Did network marketing reach 10 percent of people, as the book predicted?

No. The US Direct Selling Association counted about 5.4 million direct sellers in 2024, which is well under 2 percent of the US population, and sales fell compared with 2023.

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Who Stole the American Dream, Part 2: The Promise, Fact-Checked

Q: What other kinds of leverage can build income?

Money that grows through investing, work that can be sold many times such as content, tools or courses, a small business that employs people, and a skill you sell at a higher price. Each has its own cost and risk.

Direct Selling 29 Sep 2026 · 16 min read

Nichod (seedhi baat) Part 2 me kitaab kehti hai — network marketing "logon ki franchise" hai, sasti shuruaat, duplication se team badhti hai, aur kamai ruk-ruk ke nahi, apne aap aati rehti hai. Swarg-nark wali kahani yaad rakho — "jo pehle dikha wo sirf advertisement tha". Leverage aur ek-doosre ki madad wali soch sahi hai. Par "sirf 1% business 10 saal chalte hain" galat hai (asal me lagbhag ek-tihaai), "har mahine 2 log" wala hisaab 21 mahine me duniya ki aabaadi paar kar jaata hai, "residual income" tabhi tak chalti hai jab tak log khareedte rahen, aur kitaab ki badi bhavishyavani (10% log judenge) 30 saal baad bhi poori nahi hui. Leverage chahiye — par wo sirf ek darwaze se nahi aata.

In part 1, the book made us afraid. Jobs are unsafe, degrees don't pay, and "almost every" small business dies. We checked those claims. Some were true. Several were not.

Part 2 is where the book offers the cure. And a cure is always easier to believe when you are scared. So this is the part to read most slowly.

Think of a man in a restaurant kitchen after a twelve-hour shift. His feet hurt. His phone shows a video: "Build it once, get paid forever." He does not need a lecture. He needs to know which parts of that sentence are true. That is what this page is for.

The summary video of part 2 opens with an old story. A man dies and is told to choose: heaven or hell. He asks to see both first. Heaven is calm and quiet. Hell is a party — music, dancing, the best food he has ever seen. He picks hell. The moment he chooses, the party vanishes, and he is in chains among the flames. "I was cheated!" he shouts. Another soul shrugs: "What you saw before was only the advertisement."

The video uses this story to warn us about jobs and degrees. Fair enough. But it is an even better warning about any opportunity that shows you the party first — the cars, the stage, the cheques — and the chains later. Keep this story in mind as you read the rest. The book itself gives the same advice: don't believe what you hear from others; get the facts yourself, then decide. We agree. That's what the rest of this page does.

The five roads the book rules out

Before it names its answer, the book walks through five other ways to earn — and closes each door. Here is each door, and whether it is really closed.

Road	What the book says	What's true
1. A job	You sell your time. No security, no freedom.	Mostly fair — a salary alone rarely makes you free. But a job is also the safest base to build everything else on.
2. Your own business	Only 1% of small businesses reach their 10th year.	Wrong. US government data shows roughly a third of new businesses are still open after ten years — not 1%.
3. A franchise	Costs a lot; only a third make a profit.	Franchises do cost a lot and many struggle. That is a fair warning — and a reason to check any "business in a box" carefully.
4. Investing	Makes the rich richer, but needs a lot of money.	Half true. Today you can invest small monthly amounts. It's slow, but it's open to almost anyone.
5. Royalties	Only for rare hit authors, singers and inventors.	Out of date. Ebooks, courses, templates, tools and videos let ordinary people earn small royalties. Not a fortune for most — but not closed.

Three of the five doors are more open than the book says. When a pitch closes every door except one, ask who benefits from you believing that.

What part 2 says, in plain words

It is the people's franchise. A normal franchise costs a lot to open. Network marketing costs very little, so anyone can start.
Leverage beats talent. You don't need to be the best. You need a team, and a small share of many people's work.
Duplication grows fast. Bring in just two people a month, and have each of them do the same. By the end of the year you have a huge network.
You're always at the top. No matter when you join, you sit at the top of the pyramid you build.
It's cooperation, not competition. In normal business people fight each other. Here you only rise by helping others rise.
Residual income. Like an author's royalties, you build once and keep getting paid after you stop.
Distribution is where the money is. Most of a product's price is spent moving it to you, not making it. Cut the middlemen and share that money.
Big shifts reward early people. Swiss watchmakers laughed at quartz and lost. Franchising was attacked, then took over retail.
It's about to explode. The industry will soon jump from 2% to 10% of people, so now is the moment.
The media is against it, because network marketers don't buy ads.

What part 2 gets right

1. Leverage is real. One person's hours have a ceiling. Every rich person you know uses some kind of leverage — other people, money, machines or content. This idea alone is worth the book.

2. Income that keeps coming is the goal. Freedom comes when money arrives without you standing there. That is the heart of this whole site, and of The Parable of the Pipeline, Hedges' other book.

3. The Swiss watch lesson is true (the details are simpler in the video). The video says an old Swiss watchmaker invented the quartz watch and the Swiss sold the idea to Japan. The real history is a bit different: Swiss firms and Japan's Seiko were both racing to build quartz watches in the 1960s, and the Swiss did make early ones — but they kept betting on mechanical watches. Between 1970 and 1988, Swiss watch jobs fell from about 90,000 to about 28,000. Ignoring change is dangerous — the same lesson as Kodak.

4. The start cost is low. Compared with opening a shop or buying a franchise, joining a direct selling company usually costs little. That is a real advantage — as long as the monthly costs stay low too.

5. Cooperation matters. The video's second story is lovely: in hell, people sit at a feast with spoons three feet long and starve, fighting. In heaven, they have the same long spoons — and feed each other. Helping others succeed is a real strength of team selling, and a good way to live. (It's also true of any good company, family or partnership.)

Where the promise breaks

ClaimDouble your team every month and you'll have 4,096 people in a year. Maths right, life wrong

What the numbers say2 to the power of 12 is 4,096, yes. But keep the same doubling going for 33 months and you need more than 8.5 billion people — more than live on Earth. It also assumes nobody ever quits. In real teams, many people stop within the first year. Try it yourself: put a realistic drop-out rate into our levels calculator.

Month	People, if everyone doubles	Compare with
12	4,096	a small town
20	about 1 million	a big city
27	about 134 million	more than the whole of Japan
33	about 8.6 billion	more than the whole world

ClaimJust add two people a month, and have each of them do the same. Maths right, life wrong

What the numbers sayIf you and every new person add two people each month, the team triples every month. That is 531,441 people after 12 months — and more than 10 billion by month 21, which is more than everyone on Earth. "Only two a month" sounds small. The maths shows why it can't last: late joiners find a market where everyone has already been asked.

ClaimNo matter when you join, you're always at the top of your own pyramid. True on paper

What the numbers sayYou are at the top of the part below you, yes. But everyone who joined before you is above you, and earns a share of what you and your team buy. Being "top" of a small, new team that is still buying its starter packs is not the same as being top of a business. Look at your own customers, not at your position in a drawing.

ClaimIt's pure cooperation — like the long spoons in heaven. Half true

What the numbers sayYour upline really does want you to succeed. But part of their income comes from what you buy each month. That is a mix of help and self-interest — normal in business, but worth seeing clearly. Take their help, and also ask someone who earns nothing from your decision.

Claim5% of your team's volume will pay you 2,000 to 20,000 dollars a month. Possible for very few

What the numbers say5% of X = 2,000 means X is 40,000 a month of sales in your team. For 20,000, it is 400,000 a month. If each person buys around 100 a month, that is 400 to 4,000 active buyers — every single month, all staying. Some people reach this. Most don't: in the AARP survey we covered in part 1, only about a quarter of participants made any profit at all.

ClaimResidual income works like an author's royalties — build once, get paid forever. Half true

What the numbers sayA book, once written, is finished. It can sell for years without the author. Team income is different: it comes from people who must keep buying every month. When some stop and nobody new comes in, the income shrinks. At 5% of people stopping each month, about half the income is gone in a little over a year. See it for your numbers: Residual Income Reality Check.

Claim80–90% of a product's price is distribution, so cutting it out makes products cheaper and pays you. Unproven

What the numbers sayDistribution costs are real, and they differ a lot from product to product. But there is no solid proof for one big 80–90% number. And network marketing is also a distribution system: commissions paid on many levels, events, bonuses and cars are distribution costs too. The honest test is simple — compare the price with a similar product in a normal shop.

ClaimThe industry will jump from 2% to 10% of people within 4 to 6 years. Didn't happen

What the numbers sayThe book first came out in the early 1990s. Three decades later, the US Direct Selling Association counted about 5.4 million direct sellers in 2024 — well under 2% of the US population — and total sales of about 34.7 billion dollars, down from 2023. The "critical mass" never came. Any "it's about to explode, join now" line should be checked against numbers like these.

ClaimThe media attacks network marketing because it doesn't buy ads, and income disclosure rules hold it back. Wrong

What the numbers sayIncome disclosures are not an attack. They are the one page that shows what the average member earns, instead of only the stars on stage. That page protects you. A company that fights showing it is telling you something.

ClaimFranchising was attacked too, and look how big it is now. True, but read the ending

What the numbers sayFranchising did face tough new laws in the 1970s. It survived — and grew — by accepting strict rules: in the US, the Federal Trade Commission's Franchise Rule (1979) forced franchisors to give buyers a detailed disclosure document before they pay. So the lesson of franchising is the opposite of the book's: clear numbers made it trusted.

Leverage without only one door

Here is the good news the book hides. Leverage has many doors. Network marketing is one. Here are others, with their honest costs.

Kind of leverage	What you build	Start cost	Main risk
Money	Savings that grow on their own	Very low — even small monthly amounts	Slow; markets fall in bad years
Content and code	A website, videos, a tool, a course — made once, used many times	Low money, a lot of time	Can take a year or more before income
A skill priced higher	More money per hour for the same hour	Training time	Still tied to your hours
People	A small business with staff	Medium to high	Wages must be paid even in bad months
A team (network marketing)	Customers and a sales team	Low to start, plus monthly buying	Drop-outs; most earn little

Most people who reach freedom mix two or three of these. The kitchen worker from the start could put a small amount into savings every month, learn one skill that pays more, and build one small online asset on the side. None of it is fast. All of it keeps paying if he stops for a month. Read how that works in turning small savings into assets and what one person can build alone online. Watch how slow money grows with the compound interest calculator.

If you still choose network marketing

That is your right, and some people do build real side income this way. Go in with open eyes:

Product first. Would you buy it at this price with no business attached? If not, stop.
Count only outside customers. Your own buying and your family's "support" orders are not a business.
Ask for the income disclosure and look at the median, not the top.
Test the "passive" part. Put your real numbers in the residual income calculator and see what happens if you stop for six months.
Check the company with the MLM Red Flag Checker.
Don't quit your job early. Use the Can I Quit My Job? calculator before you hand in your notice.

Watch for these lines: "Now is the moment, the wave is starting." "Build once, paid forever." "The media hates us because we're winning." Each one asks you to feel instead of count.

"I dare you to be rich"

The book ends with a dare: pick the success door now. It's a good line. Here is a better dare.

I dare you to count. Count how many customers you really have. Count what you spend every month. Count what happens if you stop. If the numbers still work, go ahead with a clear head. If they don't, you just saved yourself a year and some money — and that is also a step toward freedom.

Nobody can steal a dream from a person who checks the numbers.

📚

Read Burke Hedges yourself

Both books are short and full of energy. Read them for the push — and keep this page open for the numbers.

Who Stole the American Dream? on Amazon The Parable of the Pipeline on Amazon

As an Amazon Associate I earn from qualifying purchases. Als Amazon-Partner verdiene ich an qualifizierten Verkäufen.

Questions people ask

What does the second half of Who Stole the American Dream say?

It says network marketing is the people's franchise: cheap to start, built on leverage and duplication, and able to pay residual income that keeps coming after you stop working. It also predicts that the industry was about to grow very fast.

Does the doubling example work in real life?

The maths is correct: doubling every month for 12 months gives 4,096 people. But after 33 months it would need more people than live on Earth, and in real teams many people stop within the first year. It shows the best case, not a normal one.

Is network marketing income really passive?

Only partly. It depends on customers and team members who keep buying every month. When people stop and you stop adding new ones, the income shrinks. Our residual income calculator shows how fast.

Did network marketing reach 10% of people, as the book predicted?

No. The US Direct Selling Association counted about 5.4 million direct sellers in 2024 — well under 2% of the US population — and sales fell compared with 2023.

Is it true that only 1% of small businesses reach 10 years?

No. US Bureau of Labor Statistics data shows roughly a third of new businesses are still open after ten years. Starting a business is hard, but far from hopeless.

What other kinds of leverage can build income?

Money that grows through investing, work you can sell many times such as content, tools or courses, a small business with staff, and a skill you sell at a higher price. Each has its own cost and risk.

Sources
US Bureau of Labor Statistics, business survival data · US Direct Selling Association 2025 study, via Direct Selling News · Quartz crisis — Swiss watch employment · AARP Foundation, MLM survey (2018) · Book overview: SoBrief