Thursday, April 14, 2011 7

There's Something In The Water

A Texas-based company is marketing a brand of bottled H20, called Evolv, that supposedly can ward off disease and boost your aerobic capacity. It’s fascinating case study of a notable trend—nutritional products that are being sold with a mix of miracle health claims and complex financial structures that promise easy riches. Our advice? Investor beware.

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Photo: Photo by Tom Schierlitz

I'M STANDING NEAR THE ENTRANCE TO A LARGE CONFERENCE ROOM inside a Hilton hotel in Del Mar, California, as Ron Sineni, an entrepreneur with a pitchman's energy, tells me how rich I'm going to get by selling a brand of bottled water called Evolv. I'm on hand—without identifying myself as a journalist—to hear the presentation given to current and potential "Evolvers," people who take a deep dive into the product by purchasing it and reselling it to others. Not long after this meeting, I'll make it clear to Evolv's management that I'm researching a magazine article, but first I want to take in a sales talk.

It's some talk: even before the presentation starts, Sineni is making Evolv sound too good to pass up. "What we have is incredible!" he tells me.

Sineni, 43, says Evolv is no ordinary water. It's manufactured by a Dallas, Texas–based company, EvolvHealth, whose owners infuse plain old H2O with a secret formula called Archaea Active, which supposedly can ward off cancer and heart disease while increasing oxygen uptake by red blood cells, boosting longevity and athletic performance all at once. It certainly sounds incredible—like a miracle tonic laced with EPO—and Sineni can't help saying "awesome" over and over as he describes it.

I explain that I'm not much of a salesman, just a guy who's down on his luck and looking to make some cash. Don't worry, Sineni says, half shouting now because somebody has amped things up in the conference room by blasting anthem rock. I'll need only two things to succeed: "belief" and "duplication." I have to believe that the water works, of course, but I also have to believe in the duplicative power of Evolv's complicated fiscal geometry, which is at the core of the entire enterprise.

As I'm already aware, Evolv is not sold in stores but person to person, by individuals like me, and I can make money in two ways. After paying a $49.95 membership fee, I can buy Evolv wholesale for $55 a case and then recruit other "customers" to buy it at a markup, for $65 per case. The real riches, however, lie in convincing others to sign up as independent sellers. These people will constitute what's known as my downline. When I have a downline established and I buy at least two cases a month, I can become a "managing executive" and, through an elaborate series of bonuses, earn payouts based on the quantity of cases ordered by me and my recruits. Evolv's higher-ups pocket the bulk of the profits, but I can make out handsomely, too.

From there, who knows? I can become an "executive director" if I buy four cases myself ($220) and assemble a series of downline members who purchase a total of, say, 500 ($27,500). All I have to do, Sineni says, is find lots of new sellers, creating "two Brians, six Brians, ten Brians." That will be easy, because I'll be getting in on the ground floor. The company launched in 2009, and at the time of this meeting—September 2010—the downlines are still in their early growth stages. Besides, Evolv will basically sell itself. Who wouldn't want health and endurance straight out of a bottle?

I TAKE MY SEAT in the room, and soon I'm joined by about 30 other people who possess what Sineni calls "business horsepower." Some have already signed on, some are just looking, and some appear to be Evolv boosters, here to help establish the company's credibility. One of them is Tamilee Webb, star of the Buns of Steel exercise videos from the eighties. Another is Dennis Newman, a 1994 U.S. national bodybuilding champ, who sometimes shares his story with Evolv prospects. He sits in front of me, turns around, shakes my hand, and gives me a bottle of the water. Newman says it protects him against cancer, a disease he knows a thing or two about, since he suffered from leukemia in the mid-nineties. Medical treatments put him in remission, and now, he says, Evolv is keeping him fit and cancer free.

"It helps a healthy inflammatory response in your body," he explains. "You have good inflammation and bad inflammation. Good inflammation is like when I was bodybuilding and you get inflamed muscles. And bad inflammation is all the disease and cancer and everything else. And the dehydration of oxygen in cells."

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