Part IThe Story
Paragraph three
The most exact biography of Jay Van Andel ever produced by a government agency fits in one sentence, and its authors did not mean it kindly. It sits on the second page of a complaint the Federal Trade Commission filed on March 25, 1975, Docket 9023, In the Matter of Amway Corporation, Inc., et al. The first paragraph establishes the corporate facts: an entity "organized on or about September 6, 1949, under the name Ja-Ri Corporation, Inc.," renamed Amway in November 1963, merged with three sister companies on or about New Year's Day 1964, headquartered at 7575 East Fulton Road, Ada, Michigan. The second paragraph names the distributors' association. The third names the man.
"Respondent Jay Van Andel is Chairman of the Board of Directors of respondent corporation, and was one of its founders. Together with others, respondent Van Andel instituted the Amway marketing plan and distribution policies, and has been and continues to be responsible for establishing, supervising, directing and controlling the business activities and practices of corporate respondent."
Lawyers write together with others to avoid overstating a case. In this one instance the hedge happens to be the truest thing in the document. Van Andel was fifty years old that spring, chairman of a company whose estimated retail sales had climbed from $500,000 in 1960 to $85 million in 1969, and nearly everything he had done in the previous thirty-five years he had done together with someone. Usually it was Rich DeVos, the classmate who had paid him a quarter a week for rides to school and who became, in the public mind, the face and voice of the enterprise. DeVos gave the speeches and worked the crowds. He drew comparisons to a revival preacher. Van Andel drew a different comparison, when anyone thought of him at all: the quiet one, the partner whom some commentators credited with being the financial and management mind behind the most successful direct-selling machine on earth.
The government, at least, knew where to look. Instituted the Amway marketing plan. It was a charge, and also an attribution of authorship that the public had mostly neglected to make. He had written the plan. Early on he had written all the sales and marketing materials himself. He had built the thing that the government was now trying to decide whether to call a business or something else, and the FTC's own attorneys would put the alternative in plain words: some sort of quasi-religious, socio-political organization.
The case would take four years. It would end with a ruling that Amway was not a pyramid scheme, a finding that it had fixed prices and exaggerated what its distributors could earn, and an order to tell recruits, in writing, how little the average one actually made. Van Andel would spend the rest of his life treating the first half of that verdict as a vindication and saying comparatively little about the second.
Seven miles or so west of the headquarters named in paragraph three, Fulton Street crosses into downtown Grand Rapids. At number 130 West Fulton there is now a hockey arena with his name on it. It took the man named in the complaint twenty-one years to get from one address to the other, and he traveled the road the way he traveled everything. Not alone.
By the Numbers
The American Way, Itemized
$0.25Weekly fare Rich DeVos paid for rides to Grand Rapids Christian High in Van Andel's Model A
$19.50Price of the first box of Nutrilite supplements the partners sold, in 1949
5,000+Distributors in the Ja-Ri Nutrilite network by 1958
45Plant expansions Amway completed in its first seven years
<$100Average monthly earnings per distributor the FTC ordered Amway to disclose (1979)
C$25MFine paid in 1983 after guilty pleas to criminal customs fraud, the largest in Canadian history to that point
$2.3BForbes estimate of Van Andel's fortune in the year of his death, 2004
A quarter for the ride
The arrangement began as a transaction, which is the only fitting way for it to have begun. In 1939 or 1940 (accounts differ by a year, and the Michigan House of Representatives, in its memorial resolution, went with 1939), a fifteen-year-old named Jay Van Andel had access to a Model A Ford because his father, James, ran an automobile agency in Grand Rapids. A younger student at Grand Rapids Christian High School needed a way to get there. The fare was twenty-five cents a week, nominally for gas. The passenger was Richard DeVos.
It is the founding anecdote of Amway, retold in corporate histories, obituaries, a state legislative resolution and the back-cover copy of Van Andel's autobiography, and it is retold so often because it does so much work. Here, already, is the instinct to price a favor. Here is the asymmetry the company would later run on: one boy owned the vehicle, the other boy needed a ride, and the relationship that formed was not charity but a small, recurring fee that left both parties feeling well treated. Here, too, is the partnership itself, which would outlast the Model A by more than six decades.
The two boys came from the same place in a sense more specific than geography. Van Andel's grandparents, Christian and Elizabeth, had come over from the Netherlands in 1909, part of the long migration that made Grand Rapids a capital of the Dutch Calvinist diaspora. His mother was Petronilla Van der Woude, called Nellie, a homemaker. The family belonged to the Christian Reformed Church, a denomination conservative even by the standards of west Michigan, whose members built their own schools so their children would not have to attend anyone else's. DeVos, born March 4, 1926, the son of an electrical contractor named Simon, belonged to the same church and went to the same school. Both families, by most accounts, pressed their sons toward businesses of their own. Neither boy seems to have argued.
Van Andel's own summary of his religious inheritance, written decades later, is notable mostly for how little of it concerns doctrine: "Christianity involved the living out of Biblical values of honesty, generosity, and respect for others in our everyday life." It is the Calvinism of the account book and the front step, a faith that measures itself in conduct, and it would turn out to be a remarkably portable thing to build a company on.
The surname itself is a kind of address. Van Andel is a Dutch toponymic, meaning simply "from Andel," a town in North Brabant. The family carried a place in its name across an ocean and then, three generations later, produced a man who would put that name on an arena, a museum and a research institute in the city where he was born, a few miles from where he would die. He traveled widely. He did not, in any meaningful sense, leave.
One summer the two teenagers drove a pair of used trucks to Montana for Van Andel's father. Nothing about the errand is remarkable except that later accounts single it out as the trip that sealed the friendship, the first time the two of them were responsible for delivering something valuable a long way from home, on someone else's behalf, and getting it there.
Then the war. Van Andel served as an officer in the U.S. Army Air Forces from 1942 to 1945, commissioned a second lieutenant, and spent his service training crews for the B-17s and B-29s that would reach the Japanese mainland. His education before and around the war was an itinerary more than a degree: Calvin College in Grand Rapids, Morningside College in Sioux City, Iowa, Pratt Business School in Kansas, the Yale University Aviation Cadet School in New Haven. DeVos went into the Air Forces too, in 1944, and the Pacific separated them by thousands of miles of ocean. Both came home convinced, as DeVos's family archive later put it, that airplanes would change the skies of postwar America.
They were right about the airplanes. They were wrong about almost everything else they tried for the next three years.
Pontoons on the Grand River
Wolverine Air Service began, as most of their ventures would, with an asset purchased before the skill to use it. In 1946 Van Andel and another partner, both of them college students, bought a Piper Cub. The following year the partner sold his share to DeVos, who by the family's telling sank his entire $700 in military savings into it. There was a complication beyond the obvious one, which was that neither of them knew how to fly. The airfield they were building did not yet have usable runways. So they fitted the Cub with pontoons and took off from the Grand River.
They hired pilots to do the teaching and kept the selling for themselves. Their pitch, which DeVos remembered for the rest of his life, was a small masterpiece of reassurance aimed at a country that had just learned to drive: "If you can drive a car, you can fly a plane." It was not strictly true. It was true enough to sell lessons. The business grew to twelve aircraft and fifteen instructors. Van Andel's autobiography, with the dry humor its reviewers noticed and did not quite expect, recalls planes "that tended to run out of gas."
Between flights there was dead time, and dead time offended both of them. They opened a hamburger stand at the field. By most accounts it was the first drive-in restaurant in Grand Rapids, and it served butter-fried hamburgers made from their mothers' recipes. They took turns at the grill and as carhops. Selling flying lessons by day and flipping burgers by night: the formula that would later be marketed to millions of part-time distributors as a lifestyle was, in 1947, simply what two restless veterans did with their evenings.
In 1948 they sold both businesses. With the proceeds they did something that reads, in retrospect, like a test of whether the partnership could survive real failure. They bought a thirty-eight-foot schooner called Elizabeth, which had spent too long in dry dock, and set out for the Caribbean and South America. Neither had sailing experience. They got lost more than once. They hugged the Eastern Seaboard, heading south, while the boat leaked. In 1949, off the coast of Cuba, it sank.
DeVos made the story a sermon. In books and speeches he used it to illustrate a philosophy he summarized as "Set a goal and go for it," aimed at people who never tried anything for fear of being laughed at. Van Andel's version, in the autobiography, files it under "youthful adventures," with the word "ill-fated" doing quiet editorial work. One partner turned the shipwreck into motivation. The other turned it into a chapter, and kept going.
They kept going overland and by air, through the Caribbean and South America, and somewhere on that trip they found the next idea, which was not about boats at all. They would import goods, wooden goods from South American countries, to sell back home. To do it they formed a company, combining the first syllables of their names: Ja-Ri. It was incorporated on September 6, 1949. The records of what it was supposed to be and what it became sit today in the archives at Hope College, collection H97-1335, six and a quarter linear feet of correspondence, distributor files, testimonial letters and, in a folder labeled with what may be the most candid title in the company's history, "Unfavorable Press, 1958–1959."
By the time the paperwork was filed, Ja-Ri had already stopped being an import business.
The year of the pyramid clubs
In the winter of 1949 America went briefly and collectively out of its mind over a chain-letter game with snacks. "Pyramid friendship clubs" spread through the country, and especially through the anxious lower middle class: pay a dollar or two to join, recruit two more paying members, and wait for your name to rise to the top of the pyramid, at which point you hosted a party, collected the pot and dropped out. Life magazine, on March 7, 1949, called it a "new mass hysteria." Newsweek ran a story headlined "Pyramiding Pyramids." The clubs were illegal, a form of gambling, but authorities hesitated to intervene for fear of public revolt; hundreds of readers threatened to cancel their subscriptions to the Detroit News after it published stories condemning them. Newsreels showed lucky participants waving fistfuls of cash. Most participants got nothing.
That August, at the height of all this, Van Andel and DeVos sat up through a night-long conversation with Van Andel's second cousin, Neil Maaskant, who wanted them to sell vitamins.
The vitamins were Nutrilite, and their origin story was stranger than the pyramid clubs. The company had been founded by Carl Rehnborg, who had survived a Chinese prison camp and come home convinced that nutritional supplements could do for ordinary people what deprivation had shown him their absence could undo. Nutrilite's products were marketed exclusively by a firm called Mytinger & Casselberry, and its sales method was one the country did not yet have a settled name for. A new distributor paid $49 for a sales kit (explicitly not a membership fee, the company stressed, but the cost of materials) and sold the product door to door. If a satisfied customer became a distributor too, the original seller earned a percentage of the new seller's sales. It resembled a pyramid club in silhouette. The difference, which would take the federal government thirty years to adjudicate, was that money moved only when product did.
The partners signed up. The next day they sold their first box, for $19.50.
Then, for two weeks, nothing. They lost interest. The detail survives in the company's own account and deserves more attention than the founding myth usually gives it: the two most celebrated salesmen in the history of direct selling quit, in effect, after one transaction. What brought them back was not the product but the room. Maaskant, who had become their sponsor, pushed them to attend a Nutrilite seminar in Chicago. It was held at a downtown hotel with more than a hundred people in attendance. There were promotional filmstrips. There were talks by company representatives and by distributors who had made real money. The two men from Grand Rapids walked out believers. On the drive home to Michigan they sold their second box.
It is impossible to understand what Van Andel later built without that sequence. Product alone had not moved them. A room full of people who had succeeded, a projector, testimony: that had moved them in a single afternoon. Everything Amway would become, the rallies and the conventions and the cassette tapes and the hotel ballrooms full of strangers who had come to watch other strangers describe their new lives, is present in that Chicago seminar, and Van Andel, who would not be the one on stage, understood better than almost anyone why it worked.
They turned Ja-Ri into a Nutrilite distributorship and worked out of the basements of their homes. In their first year they made $82,000. In 1950 they made more than $300,000. At first they tried selling through jobbers, wholesalers and supermarket buyers; then they shifted to direct sales, building a network of distributors who worked their own territories and recruited their own. By 1958 the network numbered more than 5,000.
There is one more door-to-door call from these years worth recording. In the spring of 1951, on a direct-selling house call, Van Andel met a young woman named Betty Jean Hoekstra. She was a teacher who would later carry her conviction about children and science into an institute bearing their name, and she would build Opera Grand Rapids into one of only two opera companies in the state. They married on August 16, 1952. Six months later, on February 7, 1953, DeVos married Helen Van Wesep. Each couple would have four children. They settled in Ada, in houses next door to each other. The local press, eventually, called them the Dutch Twins.
He had met his wife while trying to sell her something. The business model and the marriage began, in other words, on the same front step.
The quiet half of the machine
In the late 1950s Nutrilite began to come apart. The government questioned the nutritional value of the product; sales fell; there was conflict inside the company's management. For Van Andel and DeVos the danger was not the loss of a supplier. Suppliers could be replaced. The danger was the loss of 5,000 people who had organized their working lives around the partners' network and who could, if the parent company collapsed, scatter overnight.
Their response, in April 1959, was revealing in its order of operations. They did not first find a new product and then rally their people around it. They first gathered their top distributors into an organization, the American Way Association, to "represent the distributors" and provide them with security and cohesion. Only then did they go looking for something to sell. The network came first. The product came second. It is the inverse of how nearly every consumer company in America at the time understood itself, and it is the single most important strategic decision Van Andel ever made.
The first product was a concentrated organic cleaner called Frisk, developed by a chemist in Ohio. They bought the rights to manufacture and distribute it and renamed it L.O.C., for Liquid Organic Cleaner. It was biodegradable, which turned out to be good timing for a decade about to discover ecology. It was also, crucially, soap, and DeVos is credited with the explanation of why that mattered: everybody buys it. A new distributor did not need to persuade anyone that they needed L.O.C. They needed only to persuade their neighbor to buy cleaner from them rather than from the grocery.
They formed Amway Sales Corporation to procure and inventory products and run the sales and marketing plan, and Amway Services Corporation to handle insurance and benefits for distributors. In 1960 they bought half of Atco Manufacturing in Detroit, which made L.O.C., and renamed it Amway Manufacturing Corporation. SA8 laundry detergent arrived the same year. A converted service station on Fulton Street in Ada became the company's first office outside the basements. Steve Van Andel, Jay's eldest son, later described his childhood exposure to the enterprise in one sentence: "As children, all we had to do to see the business was to go down to the basements."
Then the thing outran its containers. The company that started with a dozen workers employed 500 by 1965. The distributor force reached 65,000. In its first seven years Amway had to complete forty-five plant expansions just to keep up. Satinique hair care arrived in 1965; Artistry cosmetics in 1968. A fire in the aerosol plant in Ada in 1969 did not slow it down. Canada opened in 1962, England in 1964. Estimated retail sales ran $500,000 in 1960, $35 million in 1965, $85 million in 1969, by which time there were 100,000 distributors.
The division of labor between the partners was visible even then. In the early 1960s the two men traveled the country in what they called the Showcase Bus, and the encyclopedias are consistent on the casting: DeVos was the "charismatic motivator." Van Andel was the chairman, DeVos the president. One preached. The other built the church, wrote its liturgy and audited its books.
The liturgy was literal. In Amway's early days Van Andel wrote all of the sales and marketing materials himself, the documents that told a new distributor what to say, what to sell, how the bonuses worked and why. In the early 1970s he wrote a memo called "Our Selling Machine," which Amway still keeps in its archives and which one longtime employee, writing on what would have been Van Andel's hundredth birthday, called "a timeless blueprint with which every Amway employee should be familiar." The name tells you how he saw it. Not a family, not a movement, not a dream, the words the rallies used. A machine.
Another former employee, Herb VanderBilt, left a smaller and more vivid memory in the same thread. "Jay was a real stickler for safety and cleanliness," he wrote. "Every year he would perform a 'white glove' inspection of the whole plant." The workers cleaned for days beforehand. "We all took pride in our area, to show our very best." It is the sort of detail that tells you more than any organizational chart: the chairman of a company selling soap to the world, walking the floor of his own factory once a year in a white glove, looking for dirt.
He was not, for all that, a micromanager by temperament, or at least he did not believe he should be. In An Enterprising Life, his 1998 autobiography, he describes a discovery the partners made very early, that hiring people to do what they themselves could not was not a weakness but an edge over competitors who insisted on doing everything personally.
— Jay Van Andel, An Enterprising Life (1998)(We learned) to stay out of the shop and let other people do what they do best. Delegating responsibility is essential — even for some of the most important work.
The white glove and the delegation are not contradictions. They are the two halves of a particular kind of control: hand over the work, keep the standard, and come back once a year to check.
Respondent
The pyramid craze of 1949 had faded, but the shape it described had not. By the end of the 1960s new schemes were spreading under the banner of motivation and cosmetics, and in 1972 a South Carolina pitchman named Glenn Turner was convicted of swindling thousands through fraudulent cosmetic and motivational pyramid schemes. Turner sold the dream of wealth and the training to achieve it. To a regulator squinting at Amway from Washington, the resemblance was not hard to see.
The FTC began investigating Amway in 1969. The formal complaint came on March 25, 1975, with five counts under Section 5 of the Federal Trade Commission Act. Count I alleged resale price maintenance. Count II alleged that Amway allocated customers among its distributors and restricted where they could buy and resell. Count III alleged restrictions on distributors' advertising. Count IV went to the heart of the thing: that Amway misrepresented the "substantial income" available from "geometrical increases in the number of distributors in the chain recruiting operation." Count V alleged that the company misrepresented the profitability of a distributorship and failed to disclose the expense involved and "the high turnover of distributors," a drop-out rate, the FTC said, well over half.
One of the commission's lawyers offered a description of the company that has outlived the litigation.
— Federal Trade Commission attorney, during the Amway proceedingsThey're not in a business, but some sort of quasi-religious, socio-political organization.
Amway hired Lee Loevinger of Hogan & Hartson in Washington, with in-house counsel John E. Stephen of Ada. Oral arguments were heard on June 6, 1978. An administrative law judge had already found that Amway was "a genuine business opportunity" and that it was "not in business to sell distributorships and is not a pyramid distribution scheme."
What saved the company was paperwork that Van Andel, the man who wrote the rules, had written. There was no entry fee to speak of beyond the kit. There was a buyback rule: the company and its distributors had to accept returns of excess inventory from those below them. There was the "70 percent rule," which Commissioner Robert Pitofsky quoted in the commission's opinion: "[every] distributor must sell at wholesale and/or retail at least 70% of the total amount of products he bought during a given month in order to receive the Performance Bonus." And there was the "10 customer rule," under which a sponsoring distributor had to make "not less than one sale at retail to each of ten different customers that month and produce proof of such sales to his sponsor." Pitofsky wrote that the judge had found these rules were enforced and that they "serve to prevent inventory loading and encourage retailing." The money moved when product moved. That had been the distinction between Nutrilite and the friendship clubs in 1949. It was still the distinction in 1979.
The final order came on May 8, 1979. Amway was not a pyramid scheme. That was the headline, and the company would print it, in one form or another, for the next twenty years.
The rest of the order was less quotable. The commission found that Amway had engaged in resale price maintenance, both through explicit agreements on wholesale prices and through practices "designed to insure adherence" to suggested retail prices. It found misleading earnings claims. It ordered the company to stop allocating customers, stop fixing retail prices, print a disclaimer on every suggested retail price list, and stop implying anything other than average results unless it conspicuously disclosed what those averages were. And the averages were dismal: more than half of distributors made no money, the average distributor less than $100 a month. Later accounts of the FTC's labeling requirements put it more starkly still: 54 percent made nothing; the rest averaged $65 a month. In 1986 Amway paid a $100,000 civil penalty for running ads that cited higher-than-average earnings without the required disclosures.
When Van Andel wrote about the case two decades later, a reviewer noted that what he seemed "to relish the most of all Amway's successes" was its "vindication." The book's own publisher described it as an account of "the hostility of the U.S. government toward truly 'free' enterprise and its attempts to extinguish Amway." It is a coherent reading of the verdict. It is also, inescapably, half of one.
There was another government, and there the reading was harder to sustain. Amway had begun exporting to Canada in 1962. In 1982 a Canadian prosecution indicted Van Andel, DeVos and Amway's executive vice president for corporate services, William J. Discher Jr., on criminal charges that they had underreported the value of goods brought into the country, defrauding the Canadian government of more than $28 million between 1965 and 1980. The charges against the individuals were dropped in 1983 after Amway and its Canadian subsidiary pleaded guilty to criminal customs fraud. The companies paid a fine of 25 million Canadian dollars, at the time the largest ever imposed in Canada. In 1989 they settled the outstanding duties for another 45 million. The founders, one contemporaneous account records, "maintained that they had done nothing wrong."
The man who audited his plant with a white glove had presided over fifteen years of undervalued invoices at a border crossing. One can hold both facts without resolving them. Van Andel, by all appearances, did.
Siamese twins
The year the FTC issued its final order was also the year Van Andel became, in effect, the national spokesman for American business. He served as chairman of the U.S. Chamber of Commerce in 1979 and 1980. It is difficult to imagine a better demonstration of how he understood the case: not as an indictment of his company but as an episode in a larger war, between the people who built things and the government that got in their way.
In December 1979 he set the terms of that war in a lecture later printed in Imprimis, the newsletter of Hillsdale College, where he sat on the board of trustees. President Carter had lately been quoted as saying that most Americans expected the next five years to be worse than the last five. Van Andel's answer was the most combative passage he ever published.
— Jay Van Andel, 'The Continuing Promise of America,' Imprimis, December 1979The President has been reading polls instead of listening to the people. There is a national malaise all right, but it is the result of ho-hum leadership and the failures of the established institutions of this country and not indifference to the promise of America.
People still had faith in themselves, he went on. "They want the skeptics, the doomsayers and the government to get out of the way so that they can get on with the business of fulfilling the promises of America." The same speech catalogues American achievement in a long, rolling litany of hospitals, schools, churches, highways, jet airplanes and "a hundred million buildings," and the effect is less economic argument than hymn. It reads, in places, like a distributor rally with the music turned off.
In June 1981, delivering a Ludwig von Mises Lecture at Hillsdale, he was blunter about the stakes. Real freedom for large numbers of people, he told the students, had come into existence only about two hundred years earlier, and "it's possible, although we hope not probable, that this brief interlude of freedom could become just an historical accident." The doctrine fit in a single homely image: "Individual freedom and economic freedom go hand in hand, you know. They're like Siamese twins." The you know is the giveaway. Even at a lectern, he was talking to someone across a kitchen table.
The biographical note attached to that lecture lists his offices as of 1981 the way a résumé lists jobs: chairman and chief executive of a company with estimated retail sales above $1.1 billion for fiscal 1980 (the first billion-dollar year), chairman of the Chamber, finance chairman of the Michigan Republican Party, adviser to the World Affairs Council of Grand Rapids, Hillsdale trustee. In 1984 he became a trustee of the Heritage Foundation and would remain one until the year he died. He served as a director of the Jamestown Foundation and of the Gerald R. Ford Foundation, and as North American chairman of the Netherlands American Bicentennial Commission. In 1992 President George Bush appointed him U.S. Ambassador and Commissioner General to Genoa Expo '92 in Italy. The Michigan legislature, in its memorial, called him a "confidant and unofficial advisor to United States presidents."
The closest of those presidents was a neighbor. Gerald Ford was a Grand Rapids native, a longtime local congressman whom Watergate had improbably carried into the Oval Office. Ford attended Amway's fortieth anniversary in 1999 and offered the founders a toast that doubled as a description of the city: "The face of Grand Rapids reflects their generosity, their confidence in the future and the profound sense of stewardship." When Van Andel died, Ford called him "a great family man and a worldwide leader in the business arena." One later biographical sketch alleged that the founders' Ford connection helped Amway avoid further federal inquiries; the claim is unsourced, and the timeline is awkward, since the FTC's investigation ran straight through Ford's presidency.
The ideology was not decoration. It was the product's second ingredient. Amway's name was an abbreviation of "the American Way," and to its founders and millions of distributors the company came to stand for "the American way of private ownership and free enterprise." Distributors were not employees. They were independent business owners, small proprietors, and the pitch was not only that they could earn extra income but that they could stand outside a system dominated by IBM and General Motors. A Washington Post obituary would later put the whole enterprise in a phrase: a business "that told millions of Americans they could be apostles of free enterprise."
The faith had consequences that extended beyond its founders' control. Mother Jones described the distributor force of the 1990s as operating "like a private political army." In 1994 Amway gave $2.5 million to the Republican National Committee, the largest corporate contribution to a party for a single election up to that time. By his last year Van Andel was still writing checks: $2 million to Progress for America, a group supporting George W. Bush's reelection, and $475,000 to the Michigan Republican Party, mostly for legislative races. Some of his giving went to causes the Chamber's members might have found exotic, among them the Creation Research Society, whose station in rural Arizona set out to support the account of a world made in a week.
He had told the Hillsdale students that free enterprise made possible "great hospitals" and "great centers of learning." He spent his last decade building one.
Two houses in Ada
DeVos and Van Andel worked together for more than half a century, and in that time no public account records a breakup, a power struggle or a falling-out. This is not normal. Partnerships of ambitious men who become very rich tend to end badly or end. Theirs ended only with Van Andel's death, and it held, in part, because each man kept to his side of the stage.
DeVos was the talker, a man whose later book, Compassionate Capitalism (1993), offered advice for living well in a Christian tradition and whose family went on to own the Orlando Magic. He was a founding member and twice president of the Council for National Policy. He was, for most of the public, Amway. Van Andel was chairman, then chief executive; the one Publishers Weekly described in 1998 as "the quieter of the two," who "has always been a strong voice in support of Christian and conservative values" while "avoiding the spotlight." A hostile local history, the Grand Rapids People's History Project, put it with less affection: Van Andel was "quiet and reserved," it wrote, but "make no mistake about it, his politics were every bit as ruthless as that of Rich DeVos." Admirers and detractors, in other words, agree on the temperament and disagree only on what was underneath it.
The households mirrored each other with an almost liturgical precision. Both men married women from the Grand Rapids Dutch community in the same six-month span. Both had four children. They lived side by side in Ada and belonged to the same church. In 1992 a board of directors was formed made up of the two founders and eight family members. Their fortunes, by the late 1990s, tracked each other closely enough that one estimate put DeVos at $1.5 billion and Van Andel at $1.4 billion, the difference a rounding error by the standard of their lives.
Succession arrived the way it usually does, ahead of schedule. In December 1992 DeVos had a heart attack. After triple-bypass surgery he resigned as president, and his son Dick took over. Van Andel resigned as chairman in 1995 and was succeeded by his son Steve. The sons, both born in 1955, shared a newly created office of chief executive. A generation later a reporter would describe Steve Van Andel and Doug DeVos, then co-heads of the parent company, as "extremely close pals just like their fathers." The arrangement had been engineered to reproduce itself, a partnership of Dutch Twins in perpetuity.
What the sons inherited they reshaped. In 1999 the founders launched a sister internet company named Quixtar and, in 2000, a holding company named Alticor. In North America nearly every distributor migrated to Quixtar, and Alticor closed Amway North America after 2001. The name that had stood since 1959 for the American Way simply stopped being used in America. Within a few years the company reversed itself, announcing in 2007 that the Quixtar brand would be phased out in favor of Amway. "We decided there were a number of roads we had to go down," an executive explained, "in order to recreate awareness for a brand that, quite frankly, a lot of people felt had gone away."
Van Andel had not gone away so much as stepped to one side. He was around seventy-one when he handed over the chairmanship. And at about the same time, according to the executive director of his foundation, he was diagnosed with Parkinson's disease.
The name on Fulton Street
In 1983 Michigan's unemployment rate was 17 percent. In the greater Grand Rapids area it was 11 percent. That year a group of local business leaders, not municipal officials but the owners and chief executives of the region's largest companies, began meeting to talk about what they could do, as employers, to make the place somewhere people would want to move to. The chairman of the group was Jay Van Andel. He and about a dozen others sat down with a facilitator and asked, as one participant later put it, "what does this community have to offer?"
The answer became The Right Place, a regional economic-development organization of which Van Andel was founding chairman. A German-born development officer named Birgit Klohs joined it when it was formalized in 1987 and ran it for more than three decades, retiring in 2021. Her description of the work is a fair summary of how her founding chairman thought about power: "We don't control anything. … We have to bring them to the party because they trust us." It is the distributor's method, applied to a city.
Five years before that, the reshaping had already begun. In 1978 Amway bought the sixty-five-year-old Pantlind Hotel in downtown Grand Rapids, restored it, added a twenty-nine-story tower and reopened it in 1981 as the Amway Grand Plaza. The Michigan House would later credit Van Andel with "spearheading the revival" of his city with that project. Then came the money with his own name attached. Ground was broken on February 8, 1995, for a downtown arena on West Fulton Street. It opened on October 8, 1996, after the Van Andel foundation gave $11.5 million toward a cost reported at between $75 million and $78 million. It was named for Jay and Betty Van Andel as the largest benefactors; the public paid for most of the rest, through bonds that took twenty-seven years to retire, the last payment made in 2022. The Van Andel Museum Center followed. DeVos Hall and DeVos Place went up nearby, and the skyline of Grand Rapids now reads, in places, like a corporate org chart.
The Van Andel Arena became home to a minor-league hockey team, the Grand Rapids Griffins, which Van Andel's son David helped bring to the city the year it opened, and whose fans call the building "The Freezer on Fulton." It has hosted Bob Dylan and Disney on Ice, the Harlem Globetrotters and Metallica, and on three separate occasions the final rally of a presidential campaign. Not every naming deal of that era has proved durable. In Orlando, the arena the DeVos family's Magic play in carried the name Amway Center until December 2023, when Kia bought the rights. In Grand Rapids the name has stayed where it was put.
At the arena stands a bronze of Van Andel, one of the first statues erected in a Community Legends series funded by a local businessman named Peter Secchia. The plaque's main message is that he was a tireless "advocate for free enterprise." The phrase is accurate as far as it goes.
What the institute studies
Jay and Betty Van Andel founded the Van Andel Institute in 1996, the year the arena opened. Its stated purpose was biomedical research and science education. Their son David became chairman and chief executive at the founding and has never not been. In 1999 a molecular biologist named George Vande Woude arrived as founding research director, a scientist whose own surname, like the founder's, carried its Dutch origins on its face. He held the post for a decade before stepping back to spend more time in his laboratory. The education arm's first director was Gordon Van Wylen, a former dean of engineering at the University of Michigan who had spent fifteen years as president of Hope College in Holland, Michigan, the Reformed college a half hour's drive away. The pattern is hard to miss. Even the scientists and educators the Van Andels recruited seemed to come from the same small world of Dutch names and Calvinist schools that had produced the founders.
The building, designed by the architect Rafael Viñoly, went up on what Grand Rapids now calls the Medical Mile. The first phase was completed in 2000; the second opened in December 2009, eventually reaching 400,000 square feet. In the lobby hangs a fourteen-foot glass sculpture by Dale Chihuly titled Life, a representation of the DNA double helix. The institute's research came to concentrate on two areas: cancer epigenetics and Parkinson's disease. A Center for Neurodegenerative Science opened in 2012, devoted primarily to the underlying causes of Parkinson's. One account of the institute's founding put its endowment at an estimated $1 billion.
Nothing in the public record says that Van Andel built an institute to study the disease that was killing him, and it would be presumptuous to claim it. The timeline says only that he was diagnosed around 1995, founded the institute in 1996, and spent the eight years that remained watching it rise while his body declined. His wife had Alzheimer's. The institute's research list grew to include Alzheimer's, too.
He kept publishing. An Enterprising Life appeared in 1998, with forewords by Paul Harvey and Rich DeVos. Publishers Weekly was unpersuaded that it told readers much about Amway: only four of its twenty-one chapters dealt with the company, it noted, while the balance went to politics, philanthropy, Calvinist theology and family. But the reviewer saved the last word for the author rather than the book. "Clearly and simply spun, Van Andel's prose has a rhythm that sustains interest in the absence of drama," the review concluded. "A less sincere and humble person might have written a more exciting autobiography, but it is unfair to blame the book for being true to its subject." The book was later translated into Spanish as Una Vida Emprendedora and into Portuguese, for distributors in markets he had once only imagined. At a 1991 convention he had explained the reach: "Our attitude that Amway could be transplanted anywhere made us a global company." Amway had entered China in 1995. In the year he died, Alticor reported its largest single-year sales increase in history, $1.3 billion, carried mostly by Asia.
Betty died in January 2004, after fifty-two years of marriage. Jay died on December 7 of that year, at home in Ada, of apparent heart failure; he was eighty. The announcement came from Casey Wondergem, executive director of the Jay and Betty Van Andel Foundation, and from Greg McNeilly of the Michigan Republican Party, then chaired by Betsy DeVos, his partner's daughter-in-law. The Michigan House introduced House Resolution No. 369, opening with Matthew 25:23: "Well done, good and faithful servant." The Washington Post obituary ran on December 8. On December 9 the paper printed a correction. It had misspelled the name of the Christian Reformed Church.
One of the city's newspapers of record, in the end, could not quite get the name of the place he came from right. The city itself had no such difficulty.
Drive west along Fulton Street from the township where the basements were, past the company headquarters at number 7575 East, into downtown, over toward the river, and the road delivers you to a cold building full of ice and noise where a bronze man stands, slightly larger than life, under a plaque that names one thing he believed in. The man the federal government described with such care in 1975 is there in metal, alone, which is the one condition in which he almost never lived. On a game night in winter the doors open and eleven thousand people come through them together.
Part IIThe Playbook
What follows are twelve principles drawn from Van Andel's career. They are not endorsements. Several of the most effective things he did were also the most contested, and a playbook that pretended otherwise would be useless. The lessons below are about mechanism: how a quiet second partner turned a vitamin distributorship into a global selling machine, defended it against two governments, handed it to his children and wrote his name onto a city. Where the mechanism cut both ways, the analysis says so.
The principles
- 1.Be the architect in a partnership built for two voices.
- 2.Write the manual yourself.
- 3.Protect the network before you choose the product.
- 4.Sell what people already buy.
- 5.Your operating rules are your legal defense.
- 6.Read your harshest critic's description of you.
- 7.Fail early, cheaply and together.
- 8.Delegate the shop; keep the white glove.
- 9.Own the supply when growth outruns it.
- 10.Make the ideology part of the product, and know what it costs.
- 11.Engineer succession before the body forces it.
- 12.Invest in the place that made you.
Principle 1
Be the architect in a partnership built for two voices
Amway's public story belongs mostly to Rich DeVos, the "charismatic motivator" of the Showcase Bus, the man whose sinking-schooner sermon became company scripture. Its operating system belongs to Van Andel, the chairman whom the FTC identified as having "instituted the Amway marketing plan and distribution policies" and whom commentators credited as the financial and management mind. The partnership lasted fifty-five years without a public rupture, and its durability owed a great deal to the fact that the two roles did not compete.
The lesson is not that every company needs a showman and an engineer. It is that a partnership survives when its members divide the stage cleanly and neither covets the other's half. Van Andel never tried to out-talk DeVos. DeVos never tried to write the plan. Each got credit for something real.
J
The Dutch Twins, Divided
How the two founders split the work, as described across contemporaneous sources.
| Dimension | Jay Van Andel | Rich DeVos |
|---|---|---|
| Title | Chairman, later CEO | President |
| Public role | "The quieter of the two" | "Charismatic motivator" |
| Signature contribution | Wrote the plan, the materials, the "Selling Machine" memo | Rallies, speeches, the founding stories |
| Book | An Enterprising Life (1998) | Compassionate Capitalism (1993) |
| National platform | U.S. Chamber of Commerce; Heritage Foundation | Council for National Policy; RNC donor |
| Successor | Son Steve, chairman, 1995 | Son Dick, president, 1993 |
Tactic: Before you formalize a partnership, write down, in a sentence each, which public role and which private role belongs to whom, and revisit the list whenever one of you starts wanting the other's.
Principle 2
Write the manual yourself
In Amway's early days Van Andel wrote all of the sales and marketing materials personally. Later he wrote "Our Selling Machine," a memo still circulated inside the company half a century on. A founder who writes the documents that every new participant reads controls the company's actual behavior far more than one who writes its press releases. The manual is where a strategy becomes instructions, and instructions are what thousands of strangers will actually follow when no one is watching.
This matters doubly in a distributed organization. Amway had no sales staff in the conventional sense; it had independent proprietors who could say anything to anyone. The only lever the company had over what they said was what they were given to read. Van Andel kept that lever in his own hand. The cost of neglecting it showed up later, when the most aggressive distributors began producing their own motivational tapes and books, and the company spent decades, and tens of millions of dollars in settlements, trying to rein in materials it had not written.
Tactic: Personally draft the first version of every document a new employee, partner or customer reads in their first week, and do not delegate it until you can recite it.
Principle 3
Protect the network before you choose the product
When Nutrilite wobbled in the late 1950s, Van Andel and DeVos did something counterintuitive. Before they had a single product of their own, they organized their top distributors into the American Way Association, explicitly to represent them and provide security. Only afterward did they buy the rights to an Ohio chemist's organic cleaner. The network was the asset. The product was a variable.
Most founders treat distribution as a cost of selling a product. Van Andel treated product as fuel for a distribution system that had independent value, 5,000 people trained, motivated and linked to one another. That inversion is why Amway survived the loss of its original supplier and why, thirteen years later, it could turn around and buy that supplier outright.
Tactic: List the assets in your business that would survive if your core product disappeared tomorrow; invest disproportionately in whichever one is hardest for a competitor to rebuild.
Principle 4
Sell what people already buy
L.O.C. and SA8 were soap. DeVos is credited with the logic: everybody buys it. The choice eliminated the hardest step in any sale, persuading someone they need the thing at all, and left the distributor with an easier one: persuading a neighbor to buy from them instead of the grocery. Many of the products were, in the words of one encyclopedia, "knock-offs," chemically similar to name brands. That was not a flaw in the strategy. It was the strategy. The innovation was in the channel, so the product was kept deliberately familiar.
The weakness is equally instructive. When Consumer Reports tested detergents in 2010, it ranked Amway's ninth and eighteenth of twenty and suggested shoppers could do better for less at the grocery store. A business that wins on channel rather than product is permanently exposed to anyone who can compare the product directly.
Tactic: If your advantage is distribution, choose a product with proven, recurring demand, and budget explicitly for the day someone benchmarks it on quality alone.
Principle 5
Your operating rules are your legal defense
The FTC did not clear Amway because its lawyers were eloquent. It cleared Amway because the company could show rules that structurally separated it from a pyramid scheme, and could show they were enforced: the buyback of unsold inventory, the 70 percent rule, the ten-customer rule. Commissioner Pitofsky quoted them nearly verbatim. The rules Van Andel wrote in the 1960s were the evidence in 1979.
The rules he had not written well cost him. The commission found price fixing and misleading earnings claims, and imposed a disclosure requirement that the company then violated in 1986. A founder's operating rules are a legal brief drafted in advance, and the gaps in them are drafted in advance too.
§
Docket 9023: The Long Proceeding
From investigation to final order, the FTC case ran a decade.
1969
FTC begins investigating Amway's marketing plan.
1972
Glenn Turner convicted of fraudulent pyramid schemes, raising the stakes for the whole industry.
1975
Complaint filed March 25, five counts; Van Andel named personally as a respondent.
1978
Oral arguments heard June 6; administrative law judge calls Amway "a genuine business opportunity."
1979
Final order May 8: not a pyramid; guilty of price fixing and exaggerated earnings claims.
1986
Amway pays $100,000 penalty for violating the order's disclosure requirement.
⚖
What Saved Amway, and What Didn't
The FTC's findings, sorted.
| Practice | Outcome |
|---|---|
| Inventory buyback rule | Defense Prevented inventory loading |
| 70 percent rule | Defense Tied bonuses to actual sales |
| Ten-customer rule | Defense Made retailing essential |
| Retail price maintenance | Violation Ordered to cease |
| Customer allocation | Violation Ordered to cease |
| Earnings claims | Disclosure Must state that the average is under $100 a month |
Tactic: For every practice a regulator might challenge, write the internal rule that makes it defensible, enforce it, and keep the records of enforcement where a lawyer can find them.
Principle 6
Read your harshest critic's description of you
The single most accurate sentence ever written about Van Andel's role was in a federal complaint against him. The single most memorable description of Amway, "some sort of quasi-religious, socio-political organization," came from a government lawyer trying to shut it down. Both were truer than much of what the company said about itself. Van Andel read the 1979 verdict as vindication and, by his reviewers' account, relished it. What he seems not to have absorbed was the other half: the finding that the average distributor made under $100 a month.
A founder who treats every attack as persecution loses the free intelligence that adversaries provide. The FTC was telling Amway, in effect, what its business looked like from the outside. The company spent the next forty years paying settlements, in Canada, in a 2010 U.S. class action, across India, that rhymed with the same warning.
Tactic: Once a year, collect the three most hostile serious descriptions of your company, and assign someone to answer each on its merits rather than its motives.
Principle 7
Fail early, cheaply and together
Before Amway there was a flight school whose owners could not fly, a drive-in serving their mothers' hamburgers, an import scheme for South American wooden goods and a thirty-eight-foot schooner that sank off Cuba. Each failure was survivable. Most were profitable enough to fund the next one. And each was undertaken jointly, so that by 1949 the partners had already tested their partnership against the things that break partnerships: a sunk asset, a wrong bet, a long trip home.
Even the Nutrilite beginning included a two-week stall after the first $19.50 sale. The partners recovered not by trying harder alone but by putting themselves back in a room full of people who had succeeded. Early failure, shared and cheap, is a partnership's best training data.
Tactic: Before committing to a high-stakes venture with a partner, run a small, time-boxed, low-cost project together and pay close attention to how each of you behaves when it goes wrong.
Principle 8
Delegate the shop; keep the white glove
Van Andel wrote that the partners learned early "to stay out of the shop and let other people do what they do best," and that delegating was essential "even for some of the most important work." He also, by one former plant worker's account, conducted an annual white-glove inspection of the entire plant. These are not in tension. He handed off execution and kept the standard, and he enforced the standard on a schedule everyone knew about, so that the inspection itself became the mechanism that made the plant clean the other 364 days.
The combination is rarer than it sounds. Founders who delegate tend to lose touch with the floor; founders who stay on the floor tend not to delegate. A ritual inspection is a cheap way to do both.
Tactic: Delegate an operation fully, then set a single, predictable, personally conducted inspection of it, and make the date public.
Principle 9
Own the supply when growth outruns it
In 1960, a year after the company was founded, Amway bought half of Atco Manufacturing, the Detroit firm that made L.O.C. Manufacturing then moved to Ada; in seven years the company completed forty-five plant expansions. In 1972 it bought a controlling interest in Nutrilite itself and, in 1994, the rest. When Amway Australia opened in April 1971 and signed up more than 400 distributors in its first month, sales stalled; the culprit was quality control at local manufacturers, and the fix was to ship from the U.S. headquarters.
A distribution business that does not control its supply is renting its reputation from someone else. Van Andel learned that from Nutrilite's instability in 1958 and never forgot it.
Tactic: Identify the single supplier whose failure would most damage your customers' trust, and start building the option to own or replace it before you need to.
Principle 10
Make the ideology part of the product, and know what it costs
Amway did not just sell soap; it sold "the American way of private ownership and free enterprise," and Van Andel carried that message from distributor meetings to the chairmanship of the U.S. Chamber of Commerce, the Heritage Foundation and the lecterns of Hillsdale College. The ideology gave distributors a reason to keep going when the economics were thin. It turned a sales force into, as one magazine put it, a political army. That is extraordinary loyalty, and it is not free.
The same fervor that held distributors together drew the cult comparisons, the regulator's "quasi-religious" charge, the boycotts and, eventually, the company's own accreditation rules barring distributors from promoting political or religious causes on its stage. Ideology is an accelerant. It accelerates both directions.
Tactic: If you build a mission into your product, decide in advance which beliefs are part of the offer and which are the founder's private business, and write that line into your rules before your customers draw it for you.
Principle 11
Engineer succession before the body forces it
In 1992 the founders formed a board that included eight family members. That December, DeVos had a heart attack and resigned as president within weeks; Dick DeVos stepped in. In 1995, around the time of his Parkinson's diagnosis, Van Andel handed the chairmanship to his son Steve. The sons shared a newly created chief executive's office, a structural copy of their fathers' partnership.
The handoff worked because the scaffolding existed before the emergencies did. Had the family board not been in place when DeVos's heart failed, the transition would have been improvised in a hospital waiting room. Van Andel's own transition was, by comparison, orderly, which is the entire point of planning one.
Tactic: Write down, today, who would run your company if you were incapacitated next month, and give that person a formal role now, while you can still teach them.
Principle 12
Invest in the place that made you
With Michigan unemployment at 17 percent in 1983, Van Andel convened a dozen of the region's largest employers to ask what Grand Rapids had to offer. The result, The Right Place, still exists. Amway bought and rebuilt the Pantlind Hotel. The Van Andel foundation put $11.5 million into the downtown arena. The family founded an institute on the Medical Mile that employs more than 500 people. Grand Rapids became, in Gerald Ford's words, a city whose face "reflects their generosity."
A company headquartered in a declining town recruits from a declining town. Van Andel understood that a place is a competitive asset, one a private business can improve, and that his name on its buildings would keep the family, and the company, anchored to it. The critique is real too: the arena's bonds were paid by the public for twenty-seven years, and the influence that comes with a name on the skyline is not only civic.
Tactic: Pick one concrete civic problem in the place where your company recruits and sells, convene the other employers who share it, and fund the first meeting yourself.
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Part IIIQuotes and Maxims
In their words
— Jay Van Andel, An Enterprising Life (1998)Christianity involved the living out of Biblical values of honesty, generosity, and respect for others in our everyday life.
— Jay Van Andel, Ludwig von Mises Lecture, Hillsdale College, published in Imprimis, June 1981Individual freedom and economic freedom go hand in hand, you know. They're like Siamese twins. If you destroy economic freedom or free enterprise, you destroy individual freedom as well.
— Jay Van Andel, We Touch the World Convention, 1991We have to believe in ourselves. You can't predict the future, but you can follow your dreams.
— Jay Van Andel, We Touch the World Convention, 1991Our attitude that Amway could be transplanted anywhere made us a global company.
— Jay Van Andel, as quoted by Amway on his 100th birthday, 2024Love is not getting, but giving.
Maxims
- Price the favor. The ride to school cost a quarter a week, and the friendship that followed was stronger for having started as a fair deal.
- Network first, product second. Organize the people before you know what they will sell; products can be replaced and networks cannot.
- Write the rules that will defend you. The 70 percent rule and the buyback won the FTC case years before anyone filed it.
- The other half of the verdict counts. A ruling that clears you and a ruling that convicts you can arrive in the same order; read both.
- Sell the familiar through the unfamiliar. Soap everybody already bought, through a channel nobody else had.
- Fail together while it is cheap. A sunk schooner off Cuba is tuition for a fifty-five-year partnership.
- Delegate the work, inspect the standard. Stay out of the shop, and once a year walk it in a white glove.
- Own what you cannot afford to lose. Buy the supplier before the supplier's troubles become yours.
- Build the succession while you are well. The board existed before the heart attack, which is why the company survived it.
- Put your name where you came from. A place is an asset, and a name on its buildings is a promise to stay.
