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7. Why LightYear’s Explosion Is Similar To (But Different Than) Excel Telecom’s

Make A Fortune In Wireless Gold Rush

Does LightYear = Excel Telecom?


7.  Why LightYear’s Explosion Is Similar To (But Different Than) Excel Telecom’s

We have several serious networkers working with our team., some of them cloaked because they don’t want to abandon previous incomes.  The word is starting to get out about what a difference it is to save people money on a bill they already pay, vs. trying to jam people with a new, expensive item to squeeze into their monthly budget.  It’s so satisfying to see a new business turn the corner from “I hope it happens” to serious income.  The company is still only doing around $5 million/month, which is chicken-feed if they’re growing to $100 million/month.

EXCEL TELECOM SIMILARITIES/DIFFERENCES
A good number of networkers may be familiar with the Excel Telecom story from the 1990s.  Some people worry that LightYear is too similar to Excel, that the margins in wireless will quickly vanish and the business success will be short-lived.  Here’s the truth:

  • Excel reduced landline fone long distance rates, which eventually descended to nearly zero (flat-lining around $25/month, which is bare-bones compared to the hundreds of dollars per month we all used to pay).
  • The majority of people eventually switched their long distance dialing to wireless fones, which didn’t charge long distance rates.  This effectively eliminated the long distance market as a revenue generator.
  • So for the Excel situation to compare to LightYear’s, that would require the wireless fone to be replaced by something, or companies to drop pricing to near zero.  Not only is that unlikely (as we’re all getting more and more attached to our wireless fones), but the big picture is that wireless fones are on the verge of REPLACING a popular and necessary device, the desktop computer.

As the home computer is used less and less, data demand will skyrocket as we switch our internet use and computing needs to the wireless fone for convenience.  The smartphone revolution won’t replace JUST the computer, tho:  conquered devices quickly being added to the list are the camera, GPS, mp3 player, and TV.  This is creating even more dependency on the smartphone, and subsequently more revenue for the wireless industry.  Look at future data use projections for the wireless industry:  “Smartphones Soar as Desktop PCs Flatline.”  That’s a prediction of an absolute explosion over the next five years.  (Also see “Smartphone shipments to surge 55% this year.”)

Not only that, but advertising will switch almost completely to the internet and to interactive, 2way communication methods, opening up another huge revenue stream for companies who control the “screen real estate” of smartphones.  This is an area that has barely even started, just as cell fones were barely a reality as landline long distance prices plunged.

Knowing these trends, it’s logical to then look at the division of users in the wireless market:

  1. Those who just want to be able to talk;
  2. Those who have smartphones for using the internet anywhere they go.

Yes, the cost for talking has trended down, as we can clearly see, but the cost for data (internet use) is going up, as AT&T and Verizon recently increased the cost of data usage (also see this).  Verizon’s CFO predicted “smartphone users, which currently make up about 17 percent of the carrier’s user base, will make up 70 percent to 80 percent of its base ‘over time.’.”  We can observe the different focus of prepaid companies by looking at the fones they offer and the pricing plans they have:  most of the prepaid services offer non-smartphones or fones with weak internet capabilities.  The internet is full of complaints from people who buy a cheap prepaid fone and then wonder why their “unlimited everything” internet service is slow and/or terrible.  LightYear users don’t have that problem – we have full data fones and service, with no limitations.  You may pay $5 or $10 more per month for our service than another “unlimited everything” service at $45 or $50/month, but our service will be dramatically better.

So the “lack of margin” issue should be resolved, since LightYear offers free service (a $60 credit every month) to customers who refer 5 others (as long as those 5 pay their bill every month), while still paying reps the same commissions on top of giving the referring customer free service .  There’s plenty of money here!

And the competition issue is handled, as we offer nearly the same price as retailers ($59.99/month, with the first month free, making it $55/month over a year), for much better quality and no fine-print gotcha nonsense, with true “unlimited everything” service; in fact, the competition is freaked out because of our ability to offer customers free wireless service, which they probably can’t and won’t offer.

The following two sections are from my July 30, 2010 blog post – they’re critical parts of the story.

THE EXCEL TELECOM STORY:  $1 BILLION IN ANNUAL REVENUE, $1 MILLION MONTHLY COMMISSION CHECKS
Excel Telecom in 7 years went from startup to $1 billion in annual revenue and was the only networking company to pay a rep $1 million/month in commissions.  See it with your own eyes in the January/February 2007 issue of “Millionaire Blueprint” magazine (downloadable PDF), where the cover calls Paul Orberson “Excelʼs ‘Million-Dollar-A-Month’ man” and Orberson himself is quoted, “I made over a million dollars a month for several months.”  (You have to endure his promotion of his current company, FHTM, which is a business that has long since run its course ($10 million/month in revenue after 10 years in business), and is facing some serious legal problems.  But Orberson’s poor-to-rich story is fascinating, unique, and inspiring.)  Also, you’ll find third-party validation of Excel’s revenue in the summary of the book, “The Excel Phenomenon: The Astonishing Success Story of the Fastest-Growing Communications Company–and What It Means to You.”

Why is Excel’s accomplishment significant?  Because they did it by getting existing customers of other companies to switch to Excel’s long distance, and it was all about saving people money on a bill they already paid.  Does that sound familiar?  Yes, that’s LightYear’s same strategy, but it’s for wireless cell fones, not long distance.  There’s serious margin and income here, so all we have to do is flip’m.

If you poke around online, you’ll see a lot of trash about Excel going bankrupt (in 2004, after going public, the owner basically ditched the rep force and took some other unsavory actions) and how very few people made money, but that’s all griping after the fact.  When Excel was rockin’, no one was complaining – I know because I was constantly getting prospected, but I was at my highest income with Nu Skin when Excel was peaking, so I wasn’t interested at the time.  Another pertinent point is that the owner of Excel basically sold the company to cash out, possibly because he saw the end of long distance nearing, even though he probably knew the rep force would get demolished in the process.  The ownership of LightYear actually loves his rep force and wants to help people, not crush them as he takes the money and runs.

HOW MANY MILLIONAIRES ARE PRODUCED BY STARTUP-TO-$BILLION ANNUAL REVENUE GROWTH?
I don’t have data for Excel, but I do for Nu Skin (NS), again, because I was there (my own story was in the Nu Skin mag. back in Sep. 2003 (PDF, page 18)), and also because they publish their income stats.  Over a 10-year period, 1988-1998, NS revenue went from $5 million/month to almost $100 million/month, and in the process created 600+ people who earned $1 million.  Each year now, NS does over $1 billion in revenue.  Its “25 Years of Celebrating Millionaires” 25th anniversary brochure (PDF) says on page 3, first sentence of second paragraph, “To date, Nu Skin has made over 600 millionaires globally …”  The point is that Excel didn’t reach $1 billion in revenue and NOT create hundreds of millionaires.  And continuing that theme, if (when) LightYear reaches $1 billion in revenue, they, too, will create hundreds of millionaires.

Position in front of the revolution BEFORE everyone knows about it!


EXCEL’S COMMISSIONS COMPARED TO LIGHTYEAR’S

This is a quick way to visualize how much more money is in LightYear than there was with Excel, which set the record for fastest NM company to grow to a billion dollars in annual revenue.  Excel didn’t do that without paying reps a lot of money, obviously.  (For more about Excel’s story, see my blog post, https://antipaper.wordpress.com/2010/07/30/lightyear-the-next-billion-dollar-mlm-telecomm-company/ – halfway down the page.)

If you want to see just how great LightYear’s commissions are, look at these Excel commission numbers on the left (from Ben Sturtevant, who worked Excel for 6.5 years), compared to LightYear on the right (and I added ACN’s current numbers, for another dramatic comparison; Excel Telecom ended its network marketing operation in 2004, while ACN rolls on today):

Excel Commission On: ACN LightYear
2.00% Personal Customers 1% – 10% 1% – 10%
0.25% Level 1 0.25% 1%-4%
0.25% Level 2 0.25% 1%-4%
0.25% Level 3 0.25% 1%-4%
0.25% Level 4 0.50% 1%-4%
0.25% Level 5 3.00% 1%-4%
1.00% Level 6 5.00% 1%-4%
5.00% Level 7 8.00% 1%-4%
0.00% Level 8 0.00% 1%-4%

Ben told me, “Yes, that’s 1/4 of 1% on levels 1-5.”  He also said, “There was no residual paid past the 7th level, ever.  There was also no dynamic compression in Excel.  I had a team of 3,480 reps in Excel and I was making $300 a month in residual.  If I plug in the same volume and rep distribution I had in Excel into LightYear’s comp plan I would have been making over $10,000 a month in residual.”  (If you’re not familiar with the beauty of compression, it’s simply removing people who quit or went inactive, thereby compressing levels, so commissions flow on 8 levels of active reps.)

JFTR (just for the record), the ACN commissions above are on residential landline telecom; on wireless service, ACN pays a “fixed amount based on the plan.”

With LightYear, on personal customers we’re getting 1-10%, and on downline we get at least 1% (with a max of 4%), down 8 compressed levels.  For starters, that’s a minimum of 4 times the 0.25% Excel paid on the first 5 levels.  If you make the max 4%, that’s 16 times the 0.25% Excel paid on the first 5 levels!  If you understand the power of exponential growth (not even considering compression, which is another monster multiplier), payment on the 8th level alone is worth more than the other 7 levels combined.  See the chart below for an example.

From LightYear’s official compensation plan:
____________________________________________________________

“Override 8 Compressed Levels Commissions:
Earn 1% to 4% on 8 compressed levels of customers in your organization.

“You must be a Senior Manager or above with 10 active PCPs to receive residual on your compressed levels.
10 active PCPs = 1%
SM or above with 15 active PCPs and $1,000 in monthly CABs = 2%
SM or above with 20 active PCPs and $2,500 in monthly CABs = 3%
SM or above with 20 active PCPs and $4,000 in monthly CABs = 4%”
____________________________________________________________

That $4,000 in monthly CABs (customer acquisition bonuses) is simply making $1,000/week from setting up new online store owners and customers, which is 10 reps @ $100 each, which is what you should earn as a VP.  So it’s clear to me that after you reach VP (by getting 75 downline reps), you’re toast.  You likely reach the 4% max residual payout from then on, so really levels 4 thru 8 are a lock to pay at 4%.

There are a couple other rules and exceptions, but they’re minor.  See the company compensation plan for specifics, but this is all you need to understand how much money there is here.

HYPOTHETICAL PAYOUT COMPARISON
For easy comparison to the Excel numbers above, the chart looks like this:

Excel Commission On: LightYear Rep Growth* LY Cell Income^ Excel Income~
2.00% Personal Customers 1%-10% 3 $1 $3.00
0.25% Level 1 1%-4% 9 $4 $1.13
0.25% Level 2 1%-4% 27 $13 $3.38
0.25% Level 3 1%-4% 81 $40 $10.13
0.25% Level 4 1%-4% 243 $121 $30.38
0.25% Level 5 4.00%@ 729 $1458 $91.13
1.00% Level 6 4.00%@ 2187 $4374 $1093.50
5.00% Level 7 4.00%@ 6561 $13122 $16402.50
0.00% Level 8 4.00%@ 19683 $39366 $0.00
Totals: 29523 $58,499.00 $17,635.15

* Potential “Rep Growth” is based on simple 3×3 compounding; this could be reps or customers (payout is basically the same).
^ Resulting LightYear monthly “Cell Income” is calculated using the lowest possible commission, 1%, and multiplying each rep by $0.50 (which is 1% of a $50 monthly bill), rounded down to the nearest dollar.
~ Resulting monthly “Excel Income” on landline usage, multiplying each rep by the listed percentages on the far left taken from a $50 monthly bill); for example, 3 reps at $50/month = $150, times 2% = $3.00.
@ On the last four levels, it’s almost guaranteed that the percentage will be 4%, based on what’s required to reach that pay:  getting that many reps downline assures the volume will be high enough to qualify for the max commission.

DO YOU HAVE AN ACTION PLAN?  IF NOT, CALL ME!
A superstar networker friend of mine recently emailed me the following wisdom:


“Marketing is what makes business happen.  Let me ask you something:  if you have the greatest product in the world and no one knows about it, are you going to make any money?

Nope.  Pretty simple isn’t it?

Yet what baffles me is how people say, ‘Man, I really want to make $10,000 a month in residual income – I’m going to do it!’  Then 3 weeks later they quit because they talked to 4 people and everyone said no. Somehow they lost all their goals, hopes, and dreams of creating wealth for themselves.”


What they’re really missing is a consistent plan of action to generate business.  I’ve been helping people do this for 20 years.  Spend 20 minutes on the fone with me and see what happens.  I’d love to help you succeed!


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