Paul Orberson: Recruiting for success

Company offers hope of wealth; some say it rarely materializes

lblackford@herald-leader.comMarch 7, 2010 

NASHVILLE — In the vast, glitzy confines of the Gaylord Opryland Resort, Paul Orberson looks a little out of place.

He's wearing loafers, not cowboy boots, and he doesn't have the yearning look of the wannabe country music stars who fill this town.

He doesn't have to. In the singular world of network marketing, he already is a genuine celebrity, and as soon as he lopes into Ballroom B, he's surrounded by people who want him to sign their copies of his book or take his picture. Beaming, Orberson shakes many hands, cracks jokes and hands $5 out of a fat wallet to a small child. "Of course I remember you!" he says to one beaming matron.

"He's so down to earth, so plain spoken," marvels Tim Woodard, a Nashville businessman. "He's real ... someone with that much money!"

Woodard is here with about 600 other Nashvillians to hear from Orberson about how they can get as rich as he is, or close, anyway.

In Lexington, where Orberson lives and runs his firm, Fortune Hi-Tech Marketing, he keeps a fairly low profile. The most recent exception was his January bid of $100,000 in the Hoops for Haiti fund-raiser to have dinner with University of Kentucky basketball coach John Calipari and actress Ashley Judd — a gathering he says he might not even attend.

But in Nashville, and in multi-level marketing meetings across the country, he is not just a star, but a legend. He's the high school basketball coach turned multi-millionaire, a man who could see no future, but found one.

Multi-level marketing is sometimes known as using a pyramid sales force because of the triangle shape of the hierarchy of people who are both a recruiting force and a sales force. It usually requires a sign-up fee (in the case of Orberson's company, $299), a lot of energy, and, at least two marketing experts say, a willing suspension of disbelief.

Like other such companies, Fortune has had complaints from people for whom the promises didn't pan out. And the company settled a case in North Dakota recently in which the Attorney General's office alleged that the company had violated the state's Pyramid Schemes Act. No determination was made regarding the pyramid scheme law.

But the 600 gathered in Nashville on a cold, rainy night in early February want to hear not just how it works but the compelling back story that will convince them that this pitch is not too good to be true.

And that's what Orberson can surely deliver.

He starts them out with his wide grin, a Kentucky twang and a joke, describing how he didn't really want to go to that first recruitment meeting for the company that wound up making him rich.

"If you don't think big, I'm with you!" he shouts to big laughs from the audience. "If you never wanted to be here in the first place, I'm with you!"

But then he turns serious. "I think small," he said. "We're told our whole lives to think small. As Dr. Phil says, 'How's that working out for you?'

"People always say, 'When my ship comes in, when my ship comes in!'" Orberson says with mounting volume. "You know what? Your ship can't come in; you've got to send one out! ... This ship cannot sink you!"

A text from Coach Cal

Paul Orberson, 53, could probably have dinner with John Calipari any night they're both free. That's how it goes after your first $1.6 million donation to UK Athletics. In Orberson's case, that built the Paul Orberson Football Office Complex at the Nutter Training Facility. You get access — to good tickets, to practices, to Coach Cal's cell phone.

"He just texted me. In fact, he said he liked my book," Orberson said of Calipari as he boarded the eight-seat private plane that he rented for the trip to Nashville.

However, Orberson might not even go to the dinner for six, plus Calipari and Judd. "I really just wanted some friends and some family to get to go," he says.

Private aviation, he says, is one of his few indulgences; good seats at Rupp Arena and other venues are another.

Sports weave constantly through Orberson's life. A Danville native, he got a baseball scholarship to Western Kentucky University; by the late 1980s, he was back as the Boyle County High School basketball coach. He loved it, he said, but he also felt suffocated trying to support a wife and two children on a teacher's salary.

In 1990, one of his coaching friends led him to Excel Communications, an emerging phone services company that was using multi-level marketing. Like other such companies, Excel's plan depended on recruitment as much as sales. So Orberson turned to his wide array of coaching friends. Each one he recruited brought him a little more money. Each person his recruits recruited and every sale they made — Orberson's "downline" as it's called — brought him even more money. Then a lot.

This is how Orberson describes his ascent in his self-published book, Something Good's Gonna Happen:

"In November of 1992, I went from never having made over $1,200 a month ... from nearly starving my family to death, to getting a check from Excel for over $10,000 for that month. Then, in April of 1996, my check went over $1,000,000 for the first time ... In three and a half years, I had gone from wanting to give up my business to making more money in the shortest period of time than anyone ever in the history of the network marketing industry."

In 1996, the company went public. In gratitude, Excel gave Orberson more than 200,000 shares of the new stock in the form of options. In 1999, founder Kenny Troutt retired as chief executive, later becoming the co-owner of WinStar Farm in Lexington, which has three possible contenders for this year's Kentucky Derby.

In 2004, Excel's parent company, VarTec, declared bankruptcy, forcing it to release all of its independent contractors and ending its operation as a network marketing company.

That meant people like Daryl Hallmark, who quit his high school coaching job in Hopkinsville to join Excel, were now out of work.

"Obviously, it didn't go the way they said it would," said Hallmark's son, Daryl. "My parents made money, but then it was over."

Orberson had gotten out well before that, retiring in 1996. He moved to Florida, got to sleep late, eat at nice restaurants and travel to professional sports games in private jets. But four years of nearly constant travel had kept him from his two kids and finally ended his marriage. He took stock of his new life. "There just wasn't anything to get up for in the morning," he said. "I was chasing a black cat in a dark room. If you worship money, it's not a good master."

By 2000, he was back in Lexington with a new wife, Sheryl, now 49, and a new idea for a business.

Fortune Hi-Tech Marketing took up Excel's strategy of using direct sales to sell services and products. He signed up the DISH Network, AT&T, Cingular, GE Security and Lamas Beauty. Twelve people paid the $299 initiation fee. They would act as both salespeople and recruiters. In one month, 1,200 people signed up.

There are now, Orberson says, 160,000 representatives in the United States, Canada and Great Britain. The company averages about 500 new people a day.

'Own that town'

Fortune grew quickly. Then, one day in 2003, Orberson finished his morning workout and went to the bathroom, where his urine was "pure blood." He had a six-pound tumor attached to his right kidney, and the renal cell cancer had spread to his lymph nodes. After surgeons at the University of Kentucky's Markey Cancer Center removed his kidney, he got an infection, he said, then went home, he thought, to die.

Except he didn't die. He lay in bed and thought about his daily habits of three packs of cigarettes, a can of Skoal and a nightly bowl of ice cream. And very, very slowly, he started to get better.

"In a weird way, it was the best thing that ever happened to me," he said. "I would have continued my ways and now I'd be dead."

He started talking to cancer researchers and nutritional experts, and then Fortune had a new product, the only one the company produces: True Essentials vitamins.

During his illness, Fortune was run by Orberson's friend Tommy Mills, a former Boyle County High School principal, who had hired Orberson as a basketball coach and paired up with him to start Fortune. Orberson came back to work with, as he puts it, "a lot more balance."

His son, Jeffrey, 34, is now the CEO, so Paul Orberson spends most of his time travelling to meetings to tell his story and convince people that it can be theirs. In February, he spoke in Nashville, Oklahoma City, Jeffersonville, Ind., Charleston, S.C., and Miami, and he took 200 of his top earners and their spouses on a Caribbean cruise.

When he needs a break and warmer weather, he heads to his house outside of Charleston, S.C., near his daughter Sarah's home.

"The bad economy is really good for us," Orberson said, then, correcting himself, added: "What I mean is, a weak economy allows people to take a look at options of making other incomes."

Certainly, right now, Orberson's message hits a nerve: He describes a bleak universe where most people show up at debt-ridden companies to be overworked and underpaid.

"It's for people who've bumped up against a ceiling," he said of Fortune. "They have no chance ... and they're looking for something else."

That describes Yvette Pennington, a bubbly, gregarious former hairdresser from Grayson. Two years ago, she had just torn her rotator cuff and couldn't work. "What was I going to do, someone like me without a high school diploma?"

A friend told her about Fortune, and she paid her $299 and joined. Now she's at the Executive level, having recently earned a free Lexus (an idea borrowed from Mary Kay Cosmetics)

"We don't buy anything. We don't pay anything. We're introducing a new business concept," she said. "We're the new form of marketing for the 21st century!"

Pennington hopped a ride with Orberson to Nashville. "This is a man who will let you ride on his private plane, will let you walk into his office, anytime," she says. The next day, Pennington was scheduled to drive to Columbus for new business.

"You're going to own that town!" Orberson told her.

Paying it forward

In Nashville, the first speaker is Kevin Mullins, a brawny former contractor from Florida. He says he's making $82,000 a month, drives a new Lexus and thinks he'll break $100,000 a month next year.

"This man right here is the biggest reason I'm doing this business," he says of Orberson. "The guy calling the shots here has done this. His dream is to do the same thing for people like me."

Certainly, the credo of doing good by doing well is prevalent in Fortune, and many say they think Fortune provides an altruistic way to get rich.

"I've never seen another business in my entire life where money is the byproduct of helping someone else succeed in life," Mullins says. "It's kind of like a pay-it-forward system."

But pay it forward doesn't always work. Ruth Miers, 72, of Fort Wayne, Ind., filed a complaint with the Kentucky Attorney General's Office, one of at least eight filed there against Fortune.

She paid almost $700 to the company to become a representative, get access to a Web site and become a trainer of other representatives. Then her recruiter stopped returning her calls.

"She told me, 'We will make you millionaires. You have to do nothing and I will build the company,'" Miers said.

After she filed her complaint, Fortune returned $400 to her. Her daughter, Kathy Conkle, said: "What the representative told us simply wasn't true. You've got to know if you're telling somebody the truth or not."

But people who get involved in multi-level marketing are often unable to discern fact from fiction; there's a cognitive dissonance, says Jon Taylor of the Consumer Awareness Institute in Bountiful, Utah.

These marketing firms are "like a kind of economic cult," he said. "You have a situation where people deceive themselves and they can't allow themselves to believe they've been duped. A lot of that self-deception goes all the way to the top."

Taylor said he wasn't surprised that Fortune is growing. "They're part of a pattern that proliferates during times of economic downturn," he said. "People believe they will get rich, but the people at the bottom of the pyramid are statistically unlikely to do so."

Fortune was briefly banned from operating in North Dakota for working without a transient sales license and appearing to violate the state's Pyramid Schemes Act. Orberson sent his lawyers to Fargo and paid a $12,000 fine. No determination was made regarding the pyramid scheme law.

"Within 48 hours, we were back in that state," Orberson said. "Most complaints are, 'This guy said he'd make me rich and now I can't find him.' They don't know who to be mad at. We try to resolve it and we do resolve it."

For now, Orberson says, he's focusing on all those wide-open cities just waiting for Fortune.

"Nashville and Memphis are two great networking areas because people in this part of the world trust each other," he said. "Around here, they're more apt to say, 'OK, I'll look at what you're offering.'"

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