of millennials over in Italy currently, right now. These kids are 18 to 26, 27 years old, that are making six and about to hit seven figures. And they’re millennials. 

Larry:

Yep. 

Taylor:

They’re doing social media, but they’re incorporating these concepts and these briefcase of skills that we’re talking within what they’re doing, and eliminating all the speed bumps so they are moving faster, quicker, better. 

Larry:

Listen, I’m a big believer in all technology, big fan of it. Just gotta be able to tie it in to the fundamentals. Call me old school all day long. I’ll call you new school. What do you want? Yours without this? Or would you want yours with this old school concepts? It works every single time. 

 

Now let me tell you one more story that’s very interesting. Remember how the Herbalife we went down [inaudible 00:11:36]? Well let me tell you, it took me three, well actually seven years to rebuild the deal, and it was 1992 when we were at our lowest point in Herbalife. We didn’t know if we were going to survive and stay in business, and I believed that these fundamentals would work the same today as they worked before, everybody kept saying, “Well, you have negative name recognition, negative product recognition, negative marketing plan …” All of this. 

 

Did something very unusual. I went and bought another distributor kit and started over from scratch. From scratch, and put these fundamentals into place with all of those negative factors, and in ten months’ time we went from three million dollars a month in the same negative situation in America to twenty million dollars a month, and we drove that thing right back to a hundred million dollars a month internationally almost overnight, because of those fundamentals, and then look at what’s happened to the company since then. 

 

Anybody can get off track. Anybody can lose sight of the goals. I am telling you, these fundamentals work every … The relentlessness execution of fundamentals, tying it in with social media, a video, back in the ’80s, tying it in with social media. A fax machine, tying it in with the social media. A satellite program, tying it in always works. Now you tie it in with Instagram and Twitter, and you tie it in with Facebook, and you tie it in with all of these things. Listen, how long ago was the cell phone invented? Ten years ago? 

Taylor:

Ten year, yeah. 

Larry:

Ten years ago. 

Taylor:

Exactly. Ten years ago. 

Larry:

How long ago did we have Facebook Live? A year ago? 

Taylor:

Year and a half ago. 

Larry:

Year and a half ago. You tie these things in with that technology that keeps changing, changing rapidly, you put these fundamentals in, you’ll be … there’s no way that your group can stop you. You’re good at that? Get good at this.