The Millionaire Fastlane (37 page)

When you blindly invest your life and time into someone else's brand, you become a part of their marketing plan.
You become a swab of paint in their big picture
. You resign yourself to the slim possibility of making good money vs. big money. Not investing in my own brand was one of my most serious mistakes as a young entrepreneur. Hitchhiking a Fastlane is an epidemic that deceives many would-be entrepreneurs. I say “would-be” because hitchhiking isn't entrepreneurial, because at the heart of entrepreneurship is creation and innovation. Hitchhikers aren't pioneers; they don't create or innovate. They sell, operate, and manage.

If the driver decides to close up shop, you're out of luck. If the driver decides to discontinue a product and it's your sole source of income, you're out of luck. Fastlaners control their brands, their properties, and their financial plans. They don't blindly give it to others and hope for the best.

Network Marketing As A Fastlane … Only If . . .

Network marketing is a Fastlane but only if you
own
the network marketing company. As a Fastlaner, you want to create these companies, not join them.

I have a lot of Facebook friends who are spiritedly engaged in network marketing (MLM). I don't espouse my world vision on them, because they have to see it for themselves. If they truly believe that $20,000/month is a great income, let them believe it. If they truly believe that their income stream will be passive forever, let them believe it. If they truly believe that they are in control, let them believe it. These people have to see the truth on their own.

It took me four network marketing companies to expose the truth. And that truth? The only people in the company who were living in houses on the Pacific Ocean with stables full of exotic cars were the founders and inner circle-not the distributors who signed up years later.

I don't hide my discontent for network marketing, although the reason for my discontent is misconstrued. Network marketing is a hitchhiking strategy that disguises itself as an entrepreneurial activity. My discontent lies in the misconception; millions fall for the pitches such as “Be your own boss!” “Own your own company!” or “Passive residual income!”

While there is a small sliver of validity to these claims, they cloud the real essence of MLM, which is sales, distribution, and training-not entrepreneurship. I was involved in four MLM companies. Not once do I remember dictating product decisions, research and development, marketing restrictions, rules, cost analysis, or any other activity fundamental to owning a business. As a network marketer, you don't own a business-you own a job managing and creating a sales organization. That's like stuffing money under the mattress and calling it an investment.

Years ago, I had friends who did well in MLM, and some of them still do. Heck, I even did OK. But two things always nagged at me. First, I had no control. I was at the mercy of the company, its policies, its procedures, its product line, its cost structure-and whatever mandate they set forth, I'd be stuck with it. I remember when my company discontinued its best product and my income plummeted through no fault of my own.

My friend who was making a nice living at MLM? He quit due to opposition over corporate decisions, and from what I hear, every few years he jumps from opportunity to opportunity. He continually repeats the cycle: Climb aboard some hot opportunity, run it dry, and move to the next. Last I checked, he isn't rich, nor is he retired. He's not stuck in a rat race, but a rabbit race from one carrot to the next.

The second nag at my mind was clear: I didn't feel like an entrepreneur. I felt like a worker bee stuck in a chaotic hive. I felt like an employee of a large company that was benefiting from the fruit of my hard work, even when hours of that hard work yielded few dollars. My essence knew I was violating a multitude of commandments and rules: the Rule of Everyone, the Commandment of Entry, and the Commandment of Control.

My dislike for the model lies in the misdirection conveyed to would-be participants; they think they're entrepreneurs when they're just salespeople and sales managers in a Fastlaner's plan.

Can these folks make a huge chunk of change? Of course, I don't argue that fact! Top salespeople in Fortune 500 companies also make a lot of money. Lottery winners also make lots of money. We're talking odds here, not absolutes. MLM distributors are commissioned employees disguised as entrepreneurs and working for a Fastlaner in a regime they don't control, but the Fastlaner does. Network marketers are soldiers in the Fastlaner's army.

So let me be clear to all those MLM folks out there ready to hang me: I love network marketing as an entrepreneur. If I ever invent a product that needs distribution, network marketing would be my first consideration. Furthermore, MLM has excellent educational value: sales, motivation, team-building, and networking. Network marketing can accelerate your future.

As for my friend, he is a hitchhiker of a Fastlane. What he doesn't realize is that to fully exploit the Fastlane road, you don't join a network marketing company, you create it. You must be the creator of the company that people are dying to join. You must be the controller of policy and product, and the producer.

The Fastlaner creates and invests in his own brand; the hitchhiker climbs aboard someone else's and hopes to piggyback a ride. If you don't control your system, your money tree, and your brand, you control nothing. You must sit on top of the pyramid and serve the masses.
Stop climbing pyramids and start building them.

Chapter Summary: Fastlane Distinctions

• Hitchhikers relinquish control of their business to a Fastlaner.
  
• There is a difference between “good” money and “big” money. Hitchhikers can make good money while Fastlaners make big money. Sometimes legendary money.
  
• In a driver/hitchhiker relationship, the driver always retains control and the hitchhiker is at the mercy of the driver.
  
• Hitchhikers are party to someone else's Fastlane plan. Make the world your habitat of play in an organization you control.
  
• Network marketing has little to do with entrepreneurship but more to do with sales, networking, training, and motivation.
  
• Network marketing fails both the Commandments of Control and Entry, and sometimes, Need.
  
• Network marketers are soldiers in a Fastlaner's army.
  
• Network marketing is a powerful distribution system. As a Fastlaner, seek to own one, not join one.
  

CHAPTER 33: THE COMMANDMENT OF SCALE

In business, to be a success you only have to be right once.
~ Mark Cuban

Speed Limit-15 or 150?

When your business road violates the Commandment of Scale, wealth acceleration is incarcerated within constricting speed limits. Drive any road with a speed limit of 15 and you aren't going to get anywhere fast. Scale is about leverage and leverage is what gives the Fastlane wealth equation its power.

N – E – C – (Scale) – T

Business leverage is like a playing field, or a habitat of water. You can choose to inhabit the ocean or a pool at the local park. There are six business habitats:

• Local/community (pool)
  
• County/city (pond)
  
• Statewide (lagoon)
  
• Regional (lake)
  
• National (sea)
  
• Worldwide (ocean)
  

Scale is difficult to find locally or in a pool that fits only a small number of people. Sure, it can be done, but it requires magnitude, and magnitude doesn't come cheap. If you own a tanning salon, your habitat is local. If you own an upscale restaurant, your habitat is county/city. If you own an Internet company, your habitat is worldwide. The larger the habitat, the greater the potential speed, or leverage, of your Fastlane.

Swing for Home Runs, Not Singles

Billionaire Mark Cuban recently wrote on his blog that it doesn't matter how many times you strike out in business because you only have to be right once, and that “once” can set you up for life. In other words, be in the business of home runs.

Business is like baseball. Play on a field where you can hit home runs; don't play on a field where they're prohibited! For example, if you own a clothing boutique on Main Street, you violate the Commandment of Scale because your pool of customers is drawn from the local trading area. To break scale, the business owner needs to introduce leverage in the form of replication: Open more stores, sell franchises, or sell on the Internet.

Unfortunately, most entrepreneurs engage in “singles-only” businesses. Their playing field is stunted. Their road screams “Speed Limit: 15.” The home run is impossible and their habitat shriveled. If you're a massage therapist, you won't awake one day and have 10,000 patrons outside your door. There is no leverage! And if you don't have leverage in the Fastlane equation, you don't have a chance! The Commandment of Scale is like a tollbooth on the road to the Law of Effection!

The Fastlane Wealth Equation: Disarmed

When you violate the Commandment of Scale you disarm the Fastlane wealth equation and demote its power to Slowlane status. Recall the Fastlane wealth equation:

Wealth = (Net Profit) + (Asset Value)

Asset value is predicated on net profit, which is predicated by unit profit multiplied by units sold.

Net Profit = (Units Sold) X (Unit Profit)

If “units sold” has a ceiling, you handcuff your ability to create leverage.
Without leverage, you can't create wealth exponentially
. When you travel a business road incapable of scale, you render the Fastlane wealth equation impotent.

My favorite example is the guy who buys a popular sandwich franchise in his local neighborhood. This business violates the Commandment of Scale because the variables-units sold and unit profit-are implicitly limited. How many sandwiches can this guy humanly sell in one day? Fifty? A hundred? How many hours are in the day? Twenty-four? See the similarity?

The objective of units sold is to have an upper limit greater than 100. How about 10,000? Or 100,000? Is there anything this sandwich shop owner can do to sell more sandwiches in one day? Under his current structure, there isn't. He is limited in scale to his local trading area. He'll never sell a cold-cut combo to a man living in Australia, let alone the neighboring city. Scale is limited, causing this road to have a constricting speed limit, just like a Slowlane road.

To make matters worse, the other end of the equation is also limited: unit profit. What is the maximum unit profit on a sandwich and drink? Two bucks? Again, we are operating under a ceiling of low numbers. These numbers don't transcend wealth; they limit wealth.

Now let me clarify before you hammer me over the head: I'm not suggesting that a local restaurant owner can't get rich. In fact, I know a few restaurant owners who do quite well except that they operate a different class of restaurant-upscale establishments, where scale and magnitude have more reach. If your average dinner bill is $200 and you draw patrons from all over the city, not just the local neighborhood, you operate on a different scale. Unit profit isn't $2 per sandwich, but $40 per person, and with alcohol it climbs to $60.

Reach or Magnitude = Scale

To achieve scale,
magnitude
or
reach
must increase. Magnitude is naturally increased with price or cost. If you sell Lamborghinis over Hyundais, you have greater magnitude simply by the implicit price of Lamborghinis. You are near Effection (Lamborghini owners most likely exploit the Law of Effection). If you are a real estate agent for the rich and sell multimillion dollar estates, you achieve magnitude implicit by price. Higher prices and cost implicitly drive magnitude. If you successfully sell the most expensive apartment building in Manhattan, you have had an effect of magnitude and realize scale. If you are operating with magnitude, you are near or at Effection.

Reach, exclusive of magnitude, also achieves scale. Reach is massive numbers. The more people you reach, the greater scale potential. Who does your business serve? The local neighborhood? Or the world? The bigger your pool of play, the bigger your potential for wealth.

The guy stuck on Main Street selling sandwiches has no scale and no magnitude. Is there anything this guy can do to turn his $40,000-per-year profit into $400,000? Nope. He's done before he even started. He didn't buy a franchise; he bought a job. He will never get rich until he wakes up and realizes that scale is not reached selling one-buck-margin sandwiches to 100 people a day.

Scale Is Leverage!

The Commandment of Scale demands a business that maximizes the Fastlane wealth equation. Give the Law of Effection a chance! Give wealth a chance! How do you know if your business (or potential business) honors the Commandment of Scale? Ask:

• Can the net income of this business scale limitlessly, say, from $2,000 per month to $200,000?
  
• Can the asset value of this business scale into the millions?
  
• Can this business impact millions? Or does it impact hundreds? Is its customer pool the world or a small community in the city?
  
• Can this business be replicated and expanded beyond the local trading area by franchising, chaining, or additional units?
  
• Best-case scenario, what is the units-sold potential? One hundred or one hundred million?
  
• Best-case scenario, how pliable is unit profit? Does it have magnitude?
  

If you can't affirm these questions, you might be stuck in a restrictive business where wealth creation is stifled.

Tiny habitats create tiny wealth. Scale is large numbers. Think big, nationally, and globally. Big numbers, or scale, is the inroad to The Law of Effection. To make millions, you must affect millions. That doesn't happen in a small store on Main Street, but in hundreds of stores across the country.