PROVO — Blake Roney was in his mid-20s when he first applied a revolutionary face cream to the volunteers lying on his sister's basement floor.
Self-conscious about his own appearance, he worried he looked too young to be taken seriously as a leader of a new, multilevel marketing skin-care company that claimed to have a cream that could smooth away your wrinkles in half an hour.
But now, celebrating 25 years of riding the ups and downs of building an international, billion-dollar business, a head of white hair makes Nu Skin's chairman of the board finally look the part. And the company, headquartered in a 10-story Provo office building, has certainly outgrown Nedra Roney's basement.
Nu Skin has more than 755,000 independent distributors around the world and 6,500 employees — 1,200 of whom work in Provo. That makes Nu Skin the fourth-largest company headquartered in Utah, according to the Utah Business magazine, and one of the biggest multilevel marketing companies in the world.
In 2008, Nu Skin surpassed $6 billion in total revenue, with a record $1.25 billion in sales. The success of Nu Skin, which is not without its critics, has given birth to a host of other multilevel marketing companies along the Wasatch Front — including Tahitian Noni International and XanGo — which have become key drivers of the state's economy. The company recently celebrated its 25th anniversary with a giant birthday cake and gifts to the community.
"They're one of the first multilevel companies to be successful internationally," said Lew Cramer, CEO of Utah's World Trade Center, an organization that helps Utah companies expand globally. "They did a marvelous job rolling out their products around the world, and as a result, they were followed enthusiastically and aggressively by others. They were a fantastic pacesetter. And many people who were involved in Nu Skin have gone on to other companies. Many MLMs have been more accepted in the United States because Nu Skin made such progress as a company."
In the good old days (back in 1984) Nu Skin's founding leaders would grab anyone they could find — the lady at the supermarket, the girl in the parking lot, a guy at a gas station — and bring them to late-night product demonstration meetings.
Blake and Nedra Roney were there, along with Nedra's old schoolmate from BYU, Sandie Tillotson — now Nu Skin's senior vice president — and Blake's buddy, Steve Lund, vice chairman of the board of directors, who was then just starting out as a lawyer.
They didn't have much, just a few homemade pamphlets and their products, packaged in bottles that arrived from Texas still covered in someone else's labels. They spent hours removing each label by hand, and by the end, their fingertips ached from all of the chemicals.
"We were all really resourceful," Blake Roney says about the early days.
They carefully applied their "face lift" concoction, made with Nu Skin's trademark "all of the good and none of the bad" ingredients, to half of their subject's face. The ointment would crinkle up, "and make you look 90 years old," said Lund's wife, Kalleen. "Then you'd wash it off and have a really smooth face. It was like a face lift without surgery."
By the end of the meetings, which sometimes ran past midnight, "you could see a difference," Blake Roney says.
Roney used his persuasive skills to persuade Steve Lund to quit his law firm job and join the company, despite the fact that the move made Kalleen's heart pound.
"He approached me about doing some free legal work in exchange for some worthless stock in this start-up company," Steve Lund says. "It turned out to be a really good deal. … It was a leap of faith. I'm surprised I made the leap, but it was the right thing to do."
Now Roney and Lund are known as "Blake-and-Steve," a single entity that runs the company in near lock step. They work together, vacation together and even live in the same neighborhood.
Today, the company is viewed as one of Utah County's greatest homegrown success stories. But it hasn't all been easy — 90 percent of network marketing companies fail.
"In the early days there weren't a lot of clear rules and guidelines about how to do things," said Gibb Dyer, the O.L. Stone Professor of Entrepreneurship at BYU's Marriott School of Management. "A lot of the major guidelines about how to do network marketing and how to do it right have been established by the folks at Nu Skin and their experience."
For example, in 1994, the Federal Trade Commission issued an order that required the company to have reliable, scientific evidence to support their claims on any product they sold. In 1997, Nu Skin settled on paying a $1.5 million penalty to the FTC to resolve their claims about a weight-loss supplement that was potentially in violation of the 1994 order.
Now Nu Skin employs more than 100 scientists to validate and improve its products.
"We had a lot of people saying that we would fail, but we kept plugging along," Tillotson said. "I like to say that the only reason Nu Skin is here today is because Blake and I never quit — on the same day."
The company maintains an A-plus rating with the better business bureau, but it's not without its critics. Jon Taylor — a former Nu Skin distributor who now maintains the site mlm-thetruth.com — says not enough people complain about companies like Nu Skin, which depend on a vast network of independent sales operators to function, and in some cases are nothing more than a pyramid scheme. Taylor says the only people who really buy products from companies like Nu Skin are the distributors who sign up as salespersons.
"MLMs are essentially dependent on an endless chain of recruitment of participants as primary customers. It's the same principle as a chain letter," Taylor says. "MLM as a business model is inherently flawed, uneconomic and fraudulent. I can say that with 100 percent certainty. I haven't found exception to that yet."
Despite Taylor's warnings, the allure of making a lucrative income — Tillotson says Nu Skin creates a millionaire every five days — has attracted many who have sometimes succeeded, sometimes failed and sometimes gone on to create their own network marketing company.
It's that progress that Blake Roney, Tillotson and Steve Lund celebrated this week, progress they've used to create several charitable organizations, one of which provides 80,000 meals every month to malnourished children in Malawi.
That effort is something Blake Roney is particularly proud of, even more than his mysterious face creams.
"This whole business was made to improve people's lives," Blake Roney says. "We want to do more good than any other company on the planet."
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