Momentum Podcast: 288
Is MLM Legit?
by Alex Charfen
My opinions on Multi Level Marketing have evolved over time. My experiences with MLM led me to believe it was all just a scam. Being around some of the biggest entrepreneurs has completely shifted my mindset.
Full Audio Transcript
I'm Alex Charfen, and this is the Momentum Podcast, made for empire-builders, game-changers, trail-blazers, shot-takers, record-breakers, world-makers, and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution.
Sure, we pay attention to their rules but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat, because you only lose if you stop, and we don't know how.
While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future, and instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes make it real. We are the evolutionary hunters. Clearly the most important people in the world because entrepreneurs are the only source of consistent positive human evolution, and we always will be.
Is multi-level marketing legit?
As you already know if you listen to this podcast, I put a post on Facebook asking for podcast topics, and I got the question from Ray Higdon, "Is multi-level marketing legit?" And, I thought about whether I should do this podcast or not, because I think multi-level marketing in the entrepreneurial world is a bit of a minefield. People have really strong opinions one way or another, and I will share with you transparently and honestly, that for a long time I've been one of those people. And, I'll share with you my history with MLM and then how my opinions have evolved to where they are today.
So first, my history with MLM. When I was younger, in my teens, I actually got involved with a financial multi-level marketing company out in California. It was growing really fast, I got involved with a friend of mine, and I got involved like I do with just about anything: I went head-first. I started building a downline, getting leaders around me, building my revenues, and I was in it for about eight or nine months.
And, first couple months didn't really see a lot of results. Then, the next couple months, got thousands of dollars a month. Then, I started getting five or six thousand, seven or eight thousand, and about month eight or nine, the entire MLM was shut down by the federal government for being a Ponzi scheme and a pyramid. I had put so much effort in and so much time in, and it was early in my career, and it was this thing I was doing on the side, and it was supposed to be awesome, and it got shut down.
I was just furious, and I started doing research on MLMs. I did all of this backup information and research and reading and looking at it. I made the case against MLMs for myself, because I was so ticked off at what happened with company where I had put in a ton of effort. As far as I was concerned, it was wasted. I mean, now in retrospect, I know I learned a lot during that time: I learned how to talk to people, I learned how to sell, I learned how to prospect, I learned how to cold call, I learned scripts and dialogues, I learned how to follow a process.
There was all kinds of things that I learned in that time period, but all I could see at the time was that I had built this business, it was taken away, and multi-level marketing was a scam. That was my opinion, and that's an opinion I held, I'm kind of disappointed to say, for almost 30 years. I was 18 or 19 when that happened, I'm 45 now, and it wasn't until a year ago that my opinions about MLM started shifting. I'll tell you how it happened, because Ray Higdon was the guy who asked the question online, "Is MLM legit?" And, Ray Higdon is exactly the person who completely changed my opinion of multi-level marketing.
Last year in July, I was invited by Russell Brunson to go out to Las Vegas, to a mastermind, with a bunch of other couples and people, and it was incredible. It was one of the most intense brain-trust moments I've ever been around. First, just being around Russell in a casual environment, he is, by far, no question, absolutely, like, it's not arguable that Russell Brunson is one of the most progressive marketing minds on the planet.
He is changing the world of marketing. He is changing the world of business growth. He is completely standing entrepreneurship on its head. With Russell's strategies, people can get to a million dollars working by themselves. He's completely changed the game for entrepreneurs. So, being with Russell for a week, I can't tell you how much I learned, how much I absorbed, and how much I learned just from being around Russell. He is a intensely real entrepreneur. He is an intensely real father, a spouse, and a leader, and it was incredible.
Not only was it just being around Russell. This week that we spent together was stacked. We had Alex and Leila Hormozi there, Brandon and Kaelin Poulin there, and Trey Lewellen and his girlfriend Jennifer were there, and it was incredible. Tara and Justin Williams were there. I learned so much. Ezra Firestone was there. I absorbed so much and got so much out of that week, but I think one of the biggest things I learned was in an exchange with Ray Higdon.
I'm going to be really transparent right now, and Ray doesn't even know this, but when I went to that event, I'll show you just how closed-minded I was, and just how closed off I was. For the first day, I ignored Ray Higdon. I didn't try and talk to him. I didn't try and go near him. I actually kind of avoided his space in the room, because I was one of those people that it's like, "Hey, he's an MLM guy. I'll just stay away."
You know why. You know, ever since that time when I was 18 or 19, and that business got shut down, I can't tell you how many times I've been at lunch with somebody, and they've said they had something they wanted to talk to me about, an opportunity they wanted my opinion about. Next thing you know, they're pulling out the Herbalife or the Amway or the whatever MLM product it was, and I always felt like I was being scammed.
So, that original scam felt like it had just been continued throughout my life. So, I literally avoided Ray Higdon, until the second day. I was talking to Trey Lewellen, and I said something. Ray walked over and asked a question about it, and we engaged in a conversation. Here's the type of person that Ray Higdon is: Within about one minute of talking to him, my entire nervous system was having an issue. In my head I was like, "Oh my gosh, I really, really like this guy."
Just talking to Ray, instantly the energy was there. I wanted to talk to him more. I wanted to be connected to him. I wanted to understand who he was. Then, on the rational side of my brain, it was saying, "What are you doing? This is an MLM guy. Run! Run! Run!" and I couldn't. I couldn't. I just wanted to be around Ray. He's such an extraordinary human being, that I just kept listening and kept talking to him.
Later on that day, he spoke, and in about five minutes, he permanently changed my opinion and showed me just how wrong I was. And, I'll take this opportunity right now to apologize to anybody who's ever been in a multi-level marketing program who I've talked down to or criticized or made fun of or any of those things, because when Ray spoke, he totally showed me the right way to look at this.
He got up in front of the room and he said, "Guys, you know I'm involved with MLM, and you know, sometimes..." and I'm paraphrasing, but he said, "You know, sometimes, that gets looked at sideways or people look down on MLM", but he said, "I want you guys to know something: it's an incredible place for entrepreneurs to get their start. Some get their start here and they decide to stay here, but when it comes to learning how to sell and learning scripts and learning dialogues and understanding how to start a business, there's a lot of entrepreneurs out there who don't know how to get started on their own, and an MLM gives them an incredible opportunity."
I sat there thinking, "Gosh, you know what? This sounds right." Within two seconds Brandon and Kaelin said, "Well hey, we got started in an MLM." And I respect the two of them so much as entrepreneurs. I was sitting there thinking, "Well, wait a second, Brandon and Kaelin, who run LadyBoss, who are absolutely changing the world of weightloss, they started in an MLM? It can't be all bad." Then Ray Higdon, here's this guy who feels like somebody that I really want to be close to and understand, is in an MLM, and is a trainer in the MLM field.
That's what Ray does. He trains top MLM professionals, and that's why he was sharing that with us. As he said it, my resistance melted. Ray is that type of person that can change your opinion or change your behavior in one presentation. By the time he was done talking, I was sitting there thinking, "I've got some apologies to make." Because, what I've been doing is judging entrepreneurs who chose to go the MLM route, and what I should have been doing is look at them as entrepreneurs who are trying to make their way in the world, who are trying to gain some independence, who saw the MLM as an opportunity, who are doing everything they can to learn and move forward and grow.
You know what? For somebody who's in a job or somebody who doesn't know how to make money or somebody who wants to have a side income, the right MLM, with a product you believe in, is an incredible place to learn and understand and grow and start doing a lot of those things. In fact, when I look back at my experience when I was 18, today, with the perspective that Ray shared with me, I can honestly tell you I learned a ton from that MLM experience. I learned way more than anything that I lost in that experience.
Since I met Ray, that opinion of MLM has just been reinforced. It was the weirdest timing ever, because I met Ray, I started looking at MLM differently, I started asking around about it, and then I met Masa Cemezar and Miguel Montero who run a company called Pajama Bosses. They have a software platform that is helping MLM companies, MLM leaders, explode, grow their downlines, have much bigger organizations, and do it in an automated way. When I saw what Miguel and Masa were doing, when I met with them, it was so similar to Ray.
The day that I first talked to Masa and Miguel, I'm like, "Oh my gosh, I love these guys. I want to get know them. I want to help them. I want to support them." They are intensely passionate about what they do, and their energy comes through the Zoom screen when you're on the phone with them or when you're talking to them or when you're on a video conference with them. They're just so over the top passionate and excited about their life, that you sit there and think, "How do I become more like Masa and Miguel?" Again, now I'm working with a company and coaching a company in the MLM space.
Then, it happened again. It was a few months later when I met the team at Digital Genius Labs, another company that's in the MLM space, and they actually work with Masa and Miguel. They're clients of ours now. We work with Melissa and Sean Malone and Chris Baden. They are, again, incredible entrepreneurs. Every time I'm on with them, every time I get to connect with them, I feel this rush of energy and passion and excitement and momentum, and again, it's in the MLM industry.
So, to answer the question, "Is MLM legit?", here's my answer: If you find a multi-level marketing company with a product that you're passionate about, and it makes you excited, and you want to learn and expand what you're doing, and you feel like it's a platform where you could grow and pick up new skills and make some money, then I think, yes, MLM is legit. I think there are some companies out there that have products that I think are a bit laughable and maybe even a challenge, but overall, I think that the industry itself is something that provides an opportunity to entrepreneurs who want to get started.
I've spent my entire career criticizing MLM, and today, it's the opposite. I feel like anyone who signs up with an MLM, who starts working through the program, who starts signing people up, who starts selling, what they really are is an entrepreneur who's trying to make their way in the world, and an entrepreneur who's trying to get started, and an entrepreneur who's using the tools they have in front of them or available to them to go out and create momentum.
And so, is multi-level marketing legit? My answer is absolutely. Far too many incredible entrepreneurs, who I have a tremendous amount of respect for, are involved in the industry, for me to say that it's not legitimate. And, the fact that I coach two companies that are absolutely changing the MLM industry gets me excited, because here's what I know about entrepreneurs: When you look at the billionaire code, the vast majority of entrepreneurs are under $40,000 dollars a year in income.
For a lot of us, what we need to do is figure out how to get to that first threshold of making some money on the side, and MLM affords you the opportunity to do that, if you're just getting started. While some people might stay in MLM their entire careers, like Ray, or Masa and Miguel, or Sean and Melissa and Chris, other people get started in MLM, like Brandon and Kaelin, and it's a launchpad, like Brandon and Kaelin used.
They learned how to sell. They learned how to network. They learned how to influence people. They took that MLM knowledge and went from having a MLM business to having a health and wellness business where they help women lose weight and learn to love themselves again. They built that business to over 20 million dollars a year, influencing over 100,000 LadyBosses around the world. That was borne from MLM.
So, I think MLM's legit. I support you if you're in an MLM. I want you to grow to the point where you can start your own business or grow to the point where the MLM gives you everything you want out of the business you're starting there. And, for anyone who I've ever been impolite to, or criticized, or talked down to, or made feel less than because you were involved in an MLM, I want you to know I'm absolutely, 100% sorry. I apologize, and I feel like that judgment was misplaced and misguided and based on a bad experience I had and really based on shutting myself down to the possibility of what MLM could be for almost the past 30 years.
Ray, I just want to thank you brother for opening my eyes, for being the type of professional you are, for being someone that I respect online and offline, for being one of the few people who I actually go and seek out and follow and look at your posts, and I just want you to know, Ray, this is for Ray Higdon: If you weren't the over-the-top, incredible professional you are, I may not have made this critical correction in my opinions and in the way I treat entrepreneurs, and I just want to thank you for that, brother.
So, is MLM legit? Yes. Now, if you are ready to grow your own business, if you are ready to start really expanding your team, if you want to start moving things forward and really understand yourself better and have a foundation for every single day, let me help you. One of the most important things for entrepreneurs like us is a morning routine, and so many of us don't have a clear, scientifically developed, fully supportive morning routine, and you can right now.
In fact, if you go to morning.charfen.com, you can download my morning routine that's been developed over the last 30 years. It scientifically supports your body in breathing, hydration, nutrition, and movement. You cover all the bases in the morning and within an hour and a half, you will do more to support your momentum than most people do all week. Go to morning.charfen.com, and check it out.