LIFE: Downside Risk & Upside Reward
Posted by Orrin Woodward on November 21, 2011
When I worked at Delphi division of GM, I completed half the classes for a Master’s degree in Business Administration from the University of Michigan. Although I received good grades and enjoyed the classes, I stopped pursuing my MBA in order to build my own business.
Many thought I was crazy to quit my MBA, but I just had a feeling that it was time for me to build my own business rather than continue to learn about business. In truth, I was ready to implement some of the principles that I had learned along with continuing my education in “the school of hard knocks”. 🙂
One of the best principles that I learned through my MBA program was to examine any business by asking two crucial questions:
Simply put, if the downside risk was too great, then don’t do it, because it could capsize the entire ship. However, if the a person could handle the worst case downside risk, and the upside reward was big enough, then perhaps it was a business venture worth committing to.
It was these two questions asked and answered that led me out of school and into my own business venture. What is ironic today, as I look back on Laurie and my business ventures is the level of risk taken in our former business model compared to the risk today for someone joining LIFE. Remember, Laurie and I were dead broke even as an engineer and an accountant. In fact, we were beyond broke, having consumer debt amounting to over $30,000 when we started our networking careers!
With monthly expenditures to buy 100 points of volume in my old networking company requiring Laurie and I to spend $300 dollars or more, we barely endured. This was quite a blow to an already stretched budget. Along with the product purchases, the investment in CDs, books, and seminars (all of which I loved) totaled another $200 plus dollars per month. In other words, on top of a stretched budget, Laurie and I had to budget for another $500 dollars per month minimum! The downside investment nearly killed us for the first several years. Thankfully, Laurie and I are both long-term thinkers and kept the vision in front of us. However, many of the people we started with us did not have the same endurance, dropping out along the journey to success.
What kept Laurie and I focused was the upside reward, we figured we could make an extra $25,000 after expenses in a couple of years. It’s laughable now how much work we did in a model whose highest rewards topped out at 25% volume discount on total group volumes of $20-30k per month. I know, I know, this is sounding like one of those stories: we walked uphill both ways to school through heavy snow. 🙂 Even so, these are the facts we were dealing with.
I am not knocking networking. In fact, I am thankful that someone had created any opportunity for us to apply our sweat equity towards freedom. We had to make many changes, both personally and professionally to get the business rolling, but eventually, we made it happen. To this day, many people around the world utilize the TEAM system of building, called team approach to grow their businesses. I take this as a compliment for our years of effort in improving the upside reward compared to the downside risk for our entire industry.
Today with the LIFE business, the downside risk versus the upside reward is nothing short of revolutionary. A person can sign up for the LIFE and LLR subscriptions, and generate 100 points for $100. This, in my opinion, is much better than some networking companies, where you buy commodity products at inflated prices, especially if a person can buy comparable products at Walmart and Target for significantly less. Networking should be world class, unique products, at a super value! Many networks provide this, but many others just markup commoditized products. When products are overpriced, it hurts our whole profession. In LIFE, a person can purchase the lowest cost leadership materials on the market from the only company that has two leaders on the Top 30 Leadership Guru list.
How can we offer our material at the best price and yet have a compensation plan that pays 50% on just the first type of bonus? The simple answer is the founders desire to influence the world is greater than the desire to pad their pocketbooks. Imagine if we took world-class leadership materials and provided it at the lowest prices. Then, imagine taking 70% of all the revenue points generated and flowing it back to the people who helped LIFE launch the leadership revolution. Remember, in LIFE, your pay raise becomes effective as soon as you do. 🙂
So what is the downside risk in this model? Hmm, let me think. . . The downside risk is that you might not enjoy the leadership training from two best selling leadership authors and business partners. If at any time you do not see the value in the leadership materials, you have a 30 day “no questions asked” return policy. Certainly within 30 days, you could discover whether the leadership materials is helping you or not, right?
The downside risk is negligible. But what about the upside reward? With a compensation plan that pays out 70% revenue points to anyone who achieves a minimum of 150 points of business, the networking game is changed forever. For example, Laurie and I personally started a new leg on November 4th. It has already achieved the 20% bracket and is easily going to hit the 25% bracket later this week. It took me two years to hit the 25% bracket in my first company!
Why the huge difference? Because we have a digital age business, a compensation plan that rewards people at the low end, and founders who desire the wealth to flow to people who build the network, not found the company. Another factor is the demand for quality leadership materials at an affordable price point. LIFE has already signed up hundreds of customers doing tens of thousands of points, making volume accumulation easier than ever before in my networking experience.
I have taken my share of criticism for not going along with the herd in networking. I have refused repeatedly to sell out my character for conveniences. This has cost me money, time, and relationships over the years, since, in my opinion, some of my former heroes chose to sell out rather than fight for what is right. Anytime someone desires to change the rules of the future, he will be attacked by the protectors of the past. I have received, and will continue receiving personal attacks for changing the rules. However, although they can attack my reputation, they cannot touch my character. Better they criticize me than I be them. The only people calling LIFE a scam are fearful competitors or woefully ignorant individuals. 🙂 Make no mistake, I will never surrender my principles for peace. I believe that it’s more noble to create the new, rather than criticize the old, so LIFE is our opportunity to do so.
If you have ever tried networking and didn’t make it work, then welcome to the club. Millions of Americans and Canadians have tried networking and failed in their attempt. This doesn’t make you a failure unless you blamed someone else. LIFE has changed the risk versus reward ratio to such an extent that many are achieving success who previously only struggled.
For example, my yacht captain, Bill Howard, is already at the 40% bracket and just a sliver away from the 45% bracket (Update: Captain hit 45% the same day I posted this!). We were quickly calculating his bonus for this month at around $800. Remember, Captain Bill has been in networking since 2005 and has averaged $50 or less per month with his highest one month check around $250! Like I said, LIFE is a game-changer.
Alright, it’s time for me to get back to work. I have promises to keep. It’s time to reach one million people with leadership truth in the 8F’s of LIFE. A rising tide lifts all the ships on the water. Don’t you think it’s time to get your ship on the water? Sincerely, Orrin Woodward