LulaRich: What we can learn from the rise and fall of LuLaRoe

Have you watched LuLaRich, the Amazon Prime docu-series that chronicles the rise and fall of LuLaRoe?

In case you’re not familiar, LuLaRoe was a billion-dollar multi-level marketing (MLM) clothing company that specialized in buttery soft leggings and vibrant prints. As I watched the series, I was fascinated by their rapid growth, their ability to ignite and harness the desire for entrepreneurship in tens of thousands of women, and the use of social media and pop-up shops as their primary mechanism for selling product. But as we saw, there was a dark side to all this – women, primarily stay at home moms, military wives, and lower income women – dropped thousands of dollars up front to purchase and carry inventory, faced constant pressure to recruit new people, and were targets of abusive and manipulative behavior by the owners for their own personal gain.

 Today’s post is not about LuLaRoe, specifically, or MLMs, direct sales, or network marketing companies, in general. But there are some powerful lessons that all business owners can learn from LuLaRoe’s story. Let’s dive in!

1.     Smart growth over catastrophic growth

Every business owner wants their business to grow. In fact, I can’t tell you how many conversations I’ve had (some with myself) where business owners say, “I wish my business would explode.” And while I get the sentiment, unless you have all the infrastructure, systems, and leadership in place when it happens, or a plan for how to scale with that kind of growth, you do not want it.

LuLaRoe had what they called “catastrophic growth,” which was essentially going from $0 to $2 billion in four years. For a company whose average product was about $50, imagine just how much inventory they needed to supply. They had few processes for onboarding new consultants, and they certainly couldn’t keep up with the demand. In one year, they went from 35,000 consultants to 100,000. Every single one of those individuals needed training and support and had to purchase at least $5000 worth of inventory. Add in senior leadership who had little to no experience running a multi-billion dollar company, and you can see how this was a recipe for disaster.

This is why strategically planning for growth is so important. When you’re able to project forward into the future and anticipate what you’ll need to be successful, you can get the right systems, processes, and people in place. Even if you have bursts of rapid growth, you want those to be followed by a slowing period, so you can rapidly catch up and set yourself up for the next phase of growth.

2.     Selling the promise of opportunity

Successful businesses fill gaps, solve problems, or sell the promise of something. LuLaRoe did this incredibly well. They targeted stay at home moms who were highly intelligent, highly educated, and in many cases, had left a career in order to raise their kids. LuLaRoe knew that this combination of factors plus the desire (and need) that many women have to contribute financially, would be incredibly well received with their promise of “part-time work for full-time pay.”

LuLaRoe was able to sell the promise of possibility, tap into the importance of feeling empowered, of being passionate about something, and created a powerful community around it. They knew who their ideal client was, how to speak to their pain points as well as the thing these women wanted most, and as a result, rapidly grew.

The lesson here for business owners is to really understand what your perfect client truly wants and needs. When you do this, the messaging, the offer, and the price point become very clear.

3.     Integrity and leadership matter

There’s a lot I could say about what went wrong with LuLaRoe’s leadership, but at the end of the day, integrity and ethical leadership were missing.

As a business owner, what you stand for, how you go about your business practices, and what you talk about is a reflection of what you personally value. There are ways to empower your clients and employees without it creating dependance on you. LuLaRoe was known for engaging in what I call “false empowerment” which is essentially promoting a message of “female empowerment” that requires you to continue to buy their products and grow their business in order to be successful.

Creating your own intellectual property, following the laws of your state/country, and promising results you know you can get are a vital part of your role as a leader.

4.     It takes more than motivation to run a business

I’m going to do my best not to get on a soap box – scratch that, it’s soap box time. You need more than a positive mindset and some motivation to run a business. There are countless people in the online business world preaching mindset over everything else, and while mindset is incredibly important to your success – it’s NOT the only thing that matters.

When I see business coaches, people who have been hired to help you fix a problem or grow your business who ONLY use mindset, my brain explodes. There are fundamental tools and strategies you need, and without them your business will not grow.

Having a clear understanding of who your ideal client is and a compelling offer that speaks directly to them (see #2 above), proactively prospecting and a leverage a solid and consistent marketing strategy, and having the ability to sell with confidence are just a few. These mechanics are critical to your success, and no amount of mindset and motivation is going to help your business if you don’t do the hard work to figure this out.

LuLaRoe had a self-proclaimed motivational model. They really focused on encouragement and hustling hard without providing the tools, support, and tactics needed to grow the business. Hustling hard is not the answer. Successful businesses need a strategy, the right business foundations, strong systems, a clear and compelling offer, and your willingness to sell and serve well.

So, the next time you’re struggling to grow your business and you want to hire someone to help you, make sure they are targeting both the mindset AND the strategic and tactical mechanics. Both are needed.

Stepping off my soapbox now.

 As you likely know, growing and running a business takes time, tools, and try hard. It takes being rooted in your values, having strong integrity, and building a strategy and action plans to get you there. It takes deep belief in what’s possible and what you can create.

There’s a lot we can learn from the rise and fall of LuLaRoe, and if you’ve seen LuLaRich, I’d love to hear your takeaways.