Would You Ever Join A Startup MLM Company? Lou Abbott Answers …

by bobandanna on August 12, 2013

AbbottLouVideoThanks to Lou Abbott  founding editor of this site for this excellent video “Would You Ever Join A Start-up MLM Company?”

We’ve been warning people for years not to join prelaunches or startups, but have not had the stats to back up our claims. In our article ‘The Wizard Of Odds’, we cited the accepted industry failure rate of 90% in the first year, followed by another 90% failure rate in the second year. The chances of a prelaunch company seeing its second birthday is about 1%.

Lou has gone a dozen steps farther by gathering some powerful information from the Direct Sellers Association and Direct Selling News. Here are some points he makes in his video:

  • The number one fallacy is that you have to get in early. It’s true for pyramids, but not for legitimate MLM companies.
  • In the US in 2008, sales by MLM companies were $30 billion. Worldwide in over 100 countries, sales were $114 billion.
  • At any time, there are 2000 or more MLM companies in operation. How do you choose?
  • Tens of thousands of MLM companies have come and gone in the past 60 years.
  • Only 65 companies in the World, and only 44 companies in the US have ever reached $100 million in sales.
  • Many startups claim they will be the next billion dollar company, but in 60 years, only 11 companies have ever reached $1 billion in sales.
  • Many of the $100 million and $1 billion companies are now out of business.
  • Perhaps 50000 companies have come and gone, but let’s be conservative and say 10000.
  • We are looking for long term leveraged residual income. That’s quality, generational income.
  • What are your chances of reaching your goals if your only criterion is to get in early?

whichslotHere is Lou’s math …

If we consider a $100 million company still in business to be successful, and if only 65 of 10000 companies have ever attained that, we have just a 0.65% chance of picking a winner based on getting in early.

Lou warns, “There’s a 99% chance you will fail. Do you like those odds?”

How about picking the next Billion Dollar Company? The odds are 11/10000 or about 0.1% That’s a 99.9% chance of failure.

Lou recommends, “Do your due diligence carefully. Choosing the wrong company can cost you time, money, reputation, friends, and worse, your dreams. If a company goes down, it doesn’t matter how good you are.”

We say that if you are in the wrong vehicle, it doesn’t matter how well you drive.

So don’t join a company with less than five years of consistent respectable growth. For your due diligence, Lou recommends his 12 Critical Success Factors.

Dabbling is dangerous. Take the choosing process very seriously. You need more and better criteria than just getting in early. We recommend making sure that your company of choice has The Five Pillars. All of them.

Protect yourself and your family. You can start making an educated decision by reading the free report ‘Big MLM Lies.’

Bob and Anna Bassett
Tom ‘Big Al’ Schreiter’s 25 MLM Skills
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{ 3 comments… read them below or add one }

Gavin Evans August 25, 2015 at 12:43 pm Thumb up 0 Thumb down 0

I only ever join new MLM businesses because as an internet marketer it gives me a good chance of ranking in the search engines for the product name from the get go. The downside is that new businesses come with issues so for me it really is a huge trade off! Some you win, some you lose. But that’s life!


Bob and Anna Bassett April 30, 2014 at 2:47 pm Thumb up 0 Thumb down 0

Terrance, you are 100% right!

Somebody has to be the first to sail west in a wooden boat to make sure the world isn’t flat and we won’t all fall off into a hellish foaming void to be lost forever among the demons, but it ain’t gonna be me.

Somebody has to be the first to make sure that new mushroom under the pine tree isn’t poisonous and we won’t all die a writhing gibbering drooling bug-eyed death, but it ain’t gonna be me.

Somebody has to be the first to strap into a Bell XS-1 to make sure that when we break the sound barrier we won’t all vaporize into subatomic particles and be reassembled on the ground as lizards and snakes or double-knit polyester pant suits, but it ain’t gonna be me.

Somebody has to be the first to volunteer to test that new cancer fighting, hair renewing, grass growing, fuel saving, limb regrowing additive, but it ain’t gonna be me.

Somebody has to be the first to join a new MLM company to make sure they won’t max out their credit cards and remortagage their house and lead their friends and family on another costly golden goose chase only to have the new company fail before its second birthday as most do, but it ain’t gonna be me.

Given the odds, most people will prefer to try something that has passed the test of time.

If you love risk and adventure, go ahead. Cast off and hoist the sails, lunch on fungi, strap in for the supersonic ride of your life, cross your fingers and swallow that pill, but don’t ask us to join you.

Mr. Mortgage tells us not to take that chance, and I think you will find that very few informed people will take such risks.

Terrance, your best phrase was ‘willing to live with the potential downside … ‘

We are not willing to live with the downside, and we’ll bet that most will agree when they have the right information.


Terrance Brandon March 12, 2014 at 3:22 pm Thumb up 0 Thumb down 0


I respectfully disagree. If everyone followed this advice the industry would have been stillborn, because every MLM that has passed both the 5 pillars test and the test of time was once a start up. Someone had to agree to be the Master Distributor that started them all. I would amend your advice to say that having done your due diligence, if you still feel in your gut that you should join the start up and are willing to live with the potential downside, by all means do so.


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