Chapter 5: Now that s Leverage

Overview

Be fruitful and multiply.

Genesis 1:28

If you want to make a lot of money, sell Tupperware. You know, those plastic storage containers that seal in freshness and fill your fridge with scads of hopelessly unlabeled pastel bowls. The next time you wish you had another six feet of kitchen cabinets, consider how the universal appeal of these containers has made them a household fixture. Everyone has at least one Tupperware container tucked away somewhere.

Individual dealers sell Tupperware products via the "party plan:" They stage informal gatherings at the homes of people who sponsor them in return for a nominal share of the proceeds. Sponsors stay busy at these parties, giving product demonstrations, offering hints and tips, taking orders. It's hard work. A few of them even make a little money at it.

My aunt sold almost a million dollars' worth of Tupperware products one year.

When I heard this, my first thought was, "That's a lot of bowls!" After getting used to the idea that we would soon have a new millionaire in the family, I started wondering how she had done it. She was just a regular person. You know, one of the family. Hardly the type you would expect to be well on her way to riches.

I knew she had worked very hard, continually soaring to new heights with her seemingly limitless energy. Everywhere she went, she would talk up a storm about how good Tupperware products were. Sometimes she would visit our house while on vacation and she would toil very late, catching up on her business paperwork.

Still, for all her grueling determination, it just didn't fit. The math simply did not work out. Suppose that a bowl sold for an average price of $7. To sell a million dollars worth would require selling 142,858 of them. If you assume that she worked six days a week for fifty weeks, then she would have to have sold 477 bowls a day.

Now, my aunt is a terrific salesperson. Her sales prowess is legendary. If it can be sold, she can offer it to you and you will buy it. But 477 bowls a day, every day (except Sunday), was more than I thought even she could do. After all, one has to rest occasionally. Besides she was raising a family at the time.

So one day I pulled her aside and asked her how she sold a million dollars' worth of Tupperware products in one year. Her reply? "Silly! I didn't sell all those bowls. I got someone to sell them for me!"

She explained that she started out selling Tupperware at home parties on weeknights. On a good week, she figured, she could do five parties and sell between $100 and $150 worth at each. Eventually she realized that, while she was a fine plastics peddler, there were only so many hours in the week in which to peddle. So she found twenty other people and sold them on the idea of selling Tupperware. Each of them would hold five parties weekly, making a total of one hundred a week between them. She would sell her bowls to those twenty people for a small profit from each. It wasn't long before those twenty people understood the value of "pyramiding" themselves. Soon some had twenty people selling bowls for each of them.

The rest is multilevel marketing history.

Then my aunt shared a potent bit of wisdom: No matter how bright, energetic, or aggressive you are, there is only so much of you to go around. If you want to be fantastically successful, then you must multiply your effect on the world. It's not enough to have a high IQ or the ability to sell winter parkas in Hawaii. You need to set enterprises in motion that distribute and enhance the impact of your talents and abilities. For every hour of your labor, expect a yield of five, a hundred, or even a thousand times your efforts.

The key word here is leverage. Like the lever and fulcrum you studied in high school physics class, any movement at one end of the lever is experienced at the other end. If the fulcrum is placed in the exact center of the lever, a one-to-one correspondence exists between the opposite ends of the lever. If one end moves up five units, then the other end goes down by five units. However, if you stand at one end of the lever and place the fulcrum close to you, a small movement at your end can effect a much larger motion at the opposite end. The trick, then, is to find a way to move the fulcrum closer to you in an endeavor. In other words, you want a one-inch move on your end of the lever to send the other end halfway to the moon.

One reason for the growing success of Unix is its ability to help the leveraging efforts of individuals. This didn't just happen as a matter of chance. It came about by way of cooperative design by dozens and later hundreds of programmers. They recognized that they could only do so much by themselves. But if they could multiply their effects, they could take advantage of software leverage.