Beachbody Grows Exponentially Thanks To Network Marketing

Shaun T. Insanity
There are not many companies these days that can do $400 million in sales and remain relatively anonymous.

Yet Beachbody, a private company, grossed nearly as much as Groupon did last year and very few people talk about the robust engine that is behind exercise workout programs like P90X, INSANITY and Turbo Jam.

Under the leadership of co-founder Jon Congdon and Carl Daikeler, the company has developed a business model that seems to be Teflon, turning successful converts of its programs into network marketers who ensure that the brands flourish.

Many multi-level marketing companies are based on building a network of sellers and distributors getting rewarded based on the size of their network.

Most often, the people who have gotten in on the ground floor reap the greatest benefits while those late to the game struggle to make money.

What makes Beachbody’s network of distributors, called coaches, so successful is that these people have done the programs and are often in incredible shape. Their testimonial and therefore their business relies on how good they look, not whether they tell friends that a certain superfruit drink helps them have more energy or cures their stomach problems.

It seems like, more often than not, network marketing thrives on results which can’t be verified, but if my fat friend shows up with a six-pack, I’ll be more likely to believe he was doing an intense workout program.

Since starting the network marketing program three and half years ago, Beachbody now has 51,000 coaches who take a cut of videos and nutritional products they sell. Beachbody coaches sell $1 million worth of nutritional shakes under the brand’s Shakeology name a week. And it’s not cheap at around $120 for a month worth of servings.

“We could have built this company’s sales a lot faster at retail by selling at Walmart and Target,” Daikeler said. “But selling it through direct television (infomercials) and through our network works better for us.”

Daikeler says that his coaches serve as walking billboards and salespeople who want to help their family and friends by helping them lose weight through the company’s exercise programs. This is unlike many other multi-level marketing companies that solely rely on building a network to make more money.

And Daikeler doesn’t have to pay for testimonials, a common practice in the infomercial business space he plays in.

“The standard network marketing doesn’t work with our model,” Daikeler said. “This is not a ponzi scheme where if you’re the last one in, you don’t have a chance to do well.”

While the average lifespan of a multi-level marketer is three months, Daikeler says his coaches remain in the system an average of 18 months. It’s why he’s confident that by the end of 2011, there will be 150,000 coaches.

“We don’t promise it will replace your every day job,” Daikeler said. “That has been the case with about 1,000 of our coaches. But what it does for others is it keeps them in shape. In order to continue to have credibility selling, you need to continue to keep up. And so, it allows the people who want to fight obesity, to be motivated by the fact that they have skin in the game.”

By continuing to have more and more videos – P90X led to a harder workout, INSANITY, and that program is leading to The Asylum, which will come out in a few weeks – I don’t see Beachbody slowing down any time soon. And the non-traditional, more patient route of using those converted to the brand by really using it is a smart approach that I think will pay off nicely down the road.

Coffee, Tea, and Caffeine

Coffee, Tea & Caffeine
Today we discuss the most popular drink in the world: coffee. I don’t actually know where these statistics come from, but since we mainly want to discuss one ingredient, caffeine, I’ll lump coffee, tea, and other caffeinated beverages into the same discussion so that we’ll be sure to address something that’s pertinent to almost all of you. Coffee and tea have been around for the entirety of recorded history, so no matter what science tells us, we begin this edition with some time-tested knowledge that people don’t go around dropping dead over the stuff, nor will it get you banned for cheating when you win at the Olympics (unless it’s too much).

Coffee and tea are probably the most controversial substances we consume. Unlike, say, soda, candy, chocolate, and fast food—which we know are detrimental to our diets—studies swing both ways over the benefits and dangers of our morning cup of java. But whatever the outcome, we drink the stuff with an almost ritualistic glee. If you drink neither coffee nor tea, you’re an outsider in almost any culture on the planet.

Coffee, tea, and other caffeinated drinks
First off, let’s talk about the difference between tea, coffee, and other drinks laced with caffeine. Coffee and tea are both very simple products made from mixing ground-up plants with hot water. So they’re both 100 percent natural, contain approximately zero calories, and have a few nutrients. What they do contain is caffeine. A lot of it. Coffee has nearly twice as much caffeine as tea, but the amount varies by type and the brewing process. As a general rule, trendy green teas have less caffeine than black teas, which have less than coffee. Figure that for each cup of coffee or tea you consume, you’ll get between 50 milligrams and 200 milligrams of caffeine.

Both have other assorted nutrients, mainly antioxidants, all of which are quite healthy. The downside is that both are acidic to the point that habitual consumption can cause stomach problems in some people. But the main hit or miss with folks when it comes to coffee or tea is the caffeine. After this, their choices are usually made by taste, ritual, or the culture they live in. Caffeine gives you a jolt of energy, which we’ll discuss later, and because of this, many other beverages now come with a healthy dose of the stuff. Most sodas have some caffeine, but the big trend today is toward turbocharged “energy drinks,” a topic for another day. These are often nasty concoctions of sugar, caffeine, and other assorted legal uppers designed to amp you sky-high and provide the illusion that you’re having a good time. They may work, at least for a short time, but they are basically just time bombs of euphoria. When you crash, you crash hard.

Can coffee or tea make you fat?
There is one place we have a definitive answer on this subject, and it’s that neither of these drinks will make you fat. In fact, they should do the opposite. Caffeine is a diuretic, meaning that it affects your metabolic process at a heightened level. Translation: it makes you go to the bathroom more often. It also elevates brain activity, which, technically, should make you less hungry. This is why caffeine is often added to diet aids.

The only things in coffee or tea that can make you fat are the things you add to them. The menu at your local Starbucks contains stuff that makes coffee merely a side dish, if that. And traditional drinks such as Thai iced tea are only tea in name. Therefore, just because something calls itself “coffee” or “tea” doesn’t mean that’s all there is to the story. Like with most foods, reading labels is important. We’ll talk more about coffee drinks next time.

The latest research
Coffee has been in the headlines a lot recently. You may have caught the headlines a while back stating that it could give you a heart attack. Or maybe you caught the study touting it as a superfood, which came out at the same time! Certainly, you’ve heard that it’s a banned substance by the International Olympic Committee (IOC) due to its performance-enhancing qualities. But then why, you wonder, did you just see a headline saying you should avoid it prior to a workout? And what about that study stating that if you drank enough coffee, it would stave off the effects of all that alcohol you consume?

Coffee, tea, and caffeine are perhaps the most widely studied things we put into our bodies (over 19,000 recent recorded studies), yet no definitive stance can be found on the stuff. If this seems odd, we must consider the fact that studies need to be funded and a lot of money can skew a study to say this or that—a subject I touch on often in my blog. At any rate, let’s wade into some of the more recent headlines and try to make some sense out of them.

Will coffee give you a heart attack?
Apparently it will—if you’re “at risk for heart attacks,” according to a syndicated article that was all over the Internet a while back. But what does this mean? The article begins with the vague line about how coffee may trigger a heart attack in some people. If you delve deeper, the water becomes muddier, so, tired of sifting through their muck, I went to the source.

For over 4 years, a large Costa Rican study examined the relationship among 503 nonfatal heart attacks. The study found that most of the subjects drank coffee prior to having the heart attack. In the stats, it appeared that light coffee drinkers were at more risk than heavy coffee drinkers. This, as you might suppose, caused some confusion. Looking deeper into the abstract, we see that the researchers think that the coffee/heart attack relationship stems from a rare gene variation in some people. They also stated that their research was “far from conclusive.” The report on Yahoo!® made no mention of the gene variant and, instead, went with the more alarmist “those at risk” line because “who isn’t, right?” The study also clearly stated that most of the population was at zero risk from drinking coffee.

The bottom line of the study was that most of the population was not at risk, and the few that might be, also may not be. So, for now, I’ll side with Dr. Robert Eckel, former president of the American Heart Association, and remain “unconvinced.” Furthermore, a study done over 2 decades using 120,000 subjects concluded that there was no relationship between even heavy coffee drinking and heart disease. This study, done in part by the Harvard School of Public Health, showed that there was no link between heart disease and a daily intake of six or more cups of coffee per day. It also stated the risk was the same for those who consumed less than one cup of coffee or tea per month. This study also addressed the Costa Rican findings, stating they were “possible” but “require confirmation.”

Can you lose your gold medal?
Not anymore. In 2004, the IOC removed caffeine from its list of banned items. Prior to that, athletes could be busted for drinking about five or more cups of coffee. Certainly, this means that some highly regarded scientists once thought it was an ergogenic (a performance enhancer). But was it removed because it was found to be ineffective, as there are now better ways of “cheating,” or because the coffee lobby contributed to the IOC? Time may or may not tell, but one thing’s for sure: many people believe caffeine enhances performance.

A recent Swiss study, however, refutes it, at least in one sense. The study of 18 individuals showed that coffee prior to exercise restricted heart blood flow by 22 percent. Obviously, this would be a detriment to performance, but again, the research is far from conclusive. For one, the study used regular coffee drinkers, and participants were not allowed to drink coffee for 36 hours prior to the experiment, so their results may have had to do with a coffee-withdrawal effect. And two, no study of 18 people can be anywhere close to conclusive. But it’s interesting, for sure, and certainly much more will be done. I’d keep an eye out for more on this.

But again, there’s a lot more science showing that it has positive physical effects, even if they stem from better brain function. An Austrian study using functional Magnetic Resonance Imaging to assess memory skills showed that there was a marked improvement in motor skills and memory after subjects ingested 100 milligrams of caffeine. The study cautioned that the progression was not linear (meaning that more is definitely not better). But the test concluded that caffeine was a a performance enhancer.

According to physiologist Terry Graham, PhD, of the University of Guelph in Canada, “What caffeine likely does is stimulate the brain and nervous system to do things differently. That may include signaling you to ignore fatigue or recruit extra units of muscle for intense athletic performance.” And as to whether this better aids strength or endurance sports he adds, “What’s amazing about it is that unlike some performance-enhancing manipulation athletes do that are specific for strength or endurance, studies show that caffeine positively enhances all of these things.”

Is coffee a superfood?
This would depend, I guess. We’ve seen some downsides, and I’ve yet to mention two others. One, it’s addictive, and two, it’s been linked to insomnia. Performance-wise, sleep is crucial for your body to recover and recharge itself. No matter its benefits, if coffee negatively affects your ability to rest, it’s not going to help you much.

Yet, analyzing data—of 126,000 people and gathered over 18 years—has led to an almost astonishing number of likely health benefits, including lowering your risk of diabetes, Parkinson’s disease, and colon cancer; improving mood; appeasing headaches; and even lessening the risk of cavities. In some cases, even the “all things in moderation” cliché was put to the test. For example, drinking one cup to three cups a day reduced type 2 diabetes risk by single digits, whereas drinking six or more cups per day slashed men’s risk by 54 percent and women’s risk by 30 percent. Maybe it’s just because coffee makes you want to get up and do something; those participants who reduced their risk may have exercised more. These findings have been routinely backed up by further studies. At least six studies indicate that coffee drinkers are up to 80 percent less likely to develop Parkinson’s disease, with three showing the more they drank, the lower the risk. Other research shows that compared to not drinking coffee, at least two cups daily can cut your risk of gallstones in half, provide a 25 percent reduced chance of contracting colon cancer, and offer a whopping 80 percent decline in liver cirrhosis risk. So abundant is this research that caffeine is added to certain medications to treat headaches, mood, asthma, and now Parkinson’s disease.

So is it time to hit Starbucks?
Since, as I’ve said before, this isn’t Politics class, I won’t tell you not to, but I’m certain that your local organic, fair-trade, mom-and-pop coffeehouse with the open mic on Thursdays will have better coffee anyway (wink). Back to the subject, coffee or tea certainly don’t seem to be harmful as a part of your diet. The problem with them, I suspect, is more often what we add to them. So if you enjoy your morning or afternoon (maybe skip the evening) ritual, then by all means indulge. Just keep it traditional, pure, simple, and forget the word Frappuccino was ever invented.