Dev Wadhwani : Banker to Entrepreneur
Dev Wadhwani gave up a flourishing career in banking when he discovered direct selling nearly a decade ago.
Dev, a lot of people have been surprised to find an investment banker in the network marketing business. It’s not exactly a career path chosen by others in the ilk. How did you end up here?
Network marketing chose me! A very close friend of mine signed me up. I just bought a product. After using the products and services of the company, I started believing in them. The price point seemed pretty attractive and the possibility of earning money, promoting something that I believed in made a lot of sense to me.
What is your background?
DW: I am born and bred in Mumbai and moved to the US to get an MBA. I am also a CFA. I worked on Wall Street for around 8 to 9 years as a Fund Manager and Investment Banker. My background is quite analytical and I am more a mathematician than a businessman.
How did you discover direct selling?
In 2005 when I was running a Hedge Fund in Hong Kong, some friends of mine there were considering signing up with QNet as distributors, but they were a bit skeptical since they thought the QNet business model was a little too good to be true. Since I was the analytical guy in the group, they approached me to study the business model and give them my opinion. This included factors like how the compensation plan worked and how commissions are structured and paid out.
It’s fairly easy to investigate companies in Hong Kong. The laws are very strict and they need companies to be transparent. In the process of my investigation over the course of a few months, I was intrigued at what I found. I was amazed at the long term income potential of this business. I knew I had to try it out myself. So, you can say this business found me, rather than me finding the business.
What was the switch like from pure banking to hard core marketing? Was it difficult?
The two professions are worlds apart. As an investment banker, I never had to leave my desk. I never went out, never had to pitch anything to anyone. I would only brief the marketing guys as to the market conditions and what they should be recommending to clients. In complete contrast to that, in direct selling here you are in the frontline, selling stuff yourself to people. This made me uncomfortable in the beginning because it was not my area of expertise. I had never done any kind of marketing in my entire life before this.
However, I saw the potential this business had and quite frankly I was tired of banking. Here was a fantastic business selling great products and services that people needed on a day to day basis. It was not just about convincing people but about getting them to change their spending habits.
What did you see in the business model which convinced you about its success?
What people don’t understand is that direct selling business cuts out the middle man. We don’t spend on advertising or promoting the products the traditional way. For example, a can of Coke that sells for a dollar actually costs only 8 to 9 cents to produce. 90% is paid out to various distributors, marketing companies, brand ambassadors and so on. This convinced me of its success but this is where the misunderstandings about the direct selling industry also come from. One has to understand that when you sell a product at a fair price, and your customer is happy to pay that price for a product that is ethically and accurately described, it cannot be that such a business is dodgy and illegal.
How long did you take to get your first customer?
I was fortunate in that I came from a finance background and that gave me a lot of credibility. The first person I spoke to was my chartered accountant. I asked him to look at the business from a sceptic’s pespective. I wanted him to give me an opinion. Believe me, my CA got it faster than I did. So, to answer your question, it took me a day to get my first customer in the business. After that there was no looking back.
People come into QNET from many different backgrounds. And most successful leaders in QNET today have come up the hard way. But in your case, it seems like you made a seamless jump from a successful banking career to a successful networking career! How is that even possible?
People have this perception that I was born with a golden spoon! Nothing could be further from the truth. I grew up in a middle class Indian family and frankly, we were broke through most of my childhood. My father worked for the Indian government’s national airline as a purser and suffered from repeated bouts of ill health, which meant there were hefty hospital bills to pay all the time. It didn’t help that he had to go on leave without pay each time he was hospitalized.
Unfortunately, as a child I inherited a severe form of eczema (a skin condition) from my father that left all exposed parts of skin with ugly rashes and break outs. Going to school was a nightmare because kids that age can be rather cruel and because of my appearance at the time, I used to be called a leper! No one wanted to be friends with me. The condition subsided eventually when I was 11, but my self-confidence was at an all time low and to compound the problem, I developed a terrible stammer.
Finally, when I was 16 my parents separated and the same week my younger sister, died in a car crash. It ripped my family apart and was quite possibly the lowest point of my life.
That could not have been an easy, especially at that age. Which makes your transformation all the more amazing. How did you overcome such a challenging phase in your life?
Because of my circumstances, I had a lot of pent up aggression. I decided to channel it into sports. I started playing badminton and tennis and eventually got good at it, which helped me gain self-confidence. It was only when I was around 18 that I finally got over my stammer. If you meet any of my classmates from high school today and tell them Dev Wadhwani is a public speaker, they’ll laugh themselves silly!
Around this time, I also struck my path and being good at numbers, got into banking. I struggled at low paying jobs because I didn’t have an MBA. My mother took out loans to eventually send me to the US to get an MBA. Even then, it was not smooth sailing. I had to drop out due to lack of funds and take a break. I remember one Christmas I had $7 in my pocket and survived on it till the New Year.
Once I dropped out, I joined a private equity firm and started doing quite well. One year I got a $40,000 bonus, which I invested and turned into $7 million! That’s when my life changed. I went back to school and got my MBA. Since then, I have dabbled in every facet of banking. There have been some good years and some bad years. But being broke doesn’t intimidate me any more. I know I can pick myself and do it all over again if I have to.
That’s quite a story! How different was it to mentally adjust to networking from banking?
In August 2013, I will have finished 8 years in network marketing with QNET. By nature I am not a natural networker. It has been a real test of my character. I came from an industry where the work I did was so complex that sometimes even my boss didn’t understand what I was doing. Network Marketing changed who I became. For the first time in my life I was forced to deal with people and not numbers. And I think deep down in my soul, I just loved it.
I had built this armor around me with my ‘numbers geek’ persona. I was never liked by people because I tended to be a loner and a know-it-all. Working with people has changed me over the years.
Is there one thing you can identify as being a catalyst for your transformation?
Out of all the programs that I have attended since my time with QNET, ISB has had the most powerful impact on me. It literally flipped a switch in me. I haven’t missed an ISB Bootcamp since my first one 7 years ago. It’s something I truly believe in. ISB played a major role in transforming me into a better person. I am now a happier person. I have let go of a lot of mental baggage and focus on progressing.
My relative success in the business is a byproduct of the change that I was able to go through because of that.
You have been building your direct selling business in in different countries. What is the main difference between India and other places?
My team operates in more than 20 countries. But the Indian market is a goldmine. Here we have educated, talented people who are hungry for opportunity. The only reason I have managed to be successful here is not because I am a great talker but because you are dealing with people who are thinkers. They are smart, and are looking for opportunies that allow them to achieve financial freedom. If you do it right, you could create a multi-crore income for yourself, which is not possible in the corporate world. I am proud to say that my organisation has graduates from IIMs and IITs who gave up cushy jobs in MNCs to join the direct selling business. They love the products and see the advantages of the business. Many of them were doing marketing for leading FMCG companies and they felt that instead of doing it for a corporate entity, why not do it for themselves?
Do factors like level of education or the quality of people who become Independent Representatives impact the business? In India one of the most serious problems QNet (and the direct selling industry in general) have faced arise from mis-selling and misrepresentation.
It is very important that customers read the fine print before signing up. This is not just applicable to QNet and other direct selling companies. If an individual is going to make a purchase online for a substantial amount, he or she must first do their due diligence to understand what they are buying, what the terms and conditions are, if there are any restrictons, etc.
At QNet, customers have to fulfil a detailed checkbox process before they can buy products from the company’s e-commerce portal. But in some cases, the customer doesn’t read the fine print or any of the documents they are signing. This can go a long way in preventing people from falling prey to misrepresentation.
The best way to prevent this is through training and education. But due to the uncertain and hostile environment for QNet in the last 2-3 years, we have not been able to conduct proper workshops and training programs. The company conducts many online programs and webinars, but I believe that educating people on ethics of the business needs to be done face to face.
Tell us about the challenges you faced since you have been with QNET and what that has taught you.
Apart from the behavioral transformation I was forced to go though at a personal level, I truly came into my own in the business due to the challenges the company faced in India in 2008. A lot of people in my network dropped out at that time and all my cynics and critics used the opportunity to crucify me.
But it was also the time that my relationship with the company increased manifold and I saw the heart of the company. I was able to see that the people in the company cared and will always do right by us.
I remember one of my mentors saying– A storm doesn’t last forever. At that time it sounded philosophical. But looking back I realize how true it was. I built my strongest team during that time. We kept paddling against the current and eventually the tide changed. And today, I am proud to say that we have one of the largest teams in QNET.
What is the one important thing that you have discovered about yourself in these 8 years with QNET?
I break up my life into ‘living’ and ‘existing’. I went from $7 to $7 million. I started living the high life. I worked hard and partied hard. I was living the dream. But then, I realized I was just existing, because once I had attained the life I wanted, there was nothing else to aspire for.
And that’s when the concept of passive income helped me dream again. If a Bandra boy from nowhere could become a millionaire in his 20s, there is no reason he can’t become a billionaire. The fact that every Tuesday, I open by Virtual Office and see the kind of money I am making, gives me the latitude to start living again. I take my billionaire dream very seriously now.
Networking has given me the ability to take bold business decisions again after failing in the past. I am now investing in ventures that I am passionate about. All this is possible because of the nature of the income.
What is your advice to those who want to make a career in direct selling?
The only advice that I would like to give is this is not a ‘get rich quick scheme’. That’s the general perception, but I am here to tell you it’s not. It requires hard work. At the end of the day you reap what you sow. I have a motto that I use for my business —Slow is fast and fast is slow. What this means is, when you build a foundation with fewer number of people, but spend time and effort in training them, and grooming them, you have a solid foundation to build upon. It takes time, but its worth it. When people only care about the money they make and take shortcuts to make that money, it implodes and it implodes on them badly.