Americans love nothing more than getting a deal. So, it’s not a surprise that Solavei, a controversial new mobile phone service that rewards customers for signing up friends, co-workers and relatives, is gaining traction.

The Seattle area company, led by former Motricity CEO Ryan Wuerch and former Congressman Rick White, said today that more than 65,000 people have signed up for the $49 unlimited voice, data and text service plan since it launched on September 21. As part of those sign ups, the company also announced that it has paid out $1 million in member commissions.

Solavei is one of more unusual startups we’ve encountered this year, driven in part by a controversial model that rewards customers for essentially becoming the boots-on-the-street marketing department. (Readers have debated the merits of the company’s business plan at length, and there are no shortage of critics of the Solavei model).

Ryan Wuerch

Here’s how it works: Users who sign up for Solavei earn money for each new customer they recruit. Recruiting three new customers, dubbed a “Trio,” earns users $20 per month. Three trios, or nine new customer additions, equates to $49 (or the cost of one’s monthly service).

In a press release today announcing the customer milestone, Wuerch said that the response has been “tremendous” to the Solavei business. Investors in the company include Jonathan Miller, the chief digital officer at News Corp. and former CEO of AOL; David Limp, vice president of Kindle at Amazon.com; and Gary Adams, an oil & gas executive from Oklahoma.

As we noted a few weeks ago, the company also is drawing on celebrity endorses and member testimonials to draw interest in the concept. The message has the feel of a late-night infomercial.

Here’s actor Stephen Baldwin talking about the concept.

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Comments

  • Guest

    In the analog world this is called a pyramid scheme, no?

    • http://twitter.com/aaBowlin Austin Bowlin

      I’m not involved with Solavei – nor do I know anyone who is – but it’s likely fairest to refer to it as a ‘pyramid model’ rather than a ‘scheme.’ I have yet to hear of any foul play that would warrant the ‘scheme’ part. Have you heard anything to the contrary?

  • http://profiles.google.com/joeconnector Joe “The Connector” Kennedy

    I am proud to be one of the many Founding Members at Solavei – and one of the thousands of people who have received some of those $1 million dollars already paid out in commissions. Call it whatever you want – it’s saving people money – and giving me an income after being without work for over 3 years! You can benefit by signing up with my Presidential Team by going to http://www.49DollarCellService.com

  • Jeff

    Snake oil! Snake Oil!

  • Jared McInelly

    And Joe’s comment is exactly why I will stay as far away from this company as I can.

  • http://www.facebook.com/St1ckE Caleb Sitzmann
  • Guest

    I’ll say what many people point out: EVERY successful business is a pyramid. That is the model of working from a CEO to the rest of the executive team, management, and down to the producers, sales force, even machines and processes helping to create more leverage. The difference with referral marketing is that someone can work their way to the top of their own pyramid without having to be CEO — something you can’t do in a normal business structure.

    You might find referrals ANNOYING — and I wouldn’t blame you, because a lot of people become single minded and can no longer have a conversation with you without trying to sell you something. But that’s a different matter as to whether it’s a legitimate and even BENEFICIAL business model.

    If you are JUST a customer of Solavei, you’re getting as good or better a deal than any other “no contract” (pre-paid) service out there. If you’re willing to buy a non-subsidized phone, you’ll save $30 to $50/month vs. contract rates for unlimited everything. (And Solavei’s unlimited plan includes 4 gigs of full speed data — more than any other pre-paid, and more than most contracts.)

    If you WANT to, you can also refer Solavei, earning $20/month for every “Trio” (3 active phone users) you refer, and another $20/month for every Trio they refer. Since this is optional, doesn’t cost you more to make the referral, and doesn’t cost your customers more, and every customer gets a good deal … how would that be a scam or scheme or anything else you might want to call it?

    So those calling “snake oil” are either just ignorant of the facts, or they’re trolls trying to get a reaction. Again … annoying may be a legitimate complaint. But if it costs less than you’d pay elsewhere, why wouldn’t it be an honest business model?

    I would use these same principles to judge any network marketing company. Many DO overcharge for their product. Many are on the edge of just shifting money around, which is a scheme. But those that bring an honest product at an honest price should be welcomed into the marketplace like anything else. And members need to just learn the difference between sharing and being obnoxious.

    For the record … I moved from AT&T to Solavei. I’m saving money every month and getting a lot more for my money. And I won’t put my contact info here because I want to be clear that my comments aren’t motivated by sign-ups, but by the fact that I’m happy with my service AND that that I want people to start thinking about the difference between network marketing and scams.

  • BeenThere

    Don’t believe the numbers. If you know Ryan Wuerch you know that half the things that come out of his mouth are exaggerations and the other half are outright lies. Just Google him.

    • Shawn

      I work at a Solavei kiosk in the mall and signed up my 103,000 member, so don’t talk to me about numbers when you’re not working the business. Now, for how many people are actually still enrolled with the service is a different number…

  • http://www.facebook.com/JamesAndrewChapman James A. Chapman

    The numbers always break down the same: 30% of the people are critics and resist change, 20% of the people are early adopters and have the ability to recognize trends and opportunities, and 50% of the people are fence sitters and stand back to watch which way things will go. The early adopters are the test pilots. They work the bugs out and ultimately determine if the thing will fly. They tend to risk the most but because they are early adopters they also can benefit the most. When the early adopters prove the thing will fly then more and more fence sitters jump aboard. The tipping point happens when enough fence sitters jump on board to create a massive trend. I’ve always been an early adopter, and I got onboard with Solavei early on. I did my due diligence. I looked at Ryan Wuerch and I also looked at the major players that aligned with him. Credibility wasn’t a question for me. Besides, what was my risk? $49? Most “MLM’s” require anywhere between $250 to $1000 to get started. $49 is no risk, especially for unlimited 4G data, text and talk. It’s freaking brilliant. I referred 12 subscribers and got my $650 fast action bonus in my first month. From those 12 I now I have 119 Trios and I’m making $2500/month. So are you a critic, an early adopter or a fence sitter? Guess what – it’s still early. 2013 will see over a million subscribers added to the Solavei network. And guess who will benefit? It all depends on which side of the fence you are on.

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