Solavei was a social commercenetwork offering contract-free mobile service in the United States, known for its use of incentivizedreferral plans and its social network advertising program.[1][2][3][4] In addition to its mobile phone services, Solavei operated a social commerce network for its users.[1][5][6] Ryan Wuerch founded the company in 2012.[1][6] As of 2013, Solavei had 140 employees and was valued by investors at $120million.[6][7] The company has been described as a multi-level marketing (MLM) company,[8][9] or of being very similar to a MLM company.[10]
On June 18, 2014, the company filed Chapter 11 bankruptcy.[11]
Solavei announced on November 19, 2015, that its carrier partner, T-Mobile USA, had terminated its agreement to provide service under the condition that Solavei did not meet expectations. Solavei customers were allowed to migrate to T-Mobile Prepaid for a $10 monthly credit for 6 months and a free month of service. Wireless service was discontinued on December 4, 2015.
Background
Solavei was launched in September 2012 and operated as an MVNO through its partnership with T-Mobile US.[1][6][12] The company's initial offering was a $49 per month, no-contract mobile phone plan for unlimited voice, text, and data.[6][7] In September 2013, the company implemented the loyalty card program Solavei Marketplace.[13] The program enabled users to receive discounts at participating retailers.[12][13][14]
The company used a customer-to-customer marketing model, paying its customers on a recurring basis for referrals.[1] As of August 2013, Solavei had paid out more than $14.4million to its near 280,000 members.[6][7][15][16][17]
Leadership
Ryan Wuerch, former CEO and founder of Motricity, was the founder and CEO of Solavei.[6][18][19][20][21] In February 2012, Wuerch and his team raised $5million in initial seed funding.[18]
Some of Solavei's financial backers included Jonathan Miller of News Corp and David Limp of Amazon.com.[22][23]
Marketing model
Solavei paid its customers for referrals.[1] At its simplest, users earned $5 per month for every customer that they signed up for mobile service.[1][6][24] The income generated was deposited on the Solavei Visa PayCard, which could be used wherever Visa is accepted.[1][6] Solavei Visa PayCard also allowed members to gain access to Solavei Marketplace that was launched in October 2013, which featured cash-back discounts for a variety of retailers.[25]
The company used its advertising and sponsorship funds to compensate its members to build distribution networks.[1] Through sharing on social media outlets, grassroots campaigns on YouTube, and regional events, Solavei had developed a business model that relied on customer-to-customer interaction.[1][17]
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