#152 - Morgan Styler | Rethinking Capitalism with Circular Wealth

0:00 All right, guys. Hey, welcome back to another episode of the necessary entrepreneur. We just had a conversation, um, off screen that talked about, we're just starting to become more valuable and, beneficial to everybody listening. So today I'm pumped to invite, uh, Morgan Styler. I'm excited about this conversation. We talked about 10 minutes off camera about network marketing, influencer marketing. He's going to weigh some other things on top of it, but I'm pumped because he co-founded a company called circular wealth. The first time we've had someone on. with a different approach to this type of business. And whether I agree or disagree, that's not the point today. The point is to vet his company out what they're doing and to find the passion.

0:58 You're empowering people with a new economic model called circular wealth. Man, Morgan, welcome to the party of entrepreneurship in the conversation today. Hey, Mark, it's great. Great to be here. I got a chance to watch some of your podcasts and you do a really good job. not yet. You're helping us get there. so we're pumped about the conversation today, but tell us where you've been in this so-called network marketing for 20 and 30 years. You must've learned a lot of things that you didn't like, but also some great valuable insights that you learned about self-development. But where did this idea from this new company about circular wealth, where did this, uh, where'd this come from? It was actually the whole three decades that I've been in the industry.

1:41 I saw what really works and I believe we grow as human beings or interaction with other human beings. And that's the beauty of network marketing and sales is you interact with a lot of human beings. The problem like we were sharing off screen is that there is uh a uh facade that is promoted as this is what you can do. And yeah, you could do it, but it's like saying, yeah, you could run a four minute mile, but Very few people in the world have the genetics or the drive to do that. And that's where I think sales and network marketing direct sales has really been a disservice because we promote something that isn't real. And a lot of people have been burned by that.

2:21 So where's your passion come from? What's this new company circular wealth? Like what problem in the marketplace is it going to serve or what brand new idea do you think this is? Yeah. So it really came, I, I've co-founded two companies that have done over $2 billion in sales. So I've seen what works and I got so frustrated with the current models. actually lived off grid for seven years and I just watched how natural ecosystems work and currency comes from the root word of current. It's supposed to move our money's supposed to move, but our systems just go from the bottom to the top and it ends up becoming a hierarchy or a pyramid. and the wealth gets hoarded to a very few hands.

3:04 So I thought, what if we could make an economic system that mirrors the regenerative cycles of a natural ecosystem? And I started thinking about that and designing algorithms and developing it. And we created something that really does that, where if nature worked like a linear economic system, everything would fall apart. If the clouds held onto the rain thinking, I'm not going to let this go because it may never come back. everything would fall apart. That's how our economy is working right now. So we created circular wealth to solve the issues that we saw in the marketplace. So what's this look like? Like, are we going to have a conversation around um Marxism and communism?

3:47 I mean, right. I'm just throwing it out there because a lot of people are going to see. So, so what are we, what are we talking about here? mean, we talking about redistribution? No, no, no. This is capitalism with compassion. And what I mean is it's a very capitalist model. I believe in capitalism. I think it's been twisted because few people with so much money have adjusted the tax laws, adjusted the politics, where capitalism isn't a currency anymore. It's an accumulation. what I am really passionate about is I want to create a system Anya, go deep into this.

4:29 I don't want to interrupt you. into that. Absolutely, because every big event that I ever went to in direct sales, people were on stage going, this is my Lamborghini, this is my yacht, this is what I did. And yeah, that's sexy in a way. But I think it's a very small part of the human spirit that gets motivated by that. think we really, as humans, we get inspired by doing something that we really believe in at a deep level and improving other people's lives and feeling like we're making a positive contribution to the world. The problem is I think most people don't give a hundred percent at their job because they feel they've made a Faustian bar bargain with the devil where they're trading their time for dollars.

5:13 No matter what they produce, they're not going to get the back, the value they add to the company. So what we thought, what if we create an economic model where you're treated like an owner and a partner where you actually get equity in the platform. You're not just a commissioned salesperson. And this really came from an experience that I had. I was president of a company called Income Net Communications. And when I joined them, they were losing 30,000 customers a month. We came in with a new sales model. I brought out a bunch of salespeople. We blew things up. After 18 months, they were gaining 5,000 customers a month. So that's a big turnaround. And I'll never forget this moment because I was actually walking to go up on stage.

5:57 There were about a thousand people in the audience. And we had this room called the fish bowl because it was all glass. And the owner of the company was sitting there and I was walking by and he goes like this. And I don't know what it was, but my heart just sank. I didn't know. And I walked in there and he goes, we're shutting your division down. And I go, what are you talking about? Our division's what's driving all the growth. says, no, we're shutting down. You got to go up on stage right now and tell. everybody, your division is shut down. All the commissions stopped today. Everything is done. And it was one of the hardest things I ever did in my life. My gut was just painful. the painful lesson that I learned from that is there was a clause in the contract because all these people were working so hard because they got a residual income from the phone service, the internet service and all that stuff.

6:40 But there was a clause that they ever shut down the sales division. All those commissions stopped. So the owner shut it down, sold the company. He made a fortune and all my thousands of salespeople got screwed because they had no equity, they had no power, they had no control. So we wanted to create something where salespeople aren't treated like disposable assets, they're treated like owners. How do we operate a profitable? this way. And I know we're gonna make some arguments and stuff but if because because here's my experience and I'll give some context that's a big question. We want, we like this idea of democracy.

7:20 We like it. But man, our country's having a tough problem with it right now. And it seems like to me, We've lost shared meaning. But if we really sat down and had some conversations on the things that were really important, we may establish that we do have a shared meaning again. Maybe, I'm not saying, maybe. You can't have a company and correct me if I'm wrong, from your opinion, you can't have a company where 50 % of the company fundamentally believes the company's purpose is this.

8:03 And then another 50 % of the company believes it's this and they're pulling away from each other every day. Absolutely not. And that's one of the biggest challenges because companies often say things in their brochures and their marketing materials. But I've always believed that I don't care what a company says, look at their compensation model and you'll know the culture that they're gonna create. Charlie Munger said, show me the comp and the incentive. I'll show you the outcome. Exactly. That's the key. So what we did, my partner and I, and I was so fortunate to meet Mario because ah he's the CoCo founder. He lives in Croatia, incredibly successful entrepreneur.

8:45 He built a huge company, sold that to Walgreens. He doesn't need to work another day in his life. But when I showed him this concept, he got so excited. He's like, Morgan, we could really shift the way things are done if we do it in a way that's completely transparent and honest. and put ourselves out there and we're not, not everybody's going to love us. I guarantee you some, some of the people who sit on top of the pyramids and the big network marketing companies are going to go, I hate this. No, I like my position. Of course you do. I get it. But I've also talked to some of those people who said, Morgan, you're actually speaking to my unspoken pain. And I said, what do you mean? He goes, I would much rather make 50,000 a month for the rest of my life than make 150,000.

9:27 for a year, have the company go bankrupt. I've got to start again, have the company go bankrupt. And none of my people make money. So what we're doing is creating something where you can really feel good about what you're doing. Cause I think one of the fundamental issues that people have with direct sales is there's, or multi-level marketing in particular is, is there's a gut thing where if I recruit you, you become my economic slave. Okay. When you make a commission, I get paid. When I make a sale, you never get anything. It's a one way relationship. And I don't think many of us would have a purely one way relationship in our lives. So what we've done is flip that on its ear. Because if I recruit you to the company, yeah, if you make a sale, I earn a commission.

10:10 But as I earn more and more, the profit sharing pool, that's really the innovation that we did. Because normally you're paid on your leg or your downline or whatever, you paid on levels and stuff like that. What we said is that we're gonna take All the sales, well first off, if you make a sale, you get paid. You get paid between 60 to 85 % of the total commission goes to you in your pocket because you did that work. The problem with most of the systems out there is if you build a huge organization, tens of thousands of people, you're earning an override off of all of the efforts of all of those other people. There's a saying in network marketing that we say at the beginning, you work way harder than the money you make, but in the end, you make way more money than you deserve.

10:56 as long as you stick with it. But isn't that on your life? It is in a sense, but I think many more people, to me, our economy works best with the strong middle class. So what I found running two really big companies is that people are most productive when they're getting a residual income between five to 20, 20 grand rent a month. That's when they're really out there producing, they're selling. Once people were making over 30 grand a month, they actually stopped working. And it was so frustrating as a CEO and a company owner, people, I'd have to pay them the check because that's the way our compensation plan was, but they would just be on an island.

11:37 And there's a saying that you either gain your self-worth by production or politics. So if you stop working, but you're still getting this huge check, you start becoming a political liability to the company. And you start feeling like the company needs you more than that you need the company. And it creates all of these issues. We've solved that because what we did is we said, okay, we have this profit sharing pool. Every sale in the company goes into the profit sharing pool. Whatever's left after that 60 to 85 % goes in the pool. Then we all share in that pool every month based on the shares that you earn. So this does two things, Mark. First off, sales tends to become kind of tribal.

12:20 This is my team, this is your team. We compete against each other. But if everybody's sharing in the same pool, the same profit sharing pool, It's collaborative, it's cooperative now. So that's the first thing we did. The second thing is the platform owns the profit sharing pool. And what we do with that is we wanna get you to that five to 20 grand random month phase. So we say, okay, on the first $3,000 we invest to you, we're gonna invest 100 % of you. On the next 3,000, 90 % of you and 10 % is gonna go back in the pool so other people can make money faster. On the next 3,000, 60 % to you. Once you're over 30,000 a month, it's 10 % to you and 90 % back to others so they can scale.

13:04 But you're already making $30,000 a month and you can make more by doing direct sales. There's no cap or anything like that. You can go out and make hundreds of thousands of dollars if you do the work. But we don't want you just sitting on top of the efforts of other people who are doing the work. So the idea is, yeah. the idea is whether you're selling and so too is like, what are we selling? Yeah. Yeah. Right. But whatever we're selling, let's say this platforms anything, but the argument is the person on day one and the person been in the business 10 years, are they making the same on the sale per sale? Yes, yeah, per sale. And that's one of the big things we wanted to do is a lot of times it's so stacked against you if you get started late in the game, that it's really hard to catch up.

13:50 mean, it happens, but we wanted to make it so anybody, whenever they start, has the opportunity to make serious income fast. Is that one of the flaws with a lot of these systems, these network marketing systems is that they're not, correct me if I'm wrong, but this is the reputation it has. You're recruiting people into the business to be the customer. You're not recruiting people into the business to turn them into experts, into salespeople. Well, you have to look at incentives again. So if you look at the incentive of a typical network marketing company and a sale is made, 20 % goes to the seller and 80 % goes to the upline. So what behavior is that going to create? Build a huge sales force because you don't make much money by actually selling.

14:33 That's why we flipped it on its ear. 60 to 85 % goes to the seller with us and a much smaller amount goes into the pool. I'm on board of it. You're going to have to convince me on this idea of 90 % going back in. You have to convince me of that, right? And I hear what you're saying. just... it's not work you did. That's the key. I get it. I get it, but what, but I'm also a believer that the most important book that, um, that I ever, there's a bunch of great books, but one of the best books when it comes to self-help and self-improvement is Darren Hardy's compound effect. And we could disagree, but what I know is like, I just got done talking to someone this morning. I had some guys pouring some concrete at a job.

15:13 I have a real estate company, but I'm always working on projects and jobs. And I said, guys, we hired an excavation company to dig the trenches. And he said, Hey man, I know we paid that guy a lot. It was pretty much a subcontractor of the sub. He said, I know we paid that guy a lot per hour. Seems like we paid him a ton, but I said, Hey, no, no, I get it. You paid him on the 40 years of experience that he has. And so I'm happy that you hired an incredible guy that got the job done in one day versus paying someone per hour less and they drag it out three days and the quality isn't good. That guy's paid based upon his 40 years of experience. And I said, man, isn't that what we're all doing out here? We put all these years in and we just become better over time.

15:56 So the argument is I'm not being paid back as much on this, right? So give me some pushback on this. Okay, it's a great point that you're making and the key is about having interlocking regenerative cycles. So what we do for every dollar that we invest based on your circles, we give you an equity share in the platform that you own. So if we ever sell the platform, the only people who get paid are the people who earn the equity shares. So the bigger group you build and the bigger we reinvest in others, the more equity shares you earn. the more ownership stake you have in the platform. I'm listening. I'm listening.

16:37 I've been designing this for well over a decade. It's been so much time thinking about it and and having these types of conversation and I really appreciate the points you're bringing up because you're a very strategic thinker and I like the way you position things and what we try to do is create a system of balances because that's how nature works when when uh a leaf falls from a tree it becomes fuel for the for the next growth and This is one of the things that really got me is the biggest trees in the forest, they provide nutrients, they provide water for the smallest saplings because they know for the forest to thrive, those saplings have to thrive.

17:17 So we basically designed a system that does that. been waiting for to read in history and maybe you could point it out. I've been waiting for the dictator or the king, um, to care more about their people than themselves. hat would Wouldn't that be ideal? mean, yeah. I mean, the reason why I think it would be great is because. Cause I think that's what we're looking for for business leaders and politicians all the time. have all these huge expectations of them and we're like everything they told me they're going to do. And it's true. And it's like, no, that's just what they told you to get the vote. That's what they told you to come work for their company. That's what they said on the marketing campaign, but you show up and they're really not taking care of their people the way that they would want their own family taken care of.

18:06 Here's the key. Most problems stem from bad design, not bad people. So we were talking about politics before. One of the big challenges in the United States is when Citizens United was passed and people could put in as much money as possible and there was no limits to that. It attracted a certain type of politician who went, wow, I can get unlimited funds by becoming a politician instead of I could be of massive service as a politician. So you're solving all of our world's problems with circular wealth. That's great to hear today. That's awesome. Here's the thing that got me excited, Mark, is we spend over $5 trillion a year on customer acquisition costs, CAC, $5 trillion a year.

18:56 And just in the United States, we spend more on CAC than we do on the US military. So if somebody came to you and said, I'm going to give you the budget of the US military to help solve the world's problems, that would be exciting. We have that if we can solve CAC and make it so that it's relational rather than transactional and make it so it's about connection rather than clicks, I think we can do something pretty exciting. I buy into that. What are we selling here? What are we selling with circular wealth? Yeah. So, so what we wanted to do is most of time in a direct sales model, a company comes up with a product and they have to convince you to buy something you've never, never bought and explain to you why it's more expensive than you could buy at Costco or whatever.

19:37 We wanted to find companies that already had market traction. So, so we have dozens of companies on the platform. Some of them are 30 years old. They're doing tens of millions in sales. And we came to them with our model and said, listen, this is a no risk model. We want it. See, we're a two sided marketplace. We have to bring in brands and companies and we have to bring in affiliates. We have to make it attractive to both sides. So we go to the brands and we say, listen, there's no risk to you. There's no cost to sign up. There's no monthly fee. If we make a sale, you pay us the commission you agree to and that's it. You look at what your costs are and you figure that out and they go, okay, so I have nothing to lose. You guys aren't exclusive. No, you do all your other things. We're just an additional income stream.

20:18 So you go, okay, so why should I work with you? I said, because with us, You're making connections to your customers instead of clicks. You're creating a community instead of a trend or an exact. And most people got started in a business because they wanted to really impact people's lives in a positive way. And we give them the opportunity to do that. And then we go to the affiliates and say, Hey, you don't have to work with just one company and have to build a new organization for every company you work with. We're going to go out and curate the best companies out there. And you can earn multiple streams of income from every single one from one organization that you build. And this is important because a lot of times, especially in direct sales and network marketing, you might work for years building a company and that CEO does something stupid.

21:03 The company goes into business and you're like, I got to start from scratch. Here, you never have to do that. So we work with existing companies. They already have more market share and the real beauty that I didn't know if it was going to happen, but it has. is they're giving us much higher commissions than anybody they've ever given because they love the model. I mean, we're getting commissions of 25, 30, 40, even 50 % commissions where most of time if you sign up with one of these platforms, you get five or 10 or maybe 15%. We're doing two and three times that. Give me an example of a company or two. I know you don't want to just highlight one or two, but give me a brand that when you say it, we're like, okay, I know that. Okay, so Farisage, they've been around for 30 years.

21:47 They um sell Red Light. um We work with a lot of biohacking brands and the reason for that is both my partner and I had to be in that space. um I actually had a stroke five years ago and it just totally turned my world upside down and I used a lot of these biohacking things. So got to know a lot of the companies and I found a lot of them don't work. And so I wanted to create a platform where we would curate the best ones and people could trust that kind of like the Trader Joe's of online marketing. When you go to Trader Joe's, you know, the product's going to be good. We have a platform where we've curated these.

22:28 So that's one example. Also coherentwater.com coherent-waterwater.com. It's a product I use every day. It's a phenomenal product that you just mix it up. in a liquid and it makes that liquid coherent. And it sounds like woo woo or whatever when I first heard about it, but they've spent over $10 million doing double blind placebo studies showing what it does to your body and you feel it when you use it. And so that that's just two two two examples right there. So what's your co-founder's name again? Mario Breinovich. Okay, that's an Eastern European name. He lives in Croatia.

23:09 or split the health of the city. Yeah, it's phenomenal place and he's a phenomenal human. The interesting thing about him, he also built a world class global ad uh agency. So he's got the dual background of building and selling a major natural pharmaceutical company and a major ad company. So what we thought is by combining my direct sales background and his ability to create ad campaigns, we could work with a lot of these companies because the fact is a lot of times when people start a company, They're not an expert at direct sales. They're not an expert at marketing or ads. So we can bring that skill set to them and help them scale.

23:50 So this all sounds great. So it's a however a but. What's gonna keep you and he from becoming the monarchy of the British Empire? Yeah, so we have, I mean, first off, all the commissions that we come in, 90 % of those commissions go back out to our profilates. And we call them profilates because they're affiliates with profit sharing. It's a new term we came up with. So if we get $100 in, we pay out 90 % commission. There is no other company that I'm aware of that does that. Typically, when I own network marketing companies, if we got $100 in, we would keep $50 and we would pay $50 out.

24:34 That's the typical thing. So we keep a very small percentage for stock. On top of that, if we ever sell the platform, like let's say we build this into a multi-billion dollar platform, which is what, there's just a plan. Absolutely. That's what we intend to do. We aren't doing this to build a small company. So let's say we build a $10 billion dollar platform. I don't need $10 billion. I like money. I like a good lifestyle, but we have an algorithm set up again by design. Once Mario and I get a certain amount, 80 % goes back to our affiliates. So if we sell for 10 billion, 9 billion is gonna go to our affiliates.

25:15 Actually more and more than that with our algorithm, but that's built in by design. Um, what's the question? Cause I like to have conversation. I haven't even gone to questions, right? Um, what question? Did you think you guys and when did you start this? I mean you just started it recently when just started. Yeah, we've been putting it together for about two years doing all the software, we've invested a lot of money and a lot of time. We have an incredible software team in Europe. ah Go ahead, sorry. What do you think, what was the biggest question in the beginning that you think you were solving when you started this?

25:56 Like the biggest one that you consistently sat down, what's the biggest one? How can we turn clicks into connection and how can we redirect the $5 trillion that's spent on CAC every year into an ecosystem that decentralizes the wealth into communities instead of concentrating it into megacore corporations? what this is right and that's what the company is. That's what the platform does. And the beauty about it is the bigger we get, the faster the fly, fly wheel spins. Because, you know, let's just say we have a million reps.

26:36 How attractive do we become to a company that wants to join us? How much harder can we negotiate for a higher commission? Massive leverage. And the beauty about it too, is there's another part to it. It's called crew fund. So what we want to be able to do, Like let's say you have a manufacturing company, you come to us, we blow up your sales. You're like, Oh my gosh, Morgan, I can't keep up with production. I got to build a bigger manufacturing facility. need $10 million to do that. No problem. What we're going to do is present this to our million affiliates out there. We'll get a thousand of them to, you know, or 10,000 of them to put in a thousand dollars. That's $10 million.

27:17 You're now funded with your manufacturing facility and our affiliates. now own equity in your company instead of a venture capital firm. And it's much more valuable to you because you have 10,000 people who are now owners in your company who treat your business like they own it rather than they're a disposable asset. So when I pay in, when I get to 30,000 month, somebody caps out at three or 400 grand, I'm using my own a year, and then 90 % goes back in, right? Whatever the number is, I don't want... me just make sure you understand that is that is only what you're making off the profiteering thing. Yeah. For first off, we're not a downline. We don't like that term. It's it's it's concentric circles were a circular well, but you can make as much as you want.

28:04 And I guarantee you, we will have we did a test marketing with this. And the most I had somebody making was 50 grand a month sell just by selling the product. So we'll have people making hundreds of thousands a month just by selling. So yes, I'm on board with that. Check it off, right? You're a 60 to 80 % share of the commission on those direct sales, which is awesome. So the 90 % of the concentric. Yeah. Yeah. What's that going to be used for? Just to build the company more, to get more people in the business. doesn't go back to us. We put it back in the profit sharing pool so new people can make money faster. Now, nobody gets anything if they don't produce.

28:45 This isn't socialism. not redistributing wealth. We're saying instead of most people dying in that gap between when they start and when they really start making money, we want to keep them going. My uncle was the president of a really large direct sales company doing about $400 million a year. They did an internal study and they found if they could decrease attrition by 1%, they would increase growth and profits by 9%. Because if the holes in the bucket are getting filled, everything gets better. So we designed this to figure out how can we reduce attrition because what happens, you might look at it and go, but money's going back into the pool, I wanna keep it all, but.

29:31 That's what creates the attrition cycle going is if too few people keep it all. By putting it back in, your new people make money faster so they succeed more and that scales out. So your circles get bigger and bigger and wider and wider and your success becomes more stable. You think if you make money more money sooner, you don't leave the Oh, it's been documented. you can make $300 a month, there was a study done that showed if people could make $300 extra a month, 80 % of all bankruptcies could be avoided. If you get somebody making $300 a month residual income, they do not quit.

30:12 All right. So give us the biggest, uh, I could talk to you all day long, but we just had a half hour here. Maybe we can jump back in and that's what we're trying to do more because I think what, so many people do with long form and we've done a lot of it. Um, let's tell them what we need to tell them in a short period of time and connect with our brands and what we're trying to do and help people. And then maybe we can stack on that. We got in the weeds. We've made a lot of changes recently. It's let's talk to a lot more people in short, shorter amounts of time. Perfect. And tell them the real stuff. Because if I start talking about everything, I've got no value. Right. Yeah. You're like, yeah. Um, so talk to us about a really, we, what, why should people, why, like what's your six second or three second or 10 second elevator pitch, but it can be 20 seconds.

31:06 But what is that on? why people should really be a part of it, maybe different than our conversation already. And then how the heck they come and engage with you guys and do and come get a part of this. Imagine if you could be an owner instead of a disposable asset. If you could earn extremely high commissions, also earn monthly profit sharing, but also get equity in something that has the chance to be a global phenomenon. And you could be in it at the beginning. That's where we're at right now. We're just getting started and there's no risk at all. mean, it doesn't cost to sign up. You don't have to buy any product. You don't have to warehouse products.

31:46 All of our sales are on our company's web website. So you just share a link with your your contacts, they click on that you get paid the commission, you don't have to buy anything you don't have to do do anything. It's all handled by our brands. Hmm. All right. So we need to know the website to go to your social media. But what I'm sitting here wondering is, are you guys going to use this new world of AI and technology to help expand and grow this even faster? Where's that in your brain? I mean, we're definitely gonna use uh AI to help us scale, but we think we're also the antidote to the fear of AI where people feel like they're gonna get replaced because you can't replace real human connection.

32:27 And that's what we've done is created a platform where real human connection is rewarded. And um we can really focus on contribution rather than... consumption and extraction. You make it sound good. If this is the beginning, it's well versed already. You've refined this over the two years on building things. Tell us where we can come find you and we'll give you all the highlights when we put this out too. Yeah, absolutely. It's circularwealth.com and just go there. There's a three minute video that explains the basics. And then once you join, you get your own link to that. So when you refer it to people, then they join your circle.

33:10 And that's how we reward you with the. And in the beginning you jump in here, I'm sure as you guys are building this, you can actually get some FaceTime with Morgan if they really get in here and hammer it. That's the fun thing is right now we actually know the people who are working and we can have personal conversations like this. And I've seen this over and over over again in six months. I'm not going to know people when they join at all. So this is the time to get started. say one day we knew the guy. Hey, thanks for jumping on here. It's great to get to know you. And I'm excited about looking to see what you're going to build because you guys have the energy and all I want when people are building businesses, like believe in the thing that you're starting and building.

33:51 Believe in it. Right. And then and you'll vet it out to see if it's the 10 billion dollar idea. So congrats, man. thanks for coming on.