Planet Fitness, Inc., the fastest-growing fitness club in the world, is making wellness Affordable and Accessible. Every entrepreneur can expand their market by applying the Planet Fitness formula to their own wellness product or service.

 

In just a few short years, Planet Fitness has grown to 350 franchised locations, $500 million annual sales, and 2.3 million active members—with 2,000 locations and 10 million members just around the corner. Here’s how they are doing it! 

The Wellness Revolution has come a long way since I first began following wellness in the 1990s. Industry sales have risen from $200 billion in 2002 to approximately $700 billion today, and are on target to reach my 2002 projection of a $1 trillion wellness industry in 2012.

 

However, one of the trends that I projected in 2002 is not happening at the pace I would have hoped. Wellness is not rapidly becoming more affordable and accessible to the mass market.

 

Wellness products and services have not become more affordable because most wellness providers haven’t seen the need to lower their prices. Why fix something that isn’t broken? The demand for wellness has soared, mostly from existing customers. Aging, upscale baby boomers keep buying more new wellness products and services. Billion-dollar wellness brands like SILK! soymilk and Nutralite vitamins have thrived right through the toughest economic times in recent history.

 

Equally sad, wellness has not become more accessible to the mass market. Not only is wellness still expensive, healthier foods and better exercise options are generally only available in middle-to-upscale neighborhoods and/or with a chic lifestyle. Many ordinary consumers feel intimidated by the wellness movement. This is causing the U.S. to continue to bifurcate into a “have” and “have not” wellness society.

 

In 1845, Benjamin Disraeli, the future prime minister of England, warned of the danger of his country disintegrating into “two nations divided by great want as though they were dwellers in different zones or inhabitants of different planets.”

 

While Disraeli was speaking about economics, this bifurcation is now true in the United States based on wellness. Today, in the United States we have largely replaced race, gender and country of origin discrimination with a new type of discrimination based on your health, and particularly your waistline.

 

The total numbers are staggering. Although obesity has risen to the number one issue in the media and is even the subject of popular television shows, the percentage of overweight Americans has continued to rise. The percentage of Americans currently overweight or obese has risen from 61% in 2002 to 68% in 2008—that’s 21 million (7%) more Americans not living their lives to their fullest potential due to a lack of wellness.

 

Fortunately, there are bright spots in the wellness industry dedicated to making wellness more affordable, and more accessible, to the 206 million (68%) overweight Americans who so desperately need wellness. One of these bright spots is Planet Fitness, Inc., the fastest growing fitness club chain in the world.

 

Planet Fitness – Making Wellness Affordable at $10/month

 

The first thing you notice about Planet Fitness is the price: $10 a month. While other fitness clubs typically charge $30 to $80 a month for membership, anyone can join Planet Fitness for $10 a month. At that’s a true $10—no contracts (cancel anytime without charge), no gimmicks, and not a loss-leader to get you in the door to sell you something else. The price is $10/month with no contract at all locations—including downtown Manhattan and Los Angeles.

 

I was skeptical when I first heard about Planet Fitness. They had invited me to speak at their annual convention of franchisees. How could they run a profitable business at $10/month when their competitors charged 3 to 8 times as much?

 

I quickly learned that Planet Fitness had re-engineered hundreds of processes and costs related to managing a fitness club franchise location, and in doing so has probably re-engineered the future of the retail franchise industry itself.

 

For example, one re-engineered item is how each Planet Fitness store franchisee collects and processes revenue. Customers are required to have a checking account, debit card, or credit card—revenues are collected via EFT (Electronic Funds Transfer) daily by the home office and instantly credited to the franchisees sub-accounts on a website. This not only saves millions in bank fees and shrinkage, it frees the franchisees from hiring expensive bookkeepers and accountants. Planet Fitness told me that its average monthly overhead per location is $15,000 below the industry average, partly due to its innovative financial controls.

 

With headquarters managing the cash and applying sophisticated marketing and management tools to each franchisee’s business, franchisees end up concentrating on their customers versus their back office. When’s the last time you asked to see the manager of your gym and found him out on the selling floor or working with members, versus back in his office looking at numbers?

 

Since becoming familiar with Planet Fitness, each time I enter a Subway restaurant or any other franchised business, I keep thinking of how much work they probably have to do in bookkeeping and re-stocking after each transaction—and how much they could save if each franchisee had its complete financials and parts of its operations managed by corporate headquarters via technology.

 

Franchising began in the middle ages as a way to expand your business to far away locations. It was greatly improved upon by franchise pioneers like Albert Singer (Singer Sewing Machines, 1851), Colonel Harland Sanders (Kentucky Fried Chicken, 1930), and Ray Kroc (McDonald’s, 1954). But, little has changed the past few decades in retail franchising, especially in the traditional fitness club franchise business which began in the 1950s with Jack LaLanne and Vic Tanny.

 

Since 2001, a web-based revolution in real-time communication and online marketing techniques has made overnight billionaires of the founders of Facebook, MySpace, and Google. Few of these innovations and techniques, however, have migrated to the traditional franchise business model that dominates the American retail landscape. Great fortunes today await those retail entrepreneurs, like the owners of Planet Fitness franchises, who get there first. According to the company’s  website, the average Planet Fitness franchisee earns $546,000/year in profit versus an industry average of about $110,000/year.  

 

Planet Fitness – Making Wellness Accessible by Making First-Time Wellness Customers Comfortable

 

In a 2008 cover story in Club Business International magazine, I explained,

 

“Health clubs have done a good job of building out distribution—but they’ve done a terrible job of turning those who need their services the most into customers. They’re preaching to the choir—sitting back and waiting for prospects to walk through the door. Operators need to reach out to individuals who never in their life have stepped foot inside a club and make them feel welcome. Just look at the outreach that some of the mega-churches are doing—offering prime parking and seating to first-time visitors; they make them feel very welcome. Clubs need to create new demand—particularly given the current obesity crisis.

Paul Zane Pilzer, Club Business International, May 2008

 

Planet Fitness has done an outstanding  job creating new wellness customers by:

1.   Creating a Judgment Free Zone

2.   Driving away undesirable customers

3.   Best Business Practices 

 

1.   The Judgment Free Zone – The second thing you notice about Planet Fitness (after the price) are the large signs in each location proclaiming “Judgment Free Zone” or JFZ. This is what separates Planet Fitness from other gyms. Everything from the training of personnel to the equipment itself is tailored to make the first-time gym user feel extremely comfortable. They have to—since members sign no contracts and are free to quit anytime. Managers conduct free classes every morning showing members how to use the equipment, and instructional videos pervade the gym.

2.   Driving away undesirable customers - In order to make first-time gym members feel most comfortable, Planet Fitness makes a special attempt to drive away bodybuilders, power lifters and other extreme fitness enthusiasts—the traditional customers of most gyms. Planet Fitness does this by limiting the available weight amounts and having a “Lunk Alarm” siren with a spinning light that sounds when a customer drops a weight, does unapproved lifts, or judges someone else. The company has had lawsuits from former customers whose memberships were terminated after continually setting off the Lunk Alarm. Funny videos abound on YouTube of the Lunk Alarm going off. A lunk is someone who is “slamming his weights, wearing a body building tank top, and drinking out of a gallon water jug."

3.   Best Business Practices - Most American consumers have had a bad experience with the business practices of a fitness club. It’s obvious why—the algorithm for success at some gyms is to sign up as many members as possible under long-term contracts, and then hope they never show up at the gym. The Planet Fitness model is exactly the opposite: Customers pay $10/month with no contract and can cancel anytime. This makes the goal of each Planet Fitness manager to make sure that: (a) customers continually use the gym; (b) members always have a comfortable experience; and (c) concerns are always resolved to the customer’s satisfaction.

Ever since Ponce De Leon discovered Florida while searching for the Fountain of Youth, the efficacy of wellness products and services has been in doubt by most consumers. Now that technology has finally yielded real efficacious wellness solutions like diet supplementation and exercise, it’s important that all wellness suppliers adopt fair, honest best business practices. It’s hard enough to teach consumers the true benefits of wellness without having dubious business practices such as asking customers for a financial commitment that is not tied to their results.

Future articles will continue to examine the opportunity for entrepreneurs, and explain what employers and employees should do now. Visit me on Facebook

On Thursday, March 25, the U.S. House of Representatives passed the H.R. 4872 (the "Reconciliation Bill"). This bill modified the Health Care Reform bill signed by President Obama on March 23 as noted in my previous blog posts. Regardless of my or your political opinion on Health Care Reform, it is now the law of the land.

The U.S. federal government effectively now:

 (1) Mandates that everyone get health insurance; and

 (2) Defines what is health insurance--what specific procedures, drugs, and treatments must be included in every health insurance policy.

If you are a medical provider today, or are considering becoming a medical or wellness provider, this could be the greatest entrepreneurial opportunity of your lifetime.  

Here's just one example. Beginning September 23, 2010, health insurance policies must cover with No Deductibles and No Copays (i.e. 100% free to the patient) preventative and wellness care. Just think what this one provision could mean to a manufacturer of breast cancer screening devices, or to a chain of medically-supervised weight loss clinics. You now have 300 million potential customers, at hundreds or thousands of dollars each, and each customer has 100% of their services paid for by their private or federal health insurance carrier.

The final details of what is, and is not, included in the list of mandatory free preventative services will be issued by the U.S. Department of Health and Human Services (HHS). But, just to whet your appetite, here is a list of thousands of preventative treatments ranging from obesity screening to smoking cessation programs that HHS could include on what must be covered.

I'll be writing more on this in the coming weeks. My next blog posting on Health Care Reform will be what employers and employees should do now regarding employer-sponsored health benefits.

"While I personally did not support President Obama on U.S. Health Care Reform, such reform is already proving very good for my business (Zane Benefits) and for many entrepreneurs in health care and wellness. I feel today like an arms manufacturer on December 7, 1941."
                                                                                         Paul Zane Pilzer, March 23, 2010

Note: Zane Benefits has posted a technical article summarizing the impact of health care reform on insurance agents, employers, and employees, including which changes take place in 2010, 2011, and 2014.

On March 23, 2010 President Obama signed into law H.R. 3590 - the Patient Protection and Affordable Care Act (the "Senate Bill") which mandates sweeping changes in U.S. health care and health insurance. The U.S. Senate is currently debating the Health Care and Education Reconciliation Act H.R. 4872 (the "Reconciliation Bill") which makes modifications to the Senate Bill as described herein.

Here's how this already-passed legislation will impact small (2-50), medium (51-200), and large (>200) size employers and their employees.

Changes in the Individual / Family ("Personal") Health Insurance Market
First and foremost, new insurance regulations prevent health insurers from denying coverage to individuals or charging more based on their health status or gender. These regulations also mandate that health plans provide a very generous list of services (i.e. a federal government formulary), cap annual out-of-pocket spending for participants, impose no annual or lifetime limits on coverage, and, beginning September 23, 2010, offer preventive (wellness) services with no copays or deductibles.

These new mandates, while laudable in their intent for consumers, will significantly increase the cost of health insurance (before federal subsidies) for the majority of U.S. taxpayers. If you are among the 25% of U.S. households earning more than $88,250 a year, your current cost for health care will potentially double. Below $88,250 a year in income, the new legislation caps your health care cost at 2% - 9.5% of your income for premiums and $0 - $5,950/person/year for out-of-pocket expenses.

The net effect of these federal subsidies for employers is that when you switch from group to personal policies the federal government is insuring that each of your employees can afford health insurance at widely varying cost based on their income.

Small Employers (2-50 employees)
Small employers in the U.S. employ more than 50% of American workers and are responsible for the overwhelming majority of new jobs. More than 55% of small employers today do not offer health insurance-because of cost. Both the Senate Bill and the Reconciliation Bill impose no penalties or mandates on small employers to offer health insurance. Congress seemed to recognize that any increase in employer mandates would cause small employers to hire less workers and/or substitute more technology for labor in the workplace.

Most importantly for this sector, health care reform is dramatically accelerating the switch of small employers from group to personal (individual or family) health insurance. While personal health insurance has grown from covering 12 million people in 2002 to 35 million people in 2009, the reason 45% of small employers still offer group plans is because, in 45 states, employees with pre-existing medical conditions were unable to obtain personal insurance.

This is no longer the case. Beginning 2014, insurance carriers must accept all applicants at the same price regardless of health status, and beginning 2010, there is a new federal "risk pool" to guarantee coverage to people who do not have health insurance and cannot medically qualify or are charged more for traditional medically-underwritten personal policies.

Moreover, recent federal legislation allows employers to pay for personal policies with pre-tax dollars, and new Treasury regulations allow employees to use pre-tax salary to reimburse themselves tax-free for personal policy premiums. These two changes have the practical effect of reducing by 20%-50% the after-tax cost of personal policies for employees and employers.

Thanks to health care reform, small employers with group plans in all states can now cancel their group plans and switch to giving each employee a pre-tax allowance to purchase their own personal policy-while being assured that all their employees can get and afford personal health insurance.

A company I founded, Zane Benefits, is the leading supplier of software administration platforms that allow employees to pay for their own personal health insurance with pre-tax employer and/or payroll-deducted funds. Thanks to health care reform, we have experienced a significant increase in business from employers (and their agents) seeking to switch employees from their group plan to personal policies, or at least offer employees the opportunity to save 20%-40% on health insurance by paying for their personal policies through pre-tax salary reductions.

Medium Employers (51-200 employees)
Medium-size employers were not as lucky as small employers when it comes to health care reform. For employers with 51-200 employees, the health care reform bill signed into law on March 23, 2010 mandates a $750 per employee annual penalty for employers that do not offer (and substantially pay for) health insurance. The Reconciliation Bill would raise this $750 per employee penalty to $2,000 per employee (less an exemption for the first 30 employees).

Most medium-size employers who currently do not offer health insurance will simply pay this penalty rather than increase their operating costs by approximately $10,000 per employee for health insurance. Medium-size employers who do currently offer health insurance face an expected doubling of their health insurance costs, from $5,000 to $10,000 per person per year, due to the new federal mandates on coverage.

This creates a choice for all medium-size employers of either paying the penalty or paying a much greater cost for health insurance. The penalty along with new health insurance mandates could have a devastating effect on new U.S. job creation and employment at a time our economy can least afford it. A $750-$2,000 per employee penalty, and/or a doubling of employer health insurance costs, will force many medium-size employers to move jobs overseas, create less new U.S. jobs, and/or substitute more technology for labor in the workplace.

Additionally, think about employers with 49-50 employees seeking to expand. The addition of a single employee could cause their company to incur a penalty of up to $100,000.

Large Employers (>200 employees)
Large employers fared the worst in health care reform. Those large employers who cannot  afford to offer health insurance face the same ($750-$2,000) per employee penalty as medium size employers. And those large employers who currently offer health insurance will face an expected doubling of their health care costs due to the new federal mandates on what must be covered and no lifetime limits on coverage.

Moreover, large employers are required to automatically enroll employees in their lowest cost health plan if the employee does not choose coverage or does not specifically opt out of coverage. For each employee who chooses to opt out of employer coverage, employers are charged a $3,000 annual fee up to a maximum penalty of $750 ($2,000 with the Reconciliation Bill) times their total number of employees.

Among the new federal mandates for coverage, I am troubled by the potential cost of the mandate requiring no lifetime limit on coverage. Prior to health care reform, most states already mandated a per-person minimum lifetime maximum on health insurance benefits ranging from $3 million in Texas to $6 million in California. States typically required insurers operating in their state to re-insure their catastrophic risks, and Wall Street practically required large employers to purchase re-insurance on their catastrophic risks. Re-insurers, such as Lloyds of London, were only able to re-insure carriers and large employers because there was a defined maximum amount of lifetime benefits. 

From a practical standpoint, very few people could ever come close today to utilizing $3 or $6 million of medical costs. The new federal mandate for no lifetime limit may cost Americans hundreds of billions for very little benefit, and may even be unobtainable in the re-insurance marketplace. The federal government should move now to either change lifetime maximum benefits to a practical $3-$6 million amount, or offer carriers and large employers the re-insurance they need to comply from the U.S. Treasury at minimal cost.

Summary
Health insurance reform is here to stay. I do not expect this legislation to be repealed, or successfully challenged in the courts.

Like most government programs of the past, health care reform will create enormous opportunities for entrepreneurs. I plan on exploring these opportunities in future articles and perhaps an entire book. As always with change, those entrepreneurs who get there first will reap the greatest rewards.

While I personally did not support President Obama on U.S. Health Care Reform, such reform is already proving very good for my business (Zane Benefits) and for many entrepreneurs in health care and wellness.

As a businessperson, I feel today like an arms manufacturer on December 7, 1941. Only time will tell us as a nation whether health care reform was worth the financial cost. To quote Tiny Tim (Charles Dickens), "God bless us, every one!" 

Reducing the cost of health care is the greatest short-term entrepreneurial opportunity of this century

What Employers and Employees Should Do Now

U.S. Health Care Reform Update
Washington has just spent a full year attempting to revamp U.S. health care with few results, and with only a minority of Americans supporting radical change. The reason is because the majority of working (and voting) Americans are satisfied with their U.S. health care except for two items: Rising Cost and Lack of Portability. This majority wants affordable health benefits that they can keep when they change jobs, are in-between jobs, or retire early (before age 65 when they become eligible for Medicare).

Instead of listening to the majority of working, taxpaying Americans, our legislators listened mostly to lobbyists for medical providers and special interests. By December 25, 2009, the House and Senate had passed bills that would have dramatically changed health care for every American citizen, whether the citizen wanted it changed or not.

But then, just as a final, reconciled bill was being finished for the signature of the President, the majority of Americans spoke. And they spoke loudest in Massachusetts in a special election called to replace the seat of the late Senator Ted Kennedy, the original architect of U.S. health care reform. On January 19, 2010, in a Boston Tea Party heard all the way to Washington, Massachusetts elected Republican Scott Brown to the U.S. Senate, ending the supermajority the Democrats needed to pass reform without any Republican support.

Thanks to the people of Massachusetts, our legislators are now listening. The election stopped U.S. health care reform dead in its tracks. Every senator and every congressman now realizes that their seat, too, could soon be lost, unless they listen to the majority of their working constituents who don't want any changes in their health care except for lower cost and/or increased portability.

The Coming Opportunity for Entrepreneurs
This is very exciting for entrepreneurs--because reducing the cost of medical care could soon become the greatest short-term entrepreneurial opportunity of this century.

This is because:

(1)  The U.S. health care industry is our largest economic sector, exceeding $2.5 trillion annually; about 1/6 of the total economy.

(2)  The cost of U.S. health care has been growing several times faster than the overall economy--from less than 5% of GDP in the 1960s to an expected 20% of GDP in 2010. If this rate of growth were to continue, the U.S. economy would be bankrupt by 2020.

(3)  There is an enormous backlog of unimplemented RITs (Ready-to-be-Implemented-Technological Advances), simply "better methods", in every area of U.S. health care. These range from the byzantine paper-based way doctors currently schedule their appointments, to their bazaar-like billing system where five different patients are charged five different wildly-varying prices with no disclosure to anyone (i.e. no transparency).

However, over the long term the greatest opportunity to reduce the cost of medical care is to implement wellness programs that prevent illness from developing in the first place.

Walk into any hospital, medical provider's office or pharmacy and you can see immediate opportunities screaming for improvement. Just implementing a patient EMR (electronic medical record), which would give a doctor instant access to a patient's prior medical history, could increase a doctor's bottom line by 50%, improve the quality of care for the patient, and save our nation hundreds of billions of dollars.

This great opportunity to reduce medical cost already exists for social entrepreneurs outside the United States. The most popular operation in the United States is a simple lens replacement for a cataract. In the U.S., this operation costs about $3,500 per eye including $875 for the lens. Outside of the U.S., the world's 63 million blind people with cataracts don't have $35, let alone $3,500, to spend on lens replacements. To serve them and eliminate preventable blindness, Dr. Geoff Tabin and his associates profitably deliver cataract operations in Africa and Asia for $20 per eye including the $8 cost of his own lens that he manufactures in China. Read closely how he does this here in my book, and in the January 2010 National Geographic Adventure Magazine, and your mind should start churning with social and profit-making entrepreneurial opportunities to reduce medical costs.

Currently, in the U.S., there is no great immediate opportunity to reduce actual medical costs because the current U.S. health insurance system provides the opposite ("perverse") incentives to medical providers, and has no system of transparency to even monitor costs. Thanks to the people of Massachusetts, I'm now optimistic that this will change when Congress returns to the issue of health care later this year. The cost of health care is the elephant in the room when it comes to balancing our budget and reducing our enormous deficit.

Everyone should be loudly telling their elected officials to stop pursuing their personal social agendas or caving in to lobbyists for Big Pharma and other medical providers. Washington should simply focus on what most Americans want out of U.S. health care reform:

(1) Reduced cost; and

(2) Portability--access to health insurance regardless of employment or preexisting medical conditions.

There is today an immediate opportunity for most employers and employees to significantly reduce their cost of health care, and even obtain portability--by focusing on their health insurance program and taking advantage of several tax and insurance reforms that were quietly passed in 2005-2007 but are first taking effect in 2009-2010. This is especially true because during the past year many employers and employees delayed making important decisions on their health benefits.

The implementation of these reforms answers one of the most frequent questions I'm getting today from employers: "Now that U.S. health care reform has stopped, what should we do for health benefits at our company, or for our family?"

If this subject is of interest to you, read my companion article to this blog post at ClarifyingHealth.com by clicking on the link below.

What Employers and Individuals Should Do Now - Use Your Payroll System to Save 20%-50% on Your Health Insurance

This blog post should be read as an addendum to my previous post.

My wife and I have returned from China. It was a life-changing experience--underscored by the fact that my wife is hiring Mandarin tutors for our four children.  

Entrepreneurs worldwide should not underestimate the impact of China on the world economy and on their own business. Many if not most of the products you purchase already come from China, and China is now emerging as the world's largest consumer.

Entrepreneurs who embrace this phenomenon first will reap the greatest rewards.

During the past decade, China established itself as the world's foremost manufacturer-a significant percentage of the products you now purchase come from China. During the next decade, China will establish itself as the world's foremost consumer. As a result, leading companies will be economically forced to customize their products for the Chinese. This is because, as the Chinese consumption market matures, China will be setting the world's standards on products from automobiles to light bulbs, just as the United States set the world's standards on most consumer and industrial products since the 1950s.

China is now the 2^nd largest economy (PPP) in the world and is passing the U.S. in many areas. For example, 13 million new cars were sold in China last year while only 10 million new cars were sold in the U.S., and this disparity will further widen in 2010. Happily for the U.S., 20% of the automobiles sold in China come from U.S. manufacturers.

We have much to teach the Chinese, especially those of us who are entrepreneurs. The Chinese do not suffer from the "not invented here" syndrome that is so prevalent in the west. As they provide their citizens with everything from cars to washing machines, the Chinese prefer to learn from, and partner with, experienced providers outside China, rather than learn everything themselves from scratch.

Peking University (12/10/09)

Moreover, in the west we can learn the most about ourselves and how to improve our lives by studying this fascinating modern civilization. As I was advising the Chinese in my areas of core competency--education and healthcare--I learned much about what my own companies need to do to remain successful.

One simple example of this is the traffic signal light most of us drive under every day. In the U.S., traffic signals are red, yellow and green. In China, they are larger red and green numerical displays (no yellow) counting the number of seconds until the signal will change. There's no running to make a yellow light-you know exactly how much time you have before it changes. Like waiting for an elevator with a floor indicator, it's more relaxing to know exactly how much time you have left. Since returning from China, each time I wait at a red light I wonder if whoever purchases red/yellow/green traffic signals in my city knows how much better numerical displays would be for us.

I returned from China to watch the Senate pass their version of health care reform. As I write today, the personal staffs of Senator Harry Reid (Senate Majority Leader) and Representative Nancy Pelosi (Speaker of the House) are meeting in secrecy with White House officials to iron out the differences between the respective House and Senate bills. My views on the House version are outlined in my previous posts here and here, and I will writing more about what this means for all of as details emerge.

Since writing my last post on China, I received inquiries from readers wanting the agenda of my trip, and inquiries wanting to learn how they could bring their product of service to the Chinese market. I will answer the questions here on my agenda, and I plan on making "Developing your Business in China" a regular feature of The Entrepreneurial Challenge blog.

On December 7, my official public visit began with my speaking from the center podium in The Great Hall of the People. This magnificent building, built in 1959, is functionally equivalent to the U.S. Capitol. It sits amidst both thousand-year old historical structures and the world's most modern office buildings. My speaking topic was on the importance of wellness and why we, in the west, need a revolution from the tyranny of the food and medical industries which have caused most of the problems with our health.

On December 8, I delivered the keynote address at the Fourth Food & Nutrition Industry Forum in Beijing, opening the event. I spoke about The Wellness Revolution in the west, and the opportunities for the Chinese wellness industry inside and outside China. While China is not a significant player today outside China in wellness, China has much to contribute to the wellness industry worldwide. Chinese wellness and preventative medicine, often called Traditional Chinese Medicine or TCM, has been pervasive in China for centuries. I visited Chinese hospitals where western medicine and TCM doctors work together in the same office for the benefit of the mutual patients.

On December 10, I spoke at Peking University to 4000-students, selected (50 each) from many of China's other leading universities. My speech was on "Economic Alchemy" and my 1990 book "Unlimited Wealth."  The Chinese have embraced my economic theories about technology driving economic activity (W=PxT) more than any other nation since Japan.

The Great Hall of the People (12/7/09)

Between these major speeches, my wife and I met with Chinese federal officials, provincial governors, and business leaders at every meal. As an American, for the first time in my life, I found myself jealous of another nation. The Chinese federal officials we met had an enormous common interest for the greater good of all China. In the U.S., we are mostly a collection of special interests-each person or organization looks out for themselves and we expect this collective self-interest to efficiently support the common interest. The current state of U.S. healthcare reform, where our Congress has sold out to the special interests, illustrates that our self-interest model is flawed.

In China I met a new class of young billionaire entrepreneur-people like Xie Hong ("Sam") who founded a wellness baby formula manufacturer in 1992 called Beingmate, Sam's sales in 2009 exceeded $8 billion (US). Sam is one of hundreds of new billionaire entrepreneurs in China whose work is distinguished by the fact that they produce or distribute things that benefit all of China-unlike many of the billionaires in the west who mainly move around the balance sheets of other people's products or services.

At Peking University I was struck by how many of the students wanted to be social entrepreneurs--doing well by doing good-rather that work in areas like finance, which, in China, has a negative connotation.  I pointed out to them that back in 1976, when I worked in finance at Citibank under Jim Tozer, we thought of ourselves as social entrepreneurs--delivering to young people just beginning their lives the ability to purchase a new car or a new home. While defending the U.S. financial service industry in China I (sadly) realized how far the U.S. financial services industry had drifted from the common interest.

Click here for more information on my visit to China