Why did Solavei Have To File Chanpter 11 (Bankruptcy)

First, lets see what Solavei was all about.  Here is a direct quote of a review of Solavie from :

http://www.npros.com/press/2014/6/18/3236/solavei-files-chapter-11.htm

"Solavei Review

Solavei, scheduled to launch in September 2012, is a multilevel marketing company offering a social media platform and mobile application that provides contract-free mobile service and pays consumers for adding new members.

The Solavei Mobile Service is a mobile virtual network operation (MVNO) that utilizes T-Mobile’s nationwide 4G network.

Consumers can sign up for an unlimited voice, text and data plan for $49.00 per month and can earn income by introducing the service to others through Solavei’s social media platform and mobile application.

To sign up with Solavei, consumers can either use their own Solavei-compatible phone or purchase one of Solavei’s phones, which start at $159.00. Monthly mobile service is $49.00. The Solavei app (available for Android phones) covers everything Solavei members need to enroll friends and family, check on how much they have earned, and connect with their personal network.

Compensation Plan

Solavei members earn $20.00 per month on every three mobile-service members (called a Trio) that they or someone in their network introduce to Solavei. When members have more than three Trios in their network, the income generated is greater than their monthly mobile service plan cost of $49.00, making it essentially free. Members earn a Fast Action Bonus for Trios they directly enroll in their first 60 days. Solavei members earn increased monthly pay as their network grows and they advance in rank."

Now, lets look at the time of existence, less than two years.  At Mentoring For Free, we tell people NOT to join a company that is less than two years old.  Why? Simple, most new companies fail within the first two years.  Solavei is a great example.  But that is not the only reason.  I believe that the main reason they are failing is the products offered.  Their main product was mobile service.  What is wrong with offering mobile service when virtually every one wants it?  Competition!  There just is too much of it.  How do Solavei distributors compete with all those blaring ads on radio and TV?  They can't.

The other problem Solavei distributors had is the fact that this service was available only in the Continental US and, looking at the coverage map, somewhat limited coverage at that.  The really successful MLMs are available in most countries in the world giving their distributors a much wider audience.

The other aspect of the truly successful MLMs is that they offer products that women will be attracted to, products women will develop an emotional attachment to.  After all 68% of network marketers worldwide are women.  I don't see too many women getting really excited about mobile service.

So if you are looking for a company, do your homework and find out as much as you can about the company.  Make sure it has the following :

1.   The people who own/run the company have a good reputation and have actually built a MLM business.

2.   That the company is at least two years old and that they are in trending industry.

3.   Make sure they offer products that add value to people and are value priced.  The products must be something physical that you will get in the mail and preferably consumable.  A franchise doesn't count, a web site doesn't count and training and tools don't count.

4.   Make sure the compensation plan is structured in a way that it will pay the part time distributor.

5.   Make sure you have available a simple, proven duplicable system to build the business.