VCs and MLMers share the same DNA?

“You’re crazy Joe, VC’s and MLMers have nothing in common.” Someone said to me. “After all, VCs fund highly scalable companies and take them public. MLMers sell potions and lotions door to door. How can they have anything in common?”


Well, let’s dive a bit deeper than the stereotypes we all have been fed. Let’s look at the general behavioral tendencies of the two groups and see if we can pick up a nugget or two along the way. Keeping mind that there are always exceptions, here is just a short list of commonalities.

– A majority of the members of each group are impulsive decision makers. When they see something they like (typically a new money-making opportunity), they jump in…fast! Oh sure, VCs hire MBA grads to do tons of due diligence and vetting on applications up front. However, if you’ve been on the inside of the process, you’ll agree that from the time the founders of a venture pitch the actual VC investors to the time a decision is made to invest, it is typically minutes and hours – not weeks or months.

– Both VCs and MLMers tend to have a herd mentality toward money-making opportunities. When venture X gets “big VC player #1” to invest, half a dozen others rush in to co-invest. When MLMer #1 finds the next “big play”, hundreds more follow. HINT: Fear of loss is driving both decision processes.

– Neither VCs nor MLMers want to start something from scratch. They’d rather find a venture that has traction and a huge upside potential. Then they jump in with the intent to ride the wave all the way to the top (without getting their hands too dirty in the process). VCs call it “exit”. MLMers call it “retire with $25k a month in residual income”.

– Both approach failed ventures as “water off a duck’s back” – part of the game they play. VCs expect a majority (sometimes 90%) of their investments to fail or significantly underperform. MLMers who have been in the industry for more than 5 years can typically tell the story of one or more busts on their way to success.


Whadaya think?

They aren’t so different after all huh?

Here’s the thing. We’re all people. Some of us have some behavioral tendencies we share with each other. Some of us use those tendencies to run big banks and hedge funds and then become VCs. Others start with a couple hundred bucks in our pocket and buy a distributor kit. But from a modus-operandi perspective, the tendencies are very similar.

So if you happen to be an MLMer or VC (or interact with them a lot), why not understand and study the amazing strengths that drive Opportunist DNA? At the same time, why not study the predisposed weaknesses and put systems in place to compensate for them? (HINT: VCs know their innate weakness to make impulsive decisions. That’s why they hire the MBA grads to slow the process down for them. There’s a little nugget from me to you if you have Opportunist DNA).

Entrepreneurial DNA is a BIG, BIG deal. It is the engine that drives the decisions we all make within the entrepreneurial eco-system. So make sure you know your DNA and have optimized your business (and life) around it.

You’ll be glad you did!