You’ve undoubtedly heard the shockwaves coming out of the network marketing community after the release of the documentary “LuLaRich.” If you’ve followed Kristen for any length of time, then you know she’s not one to shy away from controversy. And in this week’s episode, Kristen gets into the nitty-gritty of how when things go wrong in this business model, it’s important to see the lesson to be had instead of something you feel the need to defend.
Today’s episode is the first part of a two-part series and starts by looking at how the industry as a whole can learn from the past mistakes of those who worked behind the scenes at LuLaRoe. While the documentary tries to shed a negative light on the network marketing industry, Kristen is ready to put the spotlight back on those who are working to revolutionize the industry.
Here are just a few highlights:
- What healthy growth in your business is supposed to look like on a macro level
- The definition of ‘Horizontal Hostility’ and how it cheapens the industry
- Kristen’s own experience in selling wholesale clothing
- Importance of having the conversation about racial diversity within the industry
- Reactive Growth: Why you must slow down to grow your business over the long haul
You might have heard people in the industry pointing fingers and blaming the company for everything that went wrong. When we start pitting companies against one another and playing the blame game, it does nothing but continues to spread the negativity across network marketing as a whole. Today, let’s agree to lift each other up and work together to revolutionize this industry.
Have you heard about the 90 Day Goal Getter Challenge? Starting October 1st, Kristen is ushering in a brand new challenge to encourage members of the Social Selling Academy to crush their goals and leave 2021 as being one of their best years to date. And as an extra bonus, when you join the Social Selling Academy between now and October 1st, you’ll receive a free printed copy of the 90 Day Goal Getter Challenge Self-Coaching Workbook. You won’t want to miss this, join the Academy today.
Thanks for listening! Do you have a question about network marketing? Kristen can help! Drop your question here, and she just might answer it live on the podcast: https://Kristenboss.com/question
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Transcript for Episode #70: The LuLa Doc: Boss to Burnout Part One
Kristen Boss (00:00): Welcome to Purposeful Social Selling with Kristen Boss. I’m your host, Kristen Boss. I’m a mindset and business coach with more than 15 years experience in both the product and service based industry. I believe that social selling is the best business model for people wanting to make an impact while they make serious income. This is the podcast for the social seller, who is tired of feeling inauthentic in their business and desires to find a more purposeful and profitable way of growing their business. In today’s social media landscape. In this podcast, you will learn what it takes to grow a sustainable business through impactful and social marketing. It’s time to ditch the hustle and lead from the heart. Let me show you the new way. Hey bosses! Welcome to another week of the podcast. I’ve got something pretty special for you. This is going to be a two part episode.
Kristen Boss (00:55): I am unpacking the LuLaRich documentary that is on Amazon. I was thinking about it for quite a bit, and I really thought there was some valuable lessons for all of us from the documentary. And so what I am doing is I’m going to be breaking down observations and the valuable lessons for all of us, because if you’re listening to this podcast, you desire to elevate this industry with me. You see that it is a good business model and it provides opportunity for many families. And so my, my work, I believe my purpose is really shifting this industry for the better. And I am just so delighted to work with amazing people in my academy. And people that follow me on Instagram that I really feel are committed to this vision with me. So I’m going to be delivering these two episodes from that standpoint of really answering the question of how can we do better?
Kristen Boss (01:52): What’s our part in this and what is our lesson in this collectively as a whole, because this isn’t about one company, it is about the industry and there is a valuable, powerful lesson available for us. So I hope you’ll enjoy part one. I watched the LulaRich documentary on Amazon as a very, from a very curious place as a coach, just wanting to see what happened, what went on behind the scenes. And, and as always, just as a coach, I’m very mindful of who was telling the story. You know you have producers and editors and they are telling a storyline and there is a specific viewpoint happening there. So I was extremely mindful when I sat down to watch it that it’s like, you know, the people that are producing this direct this and guiding the storyline, are they for the business model or against the business model?
Kristen Boss (02:50): Or was it from a completely neutral place? I will say I don’t feel that the documentary was from a totally neutral place. I think it was had a slight leaning towards being against the industry. But I always think there is lessons to be learned. There’s always lessons available for us, especially from people who don’t agree with the model. I’m not talking about fighting them or changing their mind, but simply understanding where they are coming from and how we might be able to do better. That’s always a question I’m asking myself is what is the greater lesson and how can we do better and how can we elevate this industry in a better way? So my intention for this episode is to extract the really valuable lessons I saw that apply for everyone. This isn’t about just one company. While the story focuses on one company, there is something to say about how does this apply to everyone?
Kristen Boss (03:53): How does this apply to the industry as a whole? And what does this mean for the industry as a whole and what is the lessons we can learn and draw from here? Instead of, I think it’s very tempting to get into a lot of finger-pointing and kind of doing the blaming and shaming and saying, well, that company is terrible and that company is bad and the leaders are bad and blah, blah, blah, and have a narrative about like pointing fingers as to why that the company is the problem. And when we do that, when you’re pointing fingers at a company, it keeps you from learning to be objective and asking yourself, okay, but what is the lesson here for all of us? Where might we be playing a factor in this? How, how do we need to learn from this company’s experience and what are the lessons that are available?
Kristen Boss (04:43): And so I’m unpacking that in this episode this is going to be done from a place of deep love and compassion and neutrality. Actually, I’m not neutral. I’m totally biased towards the industry because I think it’s a great business model when done the right way done with ethical selling done with integrity and done with meaningful marketing. I really believe it’s a profound business model. That’s not going anywhere, but all that to say, you guys know that I talk a lot about leaving the hustle culture behind and just how damaging it can be. And I truly believe that the LuLaRich documentary is a lesson about the hustle, about the toxicity that comes when we buy into the glamour and the hype of hustle. And, and what’s interesting is like when I look at the years that this documentary focused on and like kind of the peak prime before everything imploded was 2016, 2017.
Kristen Boss (05:41): And I truly believe that was like the height of the hustle movement. It was the height of this message of women empowerment, mom, bosses, boss, ladies. It was just like this massive explosion. And while I think that’s great because it brought a ton of women into the workforce. There was a toxic message that started to bleed out from there. So we’re going to talk about that. And I’m going to tell you only the things that are really relevant that I think actually serve you. I will say a lot of the documentary really focused on the personalities of the founders, Mark and Deanne. I can’t remember their last name, but mark and DeAnn and how they built the company and just their interesting personalities and viewpoints. And I would say, you know, a large majority of the documentary was kind of just drawing attention to their decision-making that they were making as founders that was not helpful to the company.
Kristen Boss (06:46): And some I’m going to call like some big business mistakes they made at the corporate level as a business owner, we’re going to talk about that because we’re going to take this, these things that you see at a macro level like you’re seeing this happening with a multi-billion dollar company. Like it exploded in a very short period of time. It was insane. I think between 2015 and 2018, it became a multi multi-billion dollar company. Let me see. Oh yeah. And just four years, I’ll give you the stats because I wrote it down. I took notes. I was like, this is unprecedented growth in four years, the company grew by $70 million in four years. And it started in 2015. So the company saw absolutely explosive growth and growth is a really wonderful thing, but we’re going to talk about what healthy growth looks like, and while you were thinking, okay, yeah, but this is a corporation.
Kristen Boss (07:46): What does this look like? For me? The principles still apply on a Mac on a micro level with you owning your own business and having large teams and organizations. So I’m going to kind of just break it down into two main ideas that I saw coming up over and over again, and the documentary. I’m not going to sit here and talk about like what their comp plan is and if their comp plan is good or the structure of that, or, you know, or really go after that, because I don’t think that’s nearly as relevant. What I think is relevant is what is the overall message here and what is the lesson to be learned so that we all can do better so that when someone brings up this documentary to you and maybe you get really triggered by it, or you start to feel really insecure and you think, oh, no, they think something’s wrong with me.
Kristen Boss (08:35): They think they’re applying this one thing with this one company to all companies, what do I say? What do I do? Or maybe your belief feels a little shaken because this documentary came out. So I’m going to help kind of ground you recenter. You give you some really valuable lessons here that we all can learn from to better the industry and go further. Here’s the thing when we, and I was saying this earlier, when we blame and shame and we point, and we say that company is the problem. That company is the problem. And I see this happening just overall and social sign. I see a lot of like people kind of attacking other companies and saying like, well, that company is really bad. And that company is really good. And we have a system that’s way better than yours, and you don’t want to be at that company, that company over there.
Kristen Boss (09:21): And it creates a lot of my coach had a great term for it in the coaching industry. So I’m going to borrow it. She called it horizontal hostility. And I think that’s just a great term because when we are busy fighting each other and saying, you know, your company sucks, but your company’s XOM, our comp plan is better. And your comp plan is better. What happens is, is it ends up cheapening the industry. It actually ends up dividing the industry and it doesn’t elevate the industry because then it just looks like we’re fighting. People see that from the outside. And they’re like, wow, who can I trust? What is going on? So it doesn’t actually serve the industry when you’re sitting there kind of pointing the finger at the bad companies, the bad guys, and why you’re better. And I just think it’s interesting.
Kristen Boss (10:05): Like, I don’t think it looks good if you are having to put down other people and maybe this just isn’t in network marketing. Maybe it’s in coaching. If you have to put, put down your competition so you can feel like you’re getting further ahead. I feel like that is a low-value, low-quality way to do that. And I honestly think it cheapens you. I really do. I think I don’t as a consumer, when I see somebody putting down another company, I kind of just get a bad taste in my mouth. I’m like, well, that, that doesn’t look very good. That looks gross. So my goal for this, you know, this episode and talking about the documentary is not to sit here and point a finger at one company. And by the way, the company is still operable. It’s still a network marketing business, they’ve restructured things.
Kristen Boss (10:56): And there are many, many reps that are there. And so I have no desire to, you know, point fingers at the reps that are still there, or, you know, talk negatively about the owners. I mean, there are definitely some lessons there, but I really just watched the whole thing and thought, what is the greater lesson? How does this apply to everyone? How does this apply to every single company, every single comp plan, every single social seller? What is the lesson here? So what I noticed overall in the first four episodes is in the only four episodes, actually, you kind of get to know Deanne and Mark, the owners, you know, their backstory. And Deanne, really, she, she was, I’m gonna call it. She was a hustler. She, you know, figured out how to sell clothes from out of the back of her car for 27 years, she drove to all these cities and she would go and sell clothes directly.
Kristen Boss (11:52): It was like, she’d buy wholesale and then retail it and sell it to friends. And, you know, someone found out about these really cute skirts that she was making, it started in her garage. So she was making these cute skirts and it started with maxi skirts, which I think I was surprised by it. Cause I thought LuLaRoe was like the legging company, but actually started with maxi skirts. And it was really cute patterns and people- word was starting to get out like, oh my gosh, this really cute maxi. And this was also when social media really started to take off when social sellers took that to the online space and they were going live and talking about their makeup and their clothes. And so LuLaRoe kind of just happened to explode also at the same time when social media was exploding with social sellers as well, it was kind of like the emergence was, I’m going to say like 2013 to 2016, we’re like peak insane explosive years for network marketers that really took their product into the social media landscape.
Kristen Boss (12:58): It was new. It was exciting people weren’t used to it. And now the social landscape has changed. You have to actually go about it better. You have to be a lot more savvy. You have to add a lot more value online because in 2016 you could post, you know, a poorly lit photo of your dog with a picture of your favorite product next to your dog. And someone would send you a message and say, Hey, I really want to learn more about that product. But now a lot of people are selling online and that’s actually, it’s not a problem. It just means you need to be doing it better. And it needs to be higher quality selling from you. Our audience is very smart now and they’re very savvy. And when they are going online, they see like 20 other people selling the same product.
Kristen Boss (13:45): So now it’s all about people are purchasing more from someone, a personality than they are. Just like whoever they see posting. Let me give me an example. If they see 10 people selling the same product they’re going to buy from the person, they feel like they’re most aligned with that. There, they have a lot in common with someone that they really identify with their personality. This is why I think personality, branding, and PR showing up and speaking to a niche is really the best way to monetize your online platform. In fact, I know it is because this is what I teach my students and it’s what works. It’s what helps set you apart from everybody else. Who’s just posting a picture of their product and saying the same thing and talking about the same thing. So I was a little bit of a bunny trail, but just so that, you know, like some context here of when LuLaRoe started and they had, I mean, massive, massive growth along with the social media growth at the same time.
Kristen Boss (14:46): And so you get to know Mark and Deanne a little bit, and they’re a little, they’re a little quirky and, you know, Deanne she, someone comes to her and says, you know, I really want to sell these skirts. And she gives her a bulk of the clothing and, you know, at a wholesale rate and lets the girl go and make all the commission off the clothes. Now I want to give you a little backstory. I had a clothing boutique at one time. I, when I was in a salon, we had a bunch of space in the front of the store and we turned it into a cute little boutique. And I actually became a wholesale buyer. I went out and bought clothes and shopped clothes and styled them and put them on racks. And you know, that’s when I had to learn, okay, what are the profit margins and how much am I making per shirt?
Kristen Boss (15:32): And what’s the markup, what’s the industry standard. And first of all, I was shocked. Now I’m like, I’m never going to buy full price ever again, but I’ve done this. So all that to say, like buying retail and inventory, isn’t wrong. These girls went out and they purchased a bunch of inventory. And that’s what I did when I did a clothing boutique. It wasn’t in a network marketing business model, but I spent like $5,000. Me and my friend, we ran it together and we spent $5,000 for our first, you know order of clothes that we would sell because we were putting in inventory. It was like, that was our storefront. And that was the cost of the inventory. So, you know, a bunch of these reps, they were paying $5,000 for their start-up kits that paid for the inventory that they would sell and make commissions on.
Kristen Boss (16:22): I think it’s very easy to when I hear people say like, oh, well inventory, that’s a terrible thing. It’s only a terrible thing. If you are forced to continue to buy it and you’re not actually moving the inventory, but when you are moving the inventory, when you’re selling the inventory, yeah, it makes sense to keep buying inventory. But if, if there is a minimum inventory requirement and you cannot move inventory fast enough, that is when it becomes a slippery slope. And that is what started to happen towards the end of the series and what happened with some of the reps. But we’ll, we’ll, we’ll get to that. So, you know, that is how it started and word of mouth and social media just caused massive, I mean, massive explosive growth to the point where they had a waitlist for people onboarding into the company.
Kristen Boss (17:14): You know, that would be, I think they said like the waitlist was at least six to eight weeks long. Someone would want to sign up online and they’d wait six to eight weeks for a phone call from someone at corporate saying, Hey, congratulations, you’re officially a LuLaRoe rep and your inventory is coming in to get ready and style your Lula room. That was like the room that these women had in their homes, where they would have stylized wrecks and have their little pop-up boutique in their homes. And, you know, it was very sweet for me to see these women that were just so excited. They all said, and in the documentary,, they featured, I think, five to six women that they interviewed regularly throughout the documentary to get the viewpoints of their experience within the company. They interviewed a few of the women that were at the very, very top of the company and what their experiences were and then a few that were not in the top of the company and just contrasting their stories and what was going on there.
Kristen Boss (18:14): But I will say every single woman, when she decided she wanted to buy into the business, hello, $5,000 minimum. Can we pause for just a second and realize that when you are, when you have drama around the cost of your product, and most people they sell consumable products or their starter kits are like $500 at the absolute most I hear some companies have, you know, there’s a wide range, but I don’t really hear of these massive, massive $5,000 startup kits anymore. You don’t really hear that anymore. But I would say the average that I hear about as a coach with the hundreds and thousands of people that I coach, I would say the average is between two and $500 for a starter kit. And so many people get really in their head, like, no one can afford this. No one wants to buy this. No one, no one could go out and spend this kind of money.
Kristen Boss (19:14): And that I can’t ask this of people. And I just want you to hear that they had thousands of people on a waitlist who were excited and ready to spend $5,000 on clothing inventory so that they could start a business. So what creates this massive demand for all these women to say, I will totally. And it was interesting, like some of the women went to absolute extremes to go to come up with the money, to pay for the inventory. I guess, you know, some were selling their breast milk, some went and like broad money from family. I mean the, the breast milk was like the most extreme one. Some were like selling furniture and I get it. I have sold things to start things I understand, but I’m like, oh man, breast milk. That that’s just crazy. So, you know, you have this massive, massive demand of people that were wanting to join this business and were excited to do it.
Kristen Boss (20:14): They were excited to have a pop-up clothing boutique in their home. And when they were interviewing the six, like key women throughout the documentary, what every single woman said, every single one, every single one when they were interviewed and asked, why did you do this? Every single one said because I wanted to be home with my kids and the idea of making money while I was home with my kids was a dream come true. It’s all I wanted. And that truly is probably 80% of the network. The marketing demographic are stay-at-home moms who desire to make income at home while still being home with their kids. These women all said, this is totally what I want. I’m excited to do this. And I, they all said, I want to be home with my kids. This is what is most important to me. It was a dream.
Kristen Boss (21:11): I think all of them said some rendition of it’s a dream come true. And I really do think like that is why this business model, I believe is one of the most lucrative business models out there because it really does meet the average, stay at home mom where she’s at and allows her to make money from home, make part-time money from home, relatively easy with a very low barrier of entry. Now I do think it’s really important to bring up this part of the documentary because I do think it’s a conversation that we need to have. There were two women, they interviewed one woman’s name was LaShae. And I thought she was hilarious and I loved her. She was on the onboarding team and, she would be the people to one of the people to call someone on the waitlist and onboard them to starting their business.
Kristen Boss (22:05): And she saw how much money these women were making. And she finally was like, I don’t want to work for corporate. I want a piece of the pie. And I want to be a rep. I want to start my own startup pop-up shop. And she did great. She was successful and, you know, but she said something that I found very interesting. And I’ll tell you what it is in a second, but I also want to talk about another woman. Her name was Jill and I believe she still is with LuLaRoe and she’s having success. She is a Latina woman and she was both of these women said and there was an expert that came onto and I say this because I do believe this is a lesson we need to talk about and something we need to learn collectively in this industry.
Kristen Boss (22:53): And what one of the experts said is that this idea of being a stay-at-home mom and staying home with your kids and building your business from home tends to be touted as the white woman’s dream. It is the white American dream, and it tends to be very racially coded. And I thought that was fascinating because that is something I see as a coach and just being like, why is this a predominantly, like so many white women are drawn to this business model and Jill, one of the gals that they interviewed she’s Latina. She was the one that said, she said, you know, I stick out like a sore thumb. This is totally a white woman’s business. And I think that’s something that is worth exploring and having a conversation about and asking, why is that true? Why is it that she sticks out like a sore thumb?
Kristen Boss (23:45): Is it about our messaging and our marketing that speaks mostly to white women? And then LaShae, you know, she won a huge prize and you know, they had a cruise, you know, they earn a cruise and she earned her cruise, but she decided she’s like, I want to go. And she was so sweet about it, but she said, you know, I was just really uncomfortable being out on a boat with all white people and just me kind of by myself, like she and I felt, and she immediately kind of like also felt to add on top of it. She’s like, I love white people. I love white people, but, and I don’t think she had to say that, but the fact that she felt uncomfortable and she didn’t want to go on her trip, it just shows like, okay, so why, why is this the case with minorities?
Kristen Boss (24:32): Why is that the case with women of color? Why did they feel that way? What is, what is going on with the message? And it is because, you know, the stay-at-home mom making money from home tends to be you know, a very white woman vision. And this is, I’m not going to sit here and say, I’ve done all my work about this. This is something I am actively doing work on and I’m still learning. And I’ve been interviewing people on this exact topic, but I really felt it was important to at least share that on this episode and share those two women share their viewpoints because they deserve to be heard. They deserve for us to hear their viewpoints and how they, how they feel that they feel alone, that they, that the LaShae didn’t feel safe enough to be on a cruise ship being herself.
Kristen Boss (25:21): And so I just felt like it would be a massive disservice to their stories and their interviews. If I didn’t at least bring it up on this episode and share like, Hey, you know what that part of the episode really caused me to pause. And I thought, Hmm, that is really interesting. So it is this idea, and this is what brought everybody on is like, I want to make money from home. I want to be present with my children. I want to be present with my family. And one of the core values or the mantra of the company, they said it was, I think they said strengthening families and changing lives. That is what the company does. And it does feel good to say, I want to, you know, strengthen families and change lives. This like all the messaging was great in the beginning. Like, of course I want to stay home with my children and this is amazing.
Kristen Boss (26:11): This is exciting. And then it slowly kind of started to shift as it, as the business exploded and decisions were made at the corporate level. And what was happening was they couldn’t onboard people like fast enough, like there was just an overdemand for people joining the company. And what was happening was that the corporate level, they were trying to keep up with the demand of how many people were onboarding each week. And the lesson from that was, it kind of just became this massive like explosion. And what I saw was what I’m going to call reactive growth within the company where it looked like the owners, the founders, and corporate was always falling behind and trying to catch up to what was happening in the front end of their business, all the recruiting, everybody coming on. But what was happening was they did not slow down strategically to put really important systems in place to make sure that the company could handle explosive growth.
Kristen Boss (27:22): And this is what I say, this is what I tell this is like, that’s the macro picture at the corporate level? The micro picture is when I bring this down to my six figure earners that I coach are people that have like very big businesses. I say, you know what? You have to take the time to slow down to ensure that you have systems in place that can handle when your team goes out and decides to recruit 500 people. Do you have systems in place where those 500 people are going to have a quality experience? They’re not going to fall through the cracks. They’re going to know what needs to be done. They get plugged in certain areas and that they can be set up for success. If not, you have to slow down and actually put those systems in place. Here’s why, so everybody was wanting in on this.
Kristen Boss (28:06): Everybody was wanting in on this business and these leggings, and it’s great because all these moms are like, I want to be home. I want to make money. And that is the number one reason why people join this business model and this business model, it totally works. But where things started to fall apart was that the owners didn’t take the time to strategically slow down and work on systems. And, you know, they made some decisions. They hired family members to work for them who had zero corporate experience who had zero experience running multi-million or billion-dollar companies. So their infrastructure could not support everything that was coming in. And so that, that was like the mess on the backend and what I tell people, I’m like, you know, if you aren’t willing to slow down at some point in your business to work on your systems, you will be forced to slow down because things have imploded for you. And that is exactly what happened. Eventually, it completely imploded. Hey bosses, that’s it for part one, we will see you back here next week for part two of the special two-part episode. We’ll see you then.
Kristen Boss (29:24): That wraps up today’s episode. Hey, if you love today’s show, I would love for you to take a minute and give a rating with a review. If you desire to elevate the social selling industry, that means we need more people listening to this message so that they can know it can be done a different way. And if you’re ready to join me, it’s time for you to step into the Social Selling Academy, where I give you all the tools, training, and support to help you realize your goals. In the academy, you get weekly live coaching so that you are never lost or stuck in confusion. Whether you are new in the business or been in the industry for a while, this is the premier coaching program for the modern network marketer. Go to www.thesocialsellingacademy.com to learn more.