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Bo Short's thoughts on the
Quixtar "Complementary Business"
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Bo Short dropped me an e-mail offering his own rebuttal to Orrin Woodward's "complementary business" argument. I will be happy to respond and give you my opinion regarding parts of the essay that is apparently attributed to Orrin Woodward. Let me first say that much of what I read is similar in texture to what I was taught in the same business. Having resigned more than 2 years ago I find it quite intriguing that similar, and in my opinion, shallow responses are still being offered. While most of the examples I read sound logical, they have little-to-no application to the business support materials business. Unfortunately, some people want to believe so much that they will allow these types of illustrations to cloud their judgment. Example: If you say to your upline that the products are expensive, the standard response might be, "What are your dreams worth?" Even though that sounds logical it is not applicable to sound business judgment. Can you imagine if McDonald's had such a big dream they decided to start charging $5 for their hamburgers? Burger King would put them out of business. In business, there are laws; marketplace acceptability, supply and demand, law of diminishing returns, etc. In my opinion, one of the mistakes many people make is to process the type of information presented here in such a way as to suspend good business sense. Lastly, Orrin apparently made the following comment in this essay: ATTRIBUTED TO ORRIN: "Before Laurie and I built our own home theatre we loved to take the Woodward clan to the matinee movies. After buying the movie tickets and heading towards our theatre, one of the kids would want popcorn, another candy, and of course, drinks to wash it all down. A twenty-dollar movie changed into a fifty-dollar expense through the "business within a business" concept. The movie theatre, knowing they have a captive (hungry and thirsty) audience, built another business with their food and drink concessions. Since there are no other concession stands to compete with theirs, the theatre does not feel the normal free enterprise effects of competing products, and prices are usually marked up on popcorn and soda pop by at least 300%. Although consumers may not like the prices, we still have choices. We may choose to not go to the theatre or to simply not purchase concessions while at the theatre. There is nothing "inherently fraudulent" in this plan since consumers still have choices. The consumer is still able to evaluate the value proposition (value = worth/cost) with respect to which theatre to attend, if any." Bo's Response: I would agree that there is nothing inherently fraudulent in this example. That would be silly. You can choose not to eat from the concession stand. However, can you imagine walking into the theater without a bag of popcorn and a coke and being told by the other patrons that, "you must not really be interested in this movie if you have no food." "How can you expect to enjoy this movie without a coke?" "Stephen Spielberg went to all this trouble to make this movie and you do not even respect him enough to buy the food." etc. I believe that the following statement attributed to Orrin has more to do with the role the system plays than most people realize: Maybe the following audio attributed to Rich DeVos will shed some light on this: http://www.amquix.info/sounds/rd_you_present_wonderful_numbers.mp3 I would also like to point out that there is no pretense made about the concession stand at a movie theater. You are not told that you can ONLY enjoy the movie by spending your money on overpriced food. However, you are told by most of the so-called leaders in the system business that the only way to success is through the system. ATTRIBUTED TO ORRIN : "Michael Jordan (MJ - one of my favorite athletes) is another individual who understands the "business within a business" model. Michael did more to make money than just play basketball. By the early 90's Michael was earning an income from the Chicago Bulls in the neighborhood of $3 million dollars. Not a shabby income, however, according to Jack McCallum of Sport Illustrated, this represented less than one tenth of his annual income. 1 MJ knew that his basketball game opened the door to other business opportunities like his well-known Nike, McDonald's, Coca-Cola and Wheaties endorsements. Again, there is nothing "inherently fraudulent" in this plan since these companies freely chose to pay MJ for his endorsement and customers freely chose to buy products MJ endorsed. In a free enterprise society all businessmen who are smart will develop "piggyback" businesses. A "piggyback" business is one that supports the main business and becomes its own profit center (a business within a business). Many times the "piggyback" business becomes more profitable than the main business. One of the greatest assets of free enterprise is that money will flow to the person who satisfies the consumer the best on a consistent basis. In this case MJ created a "piggyback" business that actually made significantly more profit than his main business of playing basketball. Many other athletes, business owners, and celebrities utilize the same "business within a business" model to build their businesses and careers."Bo's Response: Once again this is true, but not applicable to this particular discussion. Michael Jordan was not regulated by the FTC. He did not have to satisfy customer rules, 70% rules, etc. I found the following comments attributed to Rich DeVos very interesting: http://www.amquix.info/sounds/rd_tools_pyramid.mp3 Orrin comments how this so-called business within a business represented more than 10 times MJ's annual income. As an example, is Orrin saying that if his product income were $250k that it is okay for his support system income to be $2.5 million? If this is true it seems to contradict what the founder of Amway said in the preceding clip. Also, if this is true I wonder what the average distributor would feel if they believed that a multi-million dollar lifestyle was a result of a so-called piggyback business? Are they to conclude that their upline is profiting more than 10 times from the tools than the products? Is this where their hard-earned money goes from the purchase of the system materials? Another interesting comment attributed to Rich DeVos: http://www.amquix.info/sounds/rd_other_business.mp3 I wonder if the author of this essay really thought through their comments? I would suggest that MJ's endorsements were not designed to support his athletic career. It was an entirely different undertaking. I assume he never believed, nor was told, that if he modeled well for the Wheaties box that he would play basketball better. I am curious, since Orrin apparently says that this piggyback business fits "multi-level law", would the following income claims sit well with the FTC? I would also be curious if these claims were made in a Quixtar setting in which people are lead to believe that the movement of products created this wealth...not tools? I can only assume that the Quixtar business did not create this apparent wealth because the figures the corporation publishes seem to contradict these types of claims. Examples: Founder's Diamond
Founder's Diamond ATTRIBUTED TO ORRIN: "Someone with wrong thinking would criticize MJ for making more from his endorsements than his NBA games, but this would be a lack of understanding of free enterprise. The consumers are sovereign in purchasing decisions and if someone makes more money in a free enterprise system it is through the free choice of consumers in the market."Bo's Comments: In a marketplace where only the "state" makes and sells the products there is no free enterprise. According to an Amway corporate document, known as the Postma Memo written in 1983 discussing the system, it states, "...it is not a free enterprise opportunity. A downline Direct is not to compete with an upline Diamond." Interestingly, the document goes on to say, "The tool business (motivation) is illegal." The entire text of the document is mind-boggling. ATTRIBUTED TO ORRIN: "Consumers have the ultimate power in a free enterprise society and vote with their dollars for the companies that best satisfy their demands."Bo's Comments: That sounds great. However, if I am not mistaken it appears as though it would be a violation of the Q business compendium for someone to shop for a better system and then promote it to their team. I am curious, wasn't Orrin affiliated with InterNet at one time? When he began developing his own tapes and literature did he only promote them to his personals or did he induce other distributors to participate that he did not personally register? Wouldn't this behavior be a violation of Rules 4.14 and 1.14.1? Do these rules apply to the diamonds also or just to everyone else? rev. November 2000: "4.14. Other Selling Activities: No IBO who personally sells products other than the Corporation's products, who personally sells literature or sales aids not produced by the Corporation, or who sells services (e.g., tax services, insurance, investments, etc.) will induce another IBO whom he has not personally registered to sell such products, literature, sales aids, or services, or shall he or she offer to sell such products, literature, sales aids, or services to any IBO except those personally registered by him orher. Induce means persuade (to suggest or attempt to persuade) another IBO whether or not this is done to obtain revenues or for any other reason...IBOs may engage in other selling activities related to non-Corporation-approved or non-Corporation-produced products and services if they personally desire to do so, but they may not take advantage of any activity organized to promote the Corporation's products or the Corporation, or any other IBO's efforts or resources, or of their knowledge of, or association with, other IBOs, especially those not personally registered by them, to promote and expand their other selling activities. To do so constitutes an unwarranted and unreasonable interference in the business of other IBOs. This does not mean, however, that an IBO regularly engaged in the operation of a gasoline station, repair garage, retail establishment, barber or beauty shop or a professional service (law, medicine, dentistry or accounting) may not serve clients or customers who are IBOs and have sought them out, but it does mean that such IBOs may not actively solicit the patronage of other IBOs who are not personally registered by them. 4.14.1. This section also applies to privately developed Business Support Materials ("BSM")." ATTRIBUTED TO ORRIN: "The reason the Team of Destiny® (TOD) has grown at 250% per year since 1999 is due to a total cultural focus on satisfying our IBOs, Members and Clients."Bo's Comments: This may in fact be true. However, I would ask myself three questions:
Am I really satisfied? I would agree that there is a definite cultural focus. It was my experience that, in essence, the army was feeding the generals and the army was starving to death. People are constantly told that everything is great. Regardless of their inner anxiety they have been conditioned to respond to questions about their state of mind by saying, "We're great!" Unfortunately, I believe many weep silently because they do not understand why everyone around them is seemingly doing great and they are not. I believe if people would listen to their instincts rather than the tapes they may more accurately assess their satisfaction...or lack of. ATTRIBUTED TO ORRIN: 1."No money goes directly to Diamonds or anyone else based on "pin level." Every penny is in profit sharing pots and bonuses are paid based on per-leg performance, which allows a performer to pass a non-performing upline." 3. "All IBOs at Platinum and above are paid on how well they served their team. "As you perform, so shall you bonus." Bo's Comments: I just found this odd that such an apparent contradiction was made and only separated by one sentence. ATTRIBUTED TO ORRIN : Much of our culture has a feeling of resentment about anyone who has achieved success. Resentment values its own welfare less than it does the debasement or harm of its object. When someone swallows the resentment values, they will spend untold hours attempting to justify their hatred and victim status. Most people, if they attempt something great and miss the mark, know that it is a learning experience on the journey of success. A small percentage of people, when they fail, focus on whom to blame. The choice is yours to make: a life of excuses of why things didn't turn out as planned and hating others for your lack of results, or accepting responsibility and beginning the journey of success with the TOD or another business.Bo's Comments: From my perspective, I do agree that there are some people that are jealous of the success of others. However, I believe it is a small part of society and not "much of our culture." I would suggest what people resent in our society is being mislead. It takes courage to put one's skepticism aside and trust a stranger with their future. Even though it may not be prudent to follow blindly it is a part of many people's nature. Recently some large corporations like Enron and Worldcom have been embroiled in controversy. Even though they gained our trust, we now know that they mislead us. One of the things that we should take away from this example is that simply because someone tells us something and makes it sound good does not mean it is true. Bo Short The preceding comments are based on my experiences and opinions. |
Orrin Woodward on PPS-20 states: