Empower Network Goes Bankrupt and Teaches the MLMers Pricelles Lessons!
by Giorgos Drosoulakis
I am not happy when a business fails … and MLM doesn’t need any more critics … but there is a lesson or two for us to learn when Empower Network files for bunkrupsy.
On its webpage “opportunity” David Wood and his associates claim:
Finally, Leadership Who “Gets It”
I’m here to tell you that your FUTURE doesn’t have anything to do with your past. Believe me, we’ve been there and we know what it’s like to take all your past life experiences — both good AND bad — and turn it into gold instead…
Because your future has EVERYTHING to do with what you are willing to commit to right now.
It has EVERYTHING to do with not settling for less anymore, and beginning to believe you ARE worth it.
It all starts by choosing to
Make Your Breakthrough Decision Now!
=====End of the EN Sales Pitch=====
….Now fast forward to the August 2017 bankrupsy filing of the Empower Network …
What happened to a healthy company that had grown from $1.5 million a month, to $1.5 million a week in sales? … that had gone from 5 employees, to over 105 employees? …. that had enjoyed an exponential growth from 50,000 customers, to over 197,000 customers?
Why did it get down from a $7 million turnover per month to $300,000 per month?
Side Bar Note: $7 million turnover per month, translates into something like $80+ million per year. According to Dr King, a company that reaches a $50 million in sales annually, experiences a phenomenon known as “critical mass”. Empower Network, not only did it reach critical mass, but it also went far beyond, into the “momentum growth phase”. This exceptional achievement did not help it though, to avoid bankrupsy.
Picking on the management is the last thing I would do … there is too many people on the Internet to take advantage of this unfortunate event.
Management mistakes? … yes … but who am I to judge?
However there is a lesson or two for the MLMers to be learned …
“Yes, Network Marketing companies DO fail with no exception … the 90% any business fail rate applies to MLM companies as well”.
Why? … because that’s life! … at the same time there is a number of lessons for us to be learnt.
Lesson one: Even MLM Companies fail.
Lets suppose that 100 network marketing companies opened for business simultaneously 10 years ago.
“On average, 60% of them, would not make it through the first year. This is average failure rate of any other type of business. MLM companies are not excluded from the rule.
“Statistics are staggering … only one in ten is likely to survive after ten years. In our case, Empower Network was launched on October 31, 2011. Before filing bankrupsy, it had been in business for six and a half years.
“The ten percent of the MLM companies that may not file a bankrupsy after a ten year period, represent the survivors.
“These ten hypothetical survivors, are being used by snake oil salesmen as what is called the “Survivorship Bias”. In other words the HIDE from the unsuspected the fact that there is a HUGE probability of 90% (NOT possibility) that any new MLM company can not survive to celebrate its tenth birthday!
“The “Survivorship Bias” is also beeing used to represent the tiny number of the company active reps who survived. You are never told that 95-98% of the reps fail to make any money and quit.
Lesson Moral: Should you leave your MLM company?
Answer: NO, if you like the products, the management and the com plan.
BUT, at the same time start building YOUR BRAND. Diversify.
… and what does “diversify” mean in building a real business with a MLM element?
Answer: add your own products which align with the MLM product line … your own ebooks, membership site, coaching program … not only do you provide solutions to your prospects who won’t join your MLM opportunity, but you also build YOUR business assets for the rainy day … yes, even MLM companies go bankrupt!
Lesson 2: Competing in the “Make Money On Line” niche is not recommended for newbies and for off line mlmers either
EN’s main product was a blogging platform.
A blog building tool … and a NETWORK which in theory would eventually become a reference platform for any subject under the sun … a sort of wikipedia but with blogs instead of webpages … if only things were so!
And here is where many problems started … the majority of EN affiliates, had no idea of the difference between building a blog and bulding a BUSINESS based on a blog or a website.
They got carried away by their illusion that selling business opportunity products is easy … however, the “how to make money on line” niche is the most competitive one and it should not be chosen by newbies.
Just because you read so many sales letters about IM, doesn’t make you an expert in this niche.
The two Daves always insisted on telling EN members to build their blog around a subject they knew and loved. Not to use their EN blog to promote the business opportunity.
But the vast majority of the tens of thousands of newbies NEVER understood it. Not only did they misused the product but they were not aware of their misusing either!
The bad news? … nobody wanted to hear about the “fantastic biz op” and buy-buy-buy my EN system so I can make some money.
Blogging and successful IM is about providing useful content to your website visitors.
They want to hear some good content. Whatever it is – From learning how to pass the SAT exams to the newest antiaging life style. EN bloggers should have branded themselves that way and get followers.
Then, and ONLY then you could ENABLE the Empower Network itself to do the marketing for them. The EN could have promoted their member sites ONLY if the blogs provided useful information about different subjects.
Once again D & D always told the EN members to do so. But they didn’t …
The consequence of not re-structuring their education systems? … EN bankrupsy!
Lesson Moral: Should’t you promote your MLM company as a business opportunity on the Internet?
Answer: Yes, but only as one “product” of your product line. Since the majority of your prospects will NOT join your MLM opportunity, your product line should offer a number of solutions your prospects are looking for. For example, you could offer a coaching service related to your chosen niche.
My take away? 101 start a business course with NO hidden agenda … there is NO MLM company that offers a real world start a home business, which is not related to their business opportunity. Most of your prospects would be more interested in learning the basices how to run an off or on line business, even if they don’t join your opportunity.