The Entrepreneurial Experiment

The Importance of a Good Company and a Good Team

Tue, 21 Aug 2007 23:45:56 +0200

Entrepreneurial Experiment – Days 4-5

So, as it would happen, life got in the way and I’m a little late on my latest posts. About midday on Friday my wife and I decided to take a mini vacation and head off to Vegas. Some times you just have to pack your bags and get out of town for a bit.

Although it was just a short weekend trip, it was the perfect getaway so that we could just relax and recharge our batteries. We stayed at the Venetian and had the opportunity to lounge out by the pool while the cabana boys and girls served us drinks all day long. Since neither my wife nor I are much into the gambling scene in Vegas, we decided to go and check out one of the shows. Although there were many to choose from, we decided to stay at our mini retreat and go to the Phantom. It was spectacular! I guess they have built a special theater just for it and the sets and stage production was absolutely phenomenal.

Anyway, back to the experiment. . .

My next two days plans were to explore what to look for in a Network Marketing company and to make sure that you are joining a good team. First, let’s examine the company.

As we have already discussed, it is important to do a lot of research into a company before you join it. This is important for a number of reasons, most importantly being able to determine whether you are dealing with a real Network Marketing Company or a Pyramid Scheme.

One good indicator that you are dealing with a “stand up” company is that, when you are doing research, it is really easy to find information. Information should be easy to find either through search engines like Google or, better yet, press release agencies like Marketwire.com.

If you can’t find any information on the company and the website that they give you is full of stories about how much money you can make then WATCH OUT!! You are probably dealing with a poorly structured company or a Pyramid Scheme.

Here is a good test to determine whether the company is good or not. Check and see if it is a publicly traded company. There is one thing that you can be sure of; you won’t find a pyramid scheme being traded on the stock exchange. The SEC (Security and Exchange Commission) is very thorough with the companies that it lets influence our economy. If it’s publicly traded then it’s probably okay.

Also, make sure that you are joining a company that has a good team, and join that team. If your uncle Joe is part of an MLM and hasn’t been doing well because he is a part of a weak team that provides no support, DON’T JOIN HIS TEAM, even if it is a good company. Find out whose team is the best in the company and join that one. If you are serious about making a go at a Network Marketing business then being on the right team could be one of the most important things that you can do. Explain to Uncle Joe and hope that he doesn’t feel too bad. If you do it right and are successful, help Uncle Joe later on and show him what you did. Being on a good team (aka having a good up-line) will also help you get started quickly. It is almost certain that you will need time to learn the product and the system in order to be able to explain it to other people. Having a good team will help speed that process (more on the importance of the team after I have made my company decision).

My next Journal entry will examine the importance of being passionate about the company and the product before you get involved.

On another note, since I have not mentioned it yet, I am also looking at a few more companies. In addition to those mentioned I am also looking at Tastefully Simple through one of my networking friends, Lisa Marie Stelly (www.tastefullysimple.com/web/lstelly), YTB or Your Travel Biz (www.ytb.com) in which I am still looking for an up-line associate, Ethos fuel re-formulator through my friend Bill Schallmo (www.4planetearth.com/home.php?sp=bigbadfuelsaver) and a company called Lifewave (www.lifewave.com) where I am also looking to talk to an up-line associate. More on these products when I make my decision.

Until Next Time!!

The Entrepreneurial Experimenter
EntrepreneurialExperiment@gmail.com

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Daily Activities – Day 3

Fri, 17 Aug 2007 08:13:54 +0200

Today I began looking at two more companies: Nouveau Riche University and Send Out Cards.

Nouveau Riche University is a company that teaches real estate investment. Its product is education in Real Estate Investment along with a foundation for being able to purchase and invest in various Real Estate ventures. I am currently examining this venture through a networking friend named Stephen Gregg. You can check out his site at: http://www.newwealthinvestors.com/index.aspx. I am also looking at a company called Send Out Cards. Send Out Cards is a great way for business owners to keep in contact with their customers or individuals with their friends and family by using personalized “hallmark style” cards which are sent out by the company to your personalized data base. For research into Send Out Cards, I am consulting with another networking associate, Barry Fidel. Check out his information at: www.acardforyourmom.com.

Again, I am adding these companies into the mix and will be examining them and deciding among them at the end of the week.

Tomorrow I will be looking at two more companies: Ethos fuel reformulator (http://www.4planetearth.com/home.php?sp=bigbadfuelsaver) and Lifewave patches (www.lifewave.com)

Thanks again for tuning in!

The Entrepreneurial Experimenter
EntrepreneurialExperiment@gmail.com

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The Pyramid Scheme

Fri, 17 Aug 2007 08:12:36 +0200

The Entrepreneurial Experiment – Day 3

Yesterday, I had the opportunity to define Network Marketing and Multi-level Marketing. Today I will be going into a little more depth into the Pyramid Scheme and how it is different.

We determined yesterday that the main difference between Network Marketing/MLM and a Pyramid Scheme is the focus on product.

Wikipedia defines a Pyramid Scheme as, “a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered, and is highly illegal”.

In other words, Pyramid Schemes focus on a compensation plan that is primarily based on recruiting other members into the business and has little or no focus on any tangible product.

In an article by Reem Heakal at: http://www.investopedia.com/articles/04/042104.asp, Reem describes a Pyramid Scheme in its truest sense like this:

“It starts with one person - the initial recruiter - who is on top, at the apex of the pyramid. This person recruits a second person, who is required to "invest" $100 which is paid to the initial recruiter. In order to make his or her money back, the new recruit must recruit more people under him or her, each of whom will also have to invest $100. If the recruit gets 10 more people to invest, this person will make $900 with just a $100 investment.

The 10 new people become recruiters and each one is in turn required to enlist an additional 10 people, resulting in a total of 100 more people. Each of those 100 new recruits is also obligated to pay $100 to the person who recruited him or her; recruiters get a profit of all of the money received minus the initial $100 paid to the person who recruited them. The process continues until the base of the pyramid is no longer strong enough to support the upper structure (meaning there are no more recruits)”.

After taking a look at the differences between a Network Marketing/MLM company and a Pyramid Scheme, here is what I have come to conclude:

1. Product is extremely important.
a. Look for a company that focuses on a product or service and make sure that the product or service could stand on its own in another company environment in addition to the Network Marketing Environment.
b. If it can’t stand on its own then run for the hills!!
2. Look for a publicly traded company.
a. The SEC heavily scrutinizes companies before it allows them to trade on the stock exchange. If a company can sell stock then it is probably a good indication that it is not a Pyramid Scheme
3. If the compensation plan HEAVILY relies on you recruiting other people and doesn’t focus on a particular product or service, be very wary (my recommendation is to find another company).
4. Make sure the product or service can stand up to its claims.
a. The reason why Network Marketing/MLM companies have developed bad reputations and are often confused with Pyramid Schemes is that Pyramid Schemes often try to pass themselves off as Network Marketing companies.
b. By making sure that the product does what it claims to, you will reduce the risk of falling for a Pyramid Scheme.

Hopefully this was helpful in determining if you are looking at a valid Network Marketing/MLM company or are looking at a Pyramid Scheme. Tomorrow I will be examining how important it is to examine the corporate structure and make sure that you are dealing with a good company.

See you tomorrow!!

The Entrepreneurial Experimenter
EntrepreneurialExperiment@gmail.com

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Network Marketing Defined and Daily Activities

Thu, 16 Aug 2007 00:08:19 +0200

The Entrepreneurial Experiment – Day 2

Whenever I have thought about Network Marketing or MLM (multi-level marketing) I have had conflicting emotions, mostly revolving around the whole pyramid scheme thing (I will more thoroughly define this in a later blog). There seems to be a big misconception that all 3 of these business models are the same when in fact Network Marketing and MLM are very different from what is known as a Pyramid Scheme.

The bad rap that has been given to Network Marketing/MLM seems to have come from various Pyramid Schemes trying to act and have the characteristics of the other two.

Let’s start with Network Marketing and define exactly what that means. By definition, Network Marketing/MLM is a system of selling goods or services through a network of distributors. The key is that there is a focus on selling a product as opposed to making money by selling the distributorship. Network Marketing/MLM believes in the power of creating a large amount of distributors in order to facilitate the sale of the product. The Pyramid Scheme is only interested in making money by selling the distributorship and the product is either secondary or in some cases non existent (I will examine this in more detail in later posts).

The bottom line is that in my search for the right Network Marketing company to conduct this experiment, I will be looking for a company that could stand and survive off of its product or products alone. For example, Mary Kay Cosmetics could sell its products within a retail environment and conventional advertising instead of marketing it through distributors and word of mouth.

Tomorrow I will take a closer look at the Pyramid Scheme in order to get a better understanding and provide better definition.

I was hoping to give a daily analysis of at least two Network Marketing companies but I am finding that there is so much information to be examined that I want to make sure that I understand it fully before I start explaining it.

Right at the moment I am studying 2 companies. In my opinion, you can’t do a study like this one without including the company Amway or as it is now known Quixtar (www.quixtar.com). In many ways, Amway is sort of the founder (at least in perception) of Network Marketing/MLM. It is also one of the companies that have generated some negative feelings towards this type of business model. The other company I am examining is Pre-Paid Legal. I am doing research with them through a good friend and PPL associate, Michelle (to visit her site, go to: http://www.mnanney.com).

What I have decided to do instead is compile the information from all of my prospective companies and do an overall analysis at the end of the week (or when I feel comfortable with the right company) which will explain my decision making process.

One of the issues that I am running into which is making it difficult to conduct a daily analysis of a company is that most MLM’s want you to get your information about their company through one of their distributors. Luckily with Pre-Paid Legal I have my great friend Michelle to help me out. With the remaining companies I am either doing my best with internet research or setting appointments with representatives of various Network Marketing companies.

Tomorrow I will be defining and examining the Pyramid Scheme in more detail and taking a look at two more companies; Nouveau Riche University and Send Out Cards.

Stay Tuned!!

The Entrepreneurial Experimenter
entrepreneurialexperiment@gmail.com

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The Entrepreneurial Experiment ? Network Marketing

Tue, 14 Aug 2007 18:02:16 +0200

Welcome to my first journal entry for the Entrepreneurial Experiment. My plan is to conduct a 6 mo. experiment analyzing the concept of Network Marketing (aka. MLM).

During the 6 mo. time period, I will be examining what Network Marketing is and picking and working my own company. I will be cataloguing my results in journal form.

During Week 1 I will be devoting my time to the research of what Network Marketing is and analyzing different companies in order to make my selection for the company that I will join. Company selection will be based on the following criteria:

Company Strength
Infrastructure
Product
Compensation
Startup costs
Training
Teambuilding
Potential for help from my up-line

I will be looking for something that has a low startup cost (under $500), has a strong corporate structure, a good product that I can sell, a good team to be a part of and something that I can be passionate about and have fun with.

Hopefully, I will be able to have this taken care of within the first week so that I can hit the ground running by week two.

It is my intent to update my log on a daily basis; however such a feat may not be possible. Sometimes life gets in the way. Hopefully, if I miss a day it will be due to the fantastic success of my entrepreneurial experiment.

Please feel free to check back periodically to view my progress.

Sincerely,

The Entrepreneurial Experimenter
EntrepreneurialExperiment@gmail.com

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