As you might expect, we do daily searches across the web for the term ‘Social Commerce’. Lately, we’ve been seeing a lot of results like this…

The company is Solavei.

First impression was that this was some sort of scam. Just the way the comments were posted, the fact that so many seemingly non-connected people were making the same posts, etc.  Indeed, do a search for ‘Solavei Scam’ and you’ll get quite a few results. Interestingly enough, some of those hits are infact people trying to get you to join Solavei! Smart, huh? They’ve cottoned on to the reality that many will see this as a scam and so will look to confirm or deny their suspicions. What better way to make a pitch!?!

The idea of Solavei is simple enough. Sign up to an unlimited mobile phone plan for $49 per month. Then, for every three people you get to sign up, you get earn $20. So, sign up 9 users and you’ve paid for phone bill for one month – & still have enough left over for a Frappucino!

Sounds like Amway, right? Well, ok, not Amway specifically but one of those pyramid selling schemes where the entire business model assumes that each user signs up many more and when they do so, they earn money in return. Sometimes, LOTS of money! Multi-level marketing is the proper name for it,  if we want to be politically correct.

And that’s pretty much exactly what it is.

BUT…isn’t it also a good example of Social Commerce?

Yep!

We’re still not really sure how we feel about it. After all, our mission is to create genuine and sincere word of mouth across the social networks. Somehow this seems less than sincere. Then again, to be fair, anybody who’s inviting you to join the service is already a member themselves. So, you use it, you like, you invite me to share in this great service. What’s wrong with that? Sure, you’re getting paid for referring me (& then I can also get paid to refer others) but does the fact that everyone’s getting paid for a referral make it any less genuine? Maybe. Maybe not.

This is certainly not the first time that a company has paid a bounty for a new customer. Ever heard of affiliate marketing?

Maybe it’s just a fine line between Social Commerce and a Pyramid Scheme.

According to John Cook at Geek Wire, Solavei recently closed a $3.6 million round of funding, bringing the total raised to $7 million. That’s pretty serious! They also seem to have some serious people running the company, including a former US Congressman (should that make us feel safer or more wary?!?).

But that’s another weird thing about the team at Solavei – their key strengths seem to be that they were once somebodies. Of course, we all know that your previous work experience largely defines your value to the new company, but somehow it just seems odd to us that they’ve highlighted everybody’s former glory. Again, in the interest of fairness, we don’t know any of these folks by name or reputation so we’re certainly not suggesting they are anything but supremely qualified & skilled individuals. We’re just saying it sounds a bit odd.

So, take a blatantly obvious (& unapologetic) multi-level marketing business model, lead by a group of former somebodies, add the power of the social networks and what do you have?

You have something that sounds like a scam but infact may just be one of the smartest businesses around.  For us, the jury is still out.

If the product ROCKS! then we don’t really see anything wrong with the business model. If the product and service turns out to be a DOG, then I guess we’ll sit back and say, ‘It always sounded like a scam!’.

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