Latest / Success Story with Scott Clary / Lessons - How To Get Rich in Direct Sales | Ryan Blair - Impact-Driven Entrepreneur & Best-Selling Author

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Lessons - How To Get Rich in Direct Sales | Ryan Blair - Impact-Driven Entrepreneur & Best-Selling Author · Success Story with Scott Clary

• 0:00
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  That's cornbreadhemp.com slash success code success for 30% off your first order of these
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  amazing gummies. In this lessons episode learn how a direct selling model drove
• 1:12
  Vesalis rapid growth and the challenges it faced. Discover innovative marketing strategies,
• 1:17
  the reward structure for sellers and key mistakes during scaling gain insights into managing
• 1:21
  public scrutiny, legal hurdles and sustaining long-term success in competitive markets.
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  How do you understand the business model for Vesalis? When you say direct selling model,
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  how does that differ from like a CPG company or a direct to consumer company now where they're
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  going online or they're going to retail like what does that direct selling model look like and
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  I guess I recognize a direct selling model from like an enterprise B2B space because you're
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  going pure outbound but this is a consumer product at its core so how did that work?
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  Well you're recruiting affiliates basically so the way to describe it would be an affiliate model
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  and you're recruiting affiliates to basically sell that product you know and in our unique innovation
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  was our marketing was a challenge and now you'll see on the internet everyone has challenges and
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  we brought challenges to social media so we launched a thing called the Buy by Buy
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  90 Day Challenge. When you join the Buy by Buy 90 Day Challenge you are encouraged to bring
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  three friends with you and when you brought those three friends with you we gave you your
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  product as free we built into our economic model incentive structure for you know well
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  in our cost model we built in the structure where we could bear that burden where the more people
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  that brought in three people the more free product we were shipping and at one point we're
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  shipping out you know tens of thousands of free kits free product kits per month as a result of
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  that marketing initiative. On the other end of that we had an incentive structure a compensation
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  plan that compensated our sellers based on them helping more people receive their product for free
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  and the more that they did that the more we unlocked additional incentives we had a BMW program
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  that we put 18,000 BMWs into our seller's hands through the BMW program we had a million dollar
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  cash bonuses if they you know did enough of the activity that we just described and so we built
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  a very complicated multifaceted multi-variable compensation plan and that was one of the big
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  primary reasons for the fact that we were able to you know grow and scale you know to the size that
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  we were we did. So it's a walking through numbers too so when you joined where was it at versus
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  because you won awards I think for turning this company around no at some point. So it went through
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  when I bought it it was doing about 20,000 a month in sales and then I scaled it to and I do
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  have to say I had a fantastic team it wasn't just me I hate even the fact that I say I because it was
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  a we you know I had great investors great business partners great founding team members and I was
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  my primary role was handling the finance raising the funds providing the strategic direction
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  and organizing you know the operation of the team but there were some great contributors along the
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  way but you know for the sake of of explaining how it went about it 25,000 built and scaled it
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  and this was in 2005 and then built and scaled it to the summer of 2008 where I sold it to a
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  publicly traded company called Blythe which was on the NYC. I was doing about 25 million a year at
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  the time a couple million a month in sales when I sold it immediately upon the signing of the deal
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  the great recession hit I sold it on 8 for 2008 and by September of 2008 the great recession hits
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  the company basically goes into severe debt I went from two and a half million a month roughly
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  down to 600,000 a month I'd accumulated a ton of debt to try to stay afloat
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  the business was burning cash to the tune of like $600,000 a month business was burning 600,000
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  we were down to about our last 600,000 the public company that bought us wrote us down to zero
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  and so the the gains that I was able to take off the table as a result of their acquisition
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  because it was a multi-year urn out it was structured as part of the acquisition I had to put back
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  and salvage the deal which myself and my co-founders and one of my other investors did
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  and we kept the deal alive we re-engineered the company came up with the challenge idea that I'd
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  mentioned and then from there I scaled it in a you know in a new economic environment post-recession
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  where excuse me we were able to take a lot of market share and and we were able to while our
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  competitors were retracting we cut our losses re-engineered our you know our compensation plan
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  re-engineered our product offering re-engineered everything and we were able to expand while
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  everyone else was retracting and we took the number one share in shake during that time we got to a
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  23% market share and we were number one over Costco GNC and everyone during that time based on
• 6:26
  the innovation that I described I just want to take a second and thank cornbread ham for supporting
• 6:31
  today's episode now cornbread ham CBD gummies have been this really nice addition to my wellness
• 6:36
  toolkit I don't use them every day just when I want to win wine after those extra busy weeks but
• 6:43
  they're perfect for those moments when you want to take the edge off and just find your balance
• 6:47
  really just shut off from work or make some special is how cornbread ham crafts them they only
• 6:52
  use a flower of USDA organic ham plants that's the best part for the purest most potent experience
• 6:59
  no fillers no artificial fluff just clean full spectrum goodness and delicious watermelon berry
• 7:06
  and peach flavor I keep them in my nightstand for those moments when I just need a little extra
• 7:10
  help relaxing and I love how transparent they are too every batch is third party lab tests it's
• 7:14
  you know exactly what you're getting and they put together a special offer for all success story
• 7:18
  podcast listeners all listeners can save 30% off their first order just head to cornbread ham
• 7:25
  dot com slash success and use code success check out that's cornbread ham dot com slash success
• 7:32
  code success for 30% off your first order of these amazing dummies that's amazing um now
• 7:40
  I know that there's been like as you built this up um obviously the the business model was
• 7:45
  successful but there was a lot of the you got a lot of pushback like there's a lot of shit
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  about this business model that that didn't vibe with people obviously it's come up again and again
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  so what went right what didn't go right why was there so much press around uh like how you
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  grew the company like why was this something that I guess it seems like you know there's a lot of
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  companies that do direct selling models um various companies do like affiliate multi-level uh
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  setups but in particular you were covered by tons of news outlets uh there was like some legal
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  issues that came up from this as well so I'm curious as to why this all came came to be one you
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  know I could tell you I made a lot of mistakes by all means um you know I uh I was hyper competitive
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  and I got into a lot of competitive oriented situations and lawsuits that you know and
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  retrospect I uh should not have the other thing is I sold to a publicly traded company and we
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  became the most meaningful portion of their revenue and so all the sudden we started getting a ton
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  of press around that every time the public company released earnings their stock would blow up
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  basically because you know they're publicly traded company which was basically a sleeper
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  endormant was zero growth and in fact was going downward and retracting all the sudden now add
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  hundreds of millions of dollars in revenue you know on a quarterly basis and
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  significant sums of profit and so all the sudden all eyes run us both from the media and from
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  Wall Street and you know we were um we were not a fortified business model by any memes the other
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  thing that occurred that was a big mistake was the publicly traded company couldn't afford to
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  pass the urn out so they persuaded us to go public and as a result of that now the sudden my company
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  as opposed to you know accelerating our growth and building fortification and building a strong
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  infrastructure my entire management team and everybody was focused on ringing the bell
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  myself included you know there's such a gratifying idea that I would you know take this company
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  from near bankruptcy to ringing the bell so we we lost our focus and lost our
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  our you know our our discipline to building a a company and fortifying at that time we should have
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  had done nothing but you know fortify for growth and and continue to invest in growth related
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  initiatives not try to ring the bell and go public we weren't ready for that so there were a lot of
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  things that we did wrong there are a lot of mistakes that we made you know um and you know some of
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  the the negative activity that we had was a short seller enticed in that there was a
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  we were the number one most shorted stock in all of Wall Street for my whole we're a year
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  and so you know there was so many people that were trying to stimulate negative activity against us
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  and then there was plenty of things that we did that were um you know just you know just the perfect
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  storm a perfect storm of everything it was rookie mistakes it was public too soon it was short
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  seller activity it's all this shit coming together that probably caused you a few gray hairs too
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  yeah the second thing is is when you know all of a sudden you're putting up uh a hundred million
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  in profit like every attorney in the world is looking to figure out a way that they can squeeze you
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  so the bigger you are the bigger the target that you are so I had short sellers going after me
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  I had ambulance chasers going after me I had competition going after me and then I was you know
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  also uh I was not ready for got onslaught by any means we had class action lawsuits that all
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  eventually got settled but a ton of them like there was class action lawsuit after class action lawsuit
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  after class class action lawsuit over a billion dollars of class action lawsuits against us at one
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  given time one was for texting incorrectly I had no idea that you weren't allowed to text people
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  another one was for product efficacy that we ended up winning and another one was for the way
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  the IPO was handled which I didn't know that I couldn't cite you know like you see Elon Musk
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  trouble that he's going through like every time I tweet I would have an SEC filing and another you
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  know citing in a lawsuit so I had no idea how to conduct myself as a publicly traded uh company and
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  as a public figure by any means yeah that's not that's not easy to say the and and do you still stand
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  by the like the core business model like the direct selling multi-level affiliate because that also
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  has gotten just a lot of negative so how do you do that model right yeah you you can so I will tell
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  you you you you can very much do that model right and there is a lot of um good that comes from
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  that model but you have to be very careful because compensation drives behavior and as you know human
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  behavior is very hard to calculate and so you might very well be creating you know great ideas and
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  great incentives and so forth they create behaviors that aren't an alignment with your personal
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  values and brand and when you have a million people out there marketing your company on your
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  behalf which we did you're going to have a lot of of of chaos and you're going to have a lot of
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  people that are doing it in ways that are not in alignment with your values and in alignment with
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  the brands values and so you have to have a strong compliance you have to have strong policing of
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  this you have to be very rigid and tight and and and it's a very difficult environment to do
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  correctly it's highly competitive and you know it's it's kind of like the wild wild west of
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  sales so I learned a ton from it I'm no longer within the industry at all so I can speak very
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  objectively about it and you know and I could tell you that there's some there's some great things
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  that come as a result of the industry but then there's also some you know some um some chaos that
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  it's a result as well if you're not correct if you're not disciplined and you're not forward
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  thinking enough to understand the various things that could come your way some of these companies
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  do create uh you know vehicles marketing campaigns messages sales systems and compensation systems
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  that are not great for the consumer thanks for tuning in if you found this valuable don't forget to
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  hit that subscribe button so you never miss an episode and if you want to dive deeper into this
• 13:59
  conversation check out the links in the description to watch the full episode see you in the next one