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Costco Meets Facebook: The Extraordinary Growth of Solavei

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Costco Meets Facebook:   The Extraordinary Growth of Solavei

How a social commerce start-up went from $0 to $100 million in revenues in 8-1/2 months. From the June 2013 of PRESIDENT&CEO Magazine.

To listen to the entire interview, click here.

Ryan Wuerch is no stranger to growing middle market companies.

The founder and CEO of Solavei, a social commerce company based in Bellevue, Washington, Wuerch has already built and sold three telecom-related businesses, including, most recently, Motricity, a mobile data services company that he grew into a publicly-traded enterprise valued at over $1 billion. 

His newest venture, Solavei, has grown from start-up to $100 million in revenues in a mere eight months, with growth showing no end in sight.  The company provides mobile service, including data, text and voice, for a flat fee of $49 per month, and allows its customers to earn commissions on referrals.

"The very things that you do every single day as a consumer, our objective for our members is that we want that to cost less for them."

“I have been in the telecommunications and technology industry now for almost two decades,” Wuerch tells PRESIDENT&CEO.  “I retired from Motricity in October 2011, and I really saw four key trends on a global basis converging.  One, I saw the economy –  in particular in the United States – was in the worst condition since the Great Depression – 50% of United States households making less than $45,000 a year.  Individuals are looking for a way to either save or earn additional income. 
“The second trend I saw was how social media today has changed the way we act, the way we interact, the way we take in information, the way we share information. I mean, who would have thought 5 years ago that today you can literally have hundreds – and some people have thousands – of connections that you are associated with, and the things you share, five years ago you would never share what you do now socially.

“The third trend I saw was that of mobile.  It’s obviously an industry that I’ve been a part of, but I really saw that the mobile device that we have today – there are 331 million mobile phone users in the United States, 5 billion around the world – has become like a DNA imprint. You cannot think about not having a mobile phone with you.

“The fourth trend I saw involved an industry we’ve all been a part of since we were born, the advertising industry.  In Nielsen, they came out with a research report saying that 47% of peopletrust ‘big media’ advertising – radio, television, print. What I saw that as is 53% of people do not trust it unless they have a really specific relationship with the media imprint they are getting.  At the same time, I saw what was happening with companies like Groupon and Amazon, where they’re using referral marketing and affiliate marketing, and ultimately seeing an industry that is a $100 billion+ industry – that of the direct-selling industry with companies like Avon and Tupperware – where individuals had helped create billion dollar companies, but they were personally benefiting because they were the voice of that brand.

“Well, ultimately I saw those four trends converging and it was in October of 2011 that the vision of Solavei came out on paper, and everything we have created today is all part of what was put on paper in 2011.”

But Solavei’s model extends well beyond creating an “Avon Lady” opportunity for mobile service.  Creating the Solavei network via mobile plans is merely the first step in a much larger endeavor.

Wuerch explains: “At Solavei, we have created a social commerce platform.  Think of it as sitting on top of all the social networks that are there today.  This platform enables our members to really do four things.  Number one, to be able to buy and use goods and services at a great value.  Number two, these are the very goods and services that you are using every single day, and that are already part of your monthly budget.  Number three, the platform enables our members to be connected to the social community which we have here at Solavei.  Number four, we enable our members to get paid for doing something they do already every day when they share with friends and family.  And in this case, instead of spending billions of

dollars in advertising, in media, we actually move those dollars directly to the greatest advertising voice we believe is there today, and that is people.”

When asked about the similarity of many aspects of Solavei’s model to other innovators – Costco (membership), Avon (direct selling), Amazon (online distribution platform) – Wuerch isn’t reticent.

"Solavei’s model extends well beyond creating an “Avon Lady” opportunity for mobile service."“You’re dead on.  You know, you think about industries. Take Google.  If Sergey and Larry would have created an algorithm prior to the internet becoming a place where you needed to actually aggregate all this information, it would have been way too early.  If Jeff Bezos at Amazon would have tried to create books on the internet prior to there being an internet where e-commerce had started actually bubbling up, it would have been way too early.  Today, for us, it’s the convergence now between social media, the wide adoption of mobile and people actually living through that device, the economy, the very trends we spoke of earlier.

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