(Doug Wead interview continues.)

What is a revolving door company?
They are companies where you have to constantly sponsor new people because the old ones are dropping out. It makes it hard to build a residual income.  This happens some in all networking but some are worse than others.

And why does this happen?
Usually because of the compensation plan.  Distributors cannot quickly earn enough money to live on so they drop out. 

Sometimes the money is at the top. No one except a very few are making anything.  The others are living on hope.  I have a friend in XanGo who spent many years in another company and made no money at all.  He finally left and went to dozens of different companies and failed at each one.  When he got into XanGo he made it to 200K.  (The average 200k earns $47,000 a month.)  Because the money was within reach.

Is it ever the other way around?  Do some compensation plans make it too easy?
 Yes, sometimes, but not very often.  And none of them are in Russia.  Some think XanGo makes it too easy.

While I was considering a new company the founders of eight different companies personally approached me, taking me out to dinner, making their presentation.  And one very chastised and humble network founder told me that his company was failing because they had moved the bonuses all to the front.

That's a novelty?
Yes.  Actually, I was very impressed with this man because he cared about his distributors and was trying to find a way to help them succeed.

So why didn't it work?
He said his people could easily make $500 a month but they could only double that with great difficulty.  His people were dropping out because in the USA, you cannot live on that amount of money.

As one of my friends explained, a networking business needs a vast “middle class,” like Europe and the United States, with many who quickly earn enough to justify doing it full time, a strong base from which to launch higher.

And why?
Because if you are making enough money to live off of your business you won’t drop out.  So it is good for the company but it is also good for you.  If you can help people get to a good income quickly then you will keep the people you have and you can build a bigger and bigger business that can provide residual income. 

Which was the whole original idea of networking.