Sam Caster has always had a heart for leadership, intercultural understanding, and humanitarian outreach. After founding a publicly traded network marketing company based in Texas, he recently transitioned his business into a social entrepreneurship model by integrating giving as a core component to their mission. At the company’s latest national convention, he rallied his associates around a movement he calls M5M™:Mission 5 Million, linking five million consumers with five million children in need.
At a recent symposium on social enterprise, Sam had a chance to share his M5M vision with Vicente Fox, ex-president of Mexico, and Dr. Muhammad Yunus, a Bangladeshi economist and Nobel Peace Prize recipient who developed the concepts of microcredit and microfinance. After Sam explained how his company uses a seamless distribution model that links networks of distributors and consumers all over the world willing to champion the M5M cause, President Fox jumped in and said it was the first time he’d ever seen the possibility of creating a global footprint in the new industry of social entrepreneurship.
Talking to Dr. Yunus, Sam found out that social entrepreneurship so far has been regionalized because of the distribution models that are being used—retail, banking, and vocational schools. “That’s because no one has ever used the network marketing distribution model,” Sam replied. Excited to be charting new territory, he is committed to showing how networkers around the world can bring sustainable change to ongoing global problems through the exciting new model of social entrepreneurship.—J.G.
Why did you initially choose the network marketing business model, and how does it tie in with your mission today?
In 1993, my wife and I were at a place in our lives where we really wanted a change. We had been entrepreneurs and in business all our lives. We’d been very successful, but at the end of the day, making money just wasn’t as fulfilling as it was cracked up to be. We really wanted to start something of significance, something that would make a real difference in the world. I was introduced to a group of doctors who had made an amazing discovery in plant science that would help pioneer the exciting new field of nutritional glycobiology.
The problem was, they couldn’t adequately communicate to the marketplace what this product was and how it could benefit people. So I explained to them how the network marketing distribution model could help overcome these issues: it can empower consumers to share both the science of the discovery and their own product experiences, which are invaluable in encouraging people to consider something as new and revolutionary as this discovery was.
Did being the founder of a thriving network marketing company fulfill your passion for serving?
At first it did, because we felt the impact we were making in people’s lives, just through the technology itself, and through the opportunity of sharing it with others. But it still felt like something was missing. My wife and I have a passion for fatherless children; we’ve adopted our five children from orphanages all over the world. In 1997, we were meeting with an orphanage organization based in Romania and the caregiver of this organization was thanking people for their financial contribution, explaining how she and her team had used the funds.
At the end of her talk, she said, “It’s heartbreaking to see what’s going on with our children. Many of them are sick all the time and in our organization we lose thirty to forty kids a year. If anybody knows anything that can make a difference, please let us know.”
Of course, I knew enough to realize that most of the issues her children were dealing with were linked directly to malnourishment. I went up to the caregiver, introduced myself, and said, “I own a company that has developed the most advanced real food product technology in the world today. It will radically impact the quality of life of your children. I’d like to just donate it to you and let you experience the benefits of food-based nutrition.”
She was very excited and we sent product to them immediately. She came back the next year and said, “What we have seen has just been overwhelming. Our kids are healthy and, for the first time in over a decade, not one child died in our organization.”
I’ve been rewarded in business every way you could possibly imagine, but nothing was ever as fulfilling as that statement by that caregiver that night. Somehow I knew that the destiny of our organization was tied directly to the needs of those children. To formalize a way of supporting them on a more frequent basis, my wife and I started a not-for-profit organization that could take the products we were developing in our for-profit company and make them available to the world’s most vulnerable children.
Like most not-for-profit organizations, ours worked off of the charity model, which means that we had to constantly go out and raise funds, but we were dedicated to doing that. For the next decade our business grew and our not-for-profit outreach expanded around the world to over eighty countries. We really felt that we were in alignment with our calling and our destiny.
Sam Caster shares nutritional supplement
with children in South Africa.
Guatemalan children standing in line
at school for their bowl of food.
From there, how did you get involved in social entrepreneurship? What triggered that transformation?
In 2006, Forbes magazine identified us as the fifth best small company in America. But something happened that same year that altered our course.
The FDA had created a much more narrow interpretation of what kind of health-related information the food industry could distribute to consumers. The FDA determined that any research findings that linked the benefit of a food or nutritional product to an improvement in health, or even an improvement of a biomarker of health, such as cholesterol levels, blood sugar levels, or blood pressure, without first getting your food product labeled and approved as a drug, actually constituted fraud. State and Federal agencies started aggressively implementing that more narrow interpretation and, as a result, in 2006 and 2007 hundreds of companies found themselves in the middle of litigation.
For instance, General Mills had shown scientific evidence that Cheerios, eaten on a frequent basis, could actually lower cholesterol. Well, under this new interpretation, that constituted a drug claim, so General Mills was instructed to cease and desist the distribution of that kind of illegal information.
Quaker Oats, same thing. They showed that eating oatmeal or oat bran could improve heart health. That’s a drug claim. You can “support” healthy cholesterol; you can “support” a healthy heart, but you can’t improve anything without classifying your product as a drug.
We found ourselves in a similar situation. We had miles of scientific literature that had been published on the benefits of our unique, glyco-based technologies and many of those articles related to specific health issues. That was determined to be a fraudulent activity. We were required to cease and desist the distribution of that kind of educational material. It brought our new customer acquisition program to a screeching halt, because that’s what our distributor base utilized to validate the benefits of our unique technology.
Almost immediately after that, in early 2008, the economy went through its meltdown in this country and globally, and this caused a complete disruption in our ability to raise funds for our not-for-profit. Within a six-month period, our little world was completely turned upside down.
For the next three years we struggled to find a solution to these challenges. We had created a unique culture within our business where caring, passionate people wanted their work to count for more than just making money. They wanted to be a part of bringing change into the world, bringing value into people’s lives, and it felt like they had lost the ability to do that.
How did you reinvent yourselves in a way that stayed congruent with the culture you had created?
It was very difficult, but in 2010, somebody sent me an article from Harvard Business Review entitled “Can Entrepreneurs Save the World?” Something about the title just drew me in. This article described a new model of doing business where entrepreneurs focus on global problems and come up with marketplace solutions that create sustainable change. Social entrepreneurship takes the cash flow and technology base of a for-profit and blends it with the heart, the passion, and the mission of a not-for-profit organization to provide long-term solutions to the world’s biggest problems.
So in late 2010 I went to our board of directors and said, “I think I have a solution for the direction we need to take the company to re-establish ourselves as a world leader, not only in nutritional science and real food technology, but a leader in making a difference in the world.”
Another article on social entrepreneurship listed four criteria for success:
Take on a global problem that no one has found a good solution to. The bigger the problem, the bigger the opportunity to create change. In our case, we knew we had the most advanced technology for addressing malnutrition. People used to think malnutrition was a developing world problem, but today it’s a global epidemic. In developing nations, it’s too little of the right kind of food; in industrialized nations like ours, it’s too much of the wrong kind of food. Both lead to the same devastating impact on children. In fact, up to one-half of all childhood deaths in the world are directly linked to malnutrition, making it the most devastating condition affecting children today.
Create an innovative solution to the problem. We believed that through our real food technology we had created the best solution to address the problem of under-nourishment and malnutrition.
Tap into the passion that people all over the world feel for your cause. To transform society, you are challenging the status quo. Yet the world’s biggest industries profit from this status quo and governments write laws to protect it. Generally, change of this magnitude can only come from people-based movements. That’s why it’s important to be able to tap into the passion that hundreds of thousands or millions of people around the world feel for what you’re doing.
Find a new way of compensating those people who are willing to champion your cause. This criterion distinguishes social entrepreneurship from the charity model where most are required to work for free. It helps bring professionals into your movement who can help you make a global impact.
I realized we met all four of these criteria; we had everything required for success. We just never put it all together.
Former Mexico President Vicente Fox
and Nobel Laureate Professor Muhammad Yunus
meet with Sam Caster at the
Social Entrepreneurial Symposium.
Vicente Fox with Sam Caster, Bo Short,
and Clark Diemer in Mexico.
How did you transition your company into this new business model?
When I shared this with our board of directors and senior management, then with our field leadership, everybody agreed this could be the transformation that would identify our unique position in the market place. We never felt a part of the charity model and we didn’t feel a full part of network marketing. We always knew we were just a little bit different but we loved the fit of this new model called “social entrepreneurship.”
The article in Harvard Business Review said that social entrepreneurship will become the most powerful, profitable, and purposeful business model of the twenty-first century because there’s nothing more important today than addressing the world’s most pressing challenges.
Once we knew that this was our new identity, we spent the next two years laying the foundation for how it would work. We looked at other companies that had adopted this model, for instance TOMS®. For every pair of shoes sold, they donate a pair. I thought, what a creative way to generate sustainable funding for your not-for-profit activity.
We sell our core technology all over the world, so what if every time we sold a product we would donate product to a child in need? It means we would never have to go out and raise money again. All we’d need to do is focus on building our business globally so we can link consumers worldwide to the needs of these children. That gave us the basis for our new brand and how we function in the market place. It’s called, M5M, Mission 5 Million.
I learned through UNICEF that five million children under the age of five die every year of acute malnutrition. What if we became the company that could solve that problem? Five million children sounds like a lot, but keeping it in perspective, it’s not. Approximately five hundred million people a year take a vitamin supplement that is synthetically made from petroleum. We have the unique opportunity of approaching that existing market and simply asking them to consider switching to a real food alternative. If they do, we can link their consumption to the needs of children.
Just one percent of that existing vitamin and mineral market would give us five million consumers. Connecting those with five million children would help solve the most devastating challenge children face in the world today.
In the old model, companies have to make a profit first before they can make a donation. But this new model kind of turns things around: donating happens before the profit shows up. Tell us about that.
A couple of weeks ago, I was invited to a symposium in Mexico by the former president of Mexico, Vicente Fox. He had brought together leaders to discuss how social enterprise could create sustainable transformation in nations around the world. It’s different from cause marketing, where for-profit companies take part of their profit and donate it to charity.
One of the guest speakers was Muhammad Yunus, who is the poster child for the whole movement. He won the Nobel Prize in 2006 for his invention of the microloan, which has become known globally as the number one strategy for fighting global poverty.
One of the things Muhammad Yunus pointed out is that charity dollars can only be spent one time. Same thing with welfare dollars. Social entrepreneurs say, “Let’s use a for-profit entity to create sustainable change,” and their giving comes from the top-line, not the bottom-line. In our case, we match the sale of our products directly to our mission. Our giving is not tied to our profits because it’s our commitment to solving the problem that drives our business, not the ability to make a profit. But of course, profit is a key part of the organization, which is why social entrepreneurship can facilitate sustainable change instead of just temporary change, while continuing to expand.
That’s brilliant, and the way you make it work is in addition to your company’s commitment to the cause, you also tap into the commitment of consumers who choose to participate.
Yes. Here’s what I found: giving changes everything. Officially converting our company from the network marketing model to the new model of social enterprise has opened the door for a lot more people to participate.
Muhammad Yunus said the biggest obstacle to getting people to consider taking a microloan from the Grameen Bank—the social entrepreneur venture that earned him the Nobel prize— was the public’s perception of the lending industry in Bangladesh.
First of all, all Bangladeshis knew was moneylenders took advantage of people and put them into bondage and slavery. Dr. Yunus said it was just a horrible perception, and the way banks were perceived wasn’t much better: they were known to fund large organizations that, again, took advantage of people. The lending instrument itself, creating a loan, was not the problem; only how it was used. So he took what was good about the banking industry, which was the ability to generate a loan, plugged it into the social entrepreneur model and created value for people.
“To help change the public’s perception, we did everything just the opposite of traditional lending,” he said. “The banking industry required credit checks; we didn’t. The banking industry required collateral; we didn’t(1). We just wanted to put people into business for themselves. We believed that, given the opportunity, they would choose to work themselves out of their hopelessness.
“The banking industry makes you come to them and then justify why you are worthy of a loan.” Dr. Yunus said, “We had to completely turn that around. We went into the villages and petitioned people on why they were worthy of having a life of significance and offered them a vehicle to achieve it.”
What I found in network marketing, particularly within the last decade or so, is a lot of new companies are business-opportunity oriented rather than product-oriented. One major trainer even broadcast that it doesn’t matter what your product is; if you’ll just become skillful at recruiting, training, and personal development, you can become successful regardless of your product.
This has created a perception in the marketplace that network marketing is all about money, all about a quick financial fix. In 2011, Inc. magazine in their cover story on social entrepreneurship, said, “The model works best when your product is the vehicle that triggers social change.” So we are taking what’s good from that old model and moving it into the new model of social entrepreneurship. If the network marketing model advocates that to become successful you need to become better at recruiting, we flip that around and say, “You need to become better at giving!” In fact, we tie our compensation directly to the number of children you help us impact.
How do you teach this new model to your network?
This new paradigm allows you to talk to anybody, anywhere, and have a meaningful conversation about what you are doing to help change the world.
One of the top network marketing trainers recently joined our team and said, “Here’s what’s refreshing about this. For 25 years I’ve had to teach distributors how not to answer the first question every prospect asks, ‘What is it?’ Nobody wanted to answer that question in the old model for fear of immediate rejection. In the social entrepreneur model, that is the one question you want everybody to ask because it allows you to tell them about your mission and why you need their help.”
Again, giving changes everything. You can talk to anybody about helping children. I’ll give you an example. The first time I met President Vicente Fox was at a fundraiser here in Dallas, Texas. I’d never met him before but when I went up to shake his hand, he said, “Who are you and what do you do?” I said, “I have a social enterprise that has developed the most advanced technology for addressing childhood malnutrition and our business model actually creates its own funding to bring sustainable relief to the epidemic of childhood malnutrition.”
His question to me was, “How are you going to do it in Mexico?” Immediately we were engaged in a conversation that was important to him. I said, “Actually, I’m looking for a distribution partner in Mexico that can help me reach the most vulnerable kids in your country.” He said, “My wife and I have a foundation. Do you think we might qualify?”
Now, I can guarantee you President Fox would not have been on anyone’s list of people to talk to in the old model. He’s just too important, too big, too busy, but when you start talking about impacting the lives of children, you can talk to anybody. By the way, President Fox and his wife did become our distribution partners in Mexico.
It completely changes the conversation. Everybody wants to be a part of something bigger than themselves.
It is a much more meaningful conversation to have with your family, with your friends, with people you know. Part of the problem in the old model is nobody wanted to talk to their warm market because of that fear of rejection. Nobody rejects you for wanting to help children.
I’m also excited about the fact that the networking distribution model can radically impact social entrepreneur organizations all over the world. I read an article recently that said the next goal for social entrepreneurship is to figure out how to include more people globally in championing these causes. Our model provides the first business solution to that challenge because we can seamlessly link people from all over the world who are interested in doing what we do.
In our program, everybody you talk to can make a direct impact, because every consumer feeds a child. We give M5M wristbands to our “Champions” that show the different thresholds of achievement, based on the number of children they are helping to nourish.
The first threshold is fifteen kids. In South Africa, we have “soup moms” who make a daily soup or porridge for fifteen or twenty kids a day. We give them a powdered blend of our real food supplement to put into that soup and make it the most nourishing food those children will ever eat. The next threshold is sixty kids, which represents our average orphanage. Then 200 kids, which represents a community feeding program. Then 600 kids, that represents a regional impact. Our compensation plan substantially increases the rewards for each new threshold a Champion achieves.
Back in 1993, when we were trying to figure out how to make a difference in the world, I never once considered there was actually a single business model that could fulfill that sense of destiny. It took a few years to figure it out, but now that we have, I think we’re going to change the world.
I love it. Sam, this is exactly what Chris and I had in mind when we came up with our tagline for Networking Times, “Moving the Heart of Business®.”
Social entrepreneurship combined with network marketing gives an ordinary person in the world the opportunity of being part of an extraordinary transformational program. The thing I love about social entrepreneurship is that while wealth is not the goal of the mission, it is the byproduct of succeeding in the mission. In other words, we’re all for people making money; it takes profitability to create sustainable change. Everybody wants to make a living by doing something significant, and that’s the opportunity our Champions have. I believe that impacting five million children is just a starting point. When this catches on, we’re going to help revolutionize the way the world solves problems.