"The Next Trillion: An Interview with Paul Zane Pilzer," by John Milton Fogg, Network Marketing Lifestyles Magazine, September 2001.

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More on
The Next Trillion:

Why the wellness industry will exceed the $1 trillion health care (sickness) industry in the next ten years.

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NML: How did your observations about wealth and distribution get network marketers' attention?

I did three shows on "Larry King Live" that year. I was explaining the book on one of those shows; a man named Donald Held happened to be watching. Don, a Senior Executive Diamond with Amway, brought the show to Dexter Yager's attention. Dexter and a number of his people read the book and said, "Hey, here's an economic analysis of why our business works. This guy has no idea what network marketing is--but he knows why it works!"

I had no idea what Amway was. I didn't even know what network marketing was. I wasn't trying to promote anything; perhaps that's one reason my research rang true. I was just using empirical data, analyzing distribution in America and the world.

Dexter's people decided to book me as a speaker and have me explain to their people what I'd said on "Larry King Live." That's how it all started.

NML: That was over a decade ago, and you've since become a household word to thinking network marketers everywhere. Obviously, your thinking hasn't stood still; what has happened in the ten years since?

I've changed my focus a good deal. Back in 1990, the opportunities still lay in physically distributing products; since 1990 we've seen a dramatic shift. In my new book, The Next Trillion, I break distribution into two functions: physical and intellectual.

Physical distribution means getting the product to the consumer--products that the consumer already knows he wants. That's Walmart: You know exactly what you want when you walk into Walmart; you go in, pick it up, and get out of the store. You don't learn about anything new there.

Intellectual distribution is where you learn about a new product or service that you didn't know existed before.

Up through 1990, the great opportunities to earn fortunes in distribution, the opportunities for the Fred Smiths, Ross Perots, and Sam Waltons were in physical distribution. Today, the great opportunities are in intellectual distribution.

NML: For example...?

In 1999, a business person made Time magazine's man of the year--especially meaningful because it's quite rare for a business person to earn that distinction. Who was it? Jeff Bezos, who revolutionized the distribution of books with amazon.com.

Now, look closer: Jeff Bezos is really in the intellectual distribution business. You don't sign on to amazon.com just to physically get the book; you sign on to learn about the book. You read the various reviews, look at other books in the category, you may even log on to find out if there even is a book on the particular topic you want.

Because that is precisely where the biggest bottleneck is today. There was a time when the two aspects of distribution--physical and intellectual--were commonly combined under the same roof. No longer.  If you're as old as I am, you might remember the first few times you went into a store and said to yourself, "Hey, I know more about this product than the clerk selling it!" Twenty-five years ago, that was a shock: who would think of opening a store where the clerk didn't

Today, it's universally accepted. Today, you the consumer are expected to know about the product. There are a few specialty retailers left, such as Nordstrom's. But in general, the retailers have completely abandoned the traditional function of teaching people about products. Instead, they have focused on the function of efficiently and inexpensively delivering the product.

Go into a showroom and talk to a car salesman: does that salesperson actually own the car you're talking about? Not likely. Go into an electronics outlet: how often will you meet a salesperson who actually owns the particular product you're considering--or who can even afford to? Seldom. These people are in the business of showing you where to find it on the shelf; they're not there to teach you what it is.

NML: So, where do we learn today?

That's the problem. The pace of technological change is rapidly accelerating today, no matter what the industry. By the time you learn about a product and are ready to buy it--guess what? There's a better one! Where do you learn about that one? Nowhere--that's what is missing, that's the bottleneck in our economy. Talk to any manufacturer and he'll tell you, "We're selling models A, B, C and D; the new model, F, is seven times better, it's even better priced--but nobody's buying it yet!" Why aren't they? Because they haven't learned about it yet. They call this "backlog."

I saw this with some educational software we developed in the early 90s: here was a product that could totally change a child's life--but telling people about it was far more expensive than producing it. Until we found the Amway Corporation in the mid-90s, we were pretty much dead in the water: we had great new products, but no way of telling the consumer that they existed.

NML: How does network marketing's way of doing that contrast with more conventional ways of marketing--through advertising and other mass channels?

Network marketing today is almost wholly intellectual distribution. When you as a network marketer discuss a product with a consumer, you don't actually hand over the product. You rely on UPS or some other delivery service to have the product shipped to your consumer.

Even more fascinating is that network marketing today is typically done person-to-person by someone who is also a user of the product. Unlike the car salesman, electronics salesman, or clothing salesperson, the network marketer is an educated, enthusiastic, experienced user of the product you're asking about.

Those companies that prosper in network marketing will focus almost entirely on intellectual distribution, teaching people about new products and services that will improve their lives. Those that really flourish will have some sort of unique or proprietary technology. And not just unique, but efficacious--better than anything else out there.

NML: So you've seen the weight of opportunity shift from manufacturing, to physical distribution, and now to intellectual distribution. How else has your own thinking changed? What is the focus of The Next Trillion?

I started to focus on the great needs of America--which led me in some surprising directions. People think of their needs in a very mundane way--"I need a new dress that doesn't make me look overweight," or "I need a car that gets better mileage." I looked at it on a more macro level: we have more fundamental needs, such as eating, sleeping, being healthy, being educated. As I carefully studied current conditions, I found that the greatest need in America today is wellness.

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