Fyre Festival: How a marketing paradise turned out to be the world’s biggest festive disaster

Business How To’s

28 February 2019

Fyre Festival: How a marketing paradise turned out to be the world’s biggest festive disaster

  • Posted by Awfis Editorial

To give you a quick recap, the Fyre Festival is one of the biggest failed events the world has seen till date. Conceptualised and established by Billy McFarland, CEO of Fyre Media Inc. (and also of the infamous Magnises startup that gave millennials a chance to live beyond their means; why that seemed like such a great idea no one knows) and rapper Ja Rule.

The festival, scheduled for April 28-30, 2017, on the Bahamian island of Great Exuma, promised a ‘transformative weekend’ and was promoted incessantly by influencers and socialites like Kendall Jenner, Bella Hadid and Emily Ratajkowski. Naturally, the promotion got the attention of countless customers who, in their FOMO-driven rush, went ahead and booked tickets that were cheapest at $500 and going up to $1500. VIP packages at $12000 were astonishingly selling like hot cakes too.

So what went wrong really?

In a word, everything.

Fyre Festival goers were expecting a mind-blowing experience when they packed their bags for the weekend to Great Exuma, Bahamas. However, the reality they got was completely different. And the issues started even before they’d left American soil.

Festival goers thought they were signing up for a customised, VIP-configured flight. Instead, they were met with a crowded airport and chaotic, delayed departures.

And the nightmare got worse (as if it could) once they reached the Bahamas.

The party-goers were looking forward to spending two days in luxurious villas and eco-friendly domes. Instead, they were greeted with half-built huts to sleep in.

They were eager to be wined and dined by world-famous gourmet chefs. Instead they had to subsist on cold cheese sandwiches and salads with no dressing, served in makeshift food tents.

The promised line-up never turned up with many artists having cancelled their gig long before the festival, but none of this was conveyed to the customers until they got to the venue.

The crowds were expecting to party with friends for two weekends on pristine white beaches. What they instead did was struggle to just get a flight back home, which ended up becoming another disaster. Guests were stranded at the airport with no food or water, purportedly locked in a room.

Not exactly what the weekend deal was all about, was it?

Why did the Fyre Festival fail?

For starters, the founders really had no experience in organising an event of the scale that they had promised. What made it worse was that they didn’t live up to their commitments long before the festival had even begun.

The event was to have been organized at Norman’s Cay, an island previously owned by Pablo Escobar, a kingpin of the Medellin Cartel, but on the condition of anonymity. This clause was violated in the launch promo itself and the owners pulled out of the agreement. While McFarland was scrambling for alternate locations, the promos continued to mislead fans into believing they were to spend a glorious weekend at this exotic location.

A $4 million loan meant to be utilized for the event was lavished on arranging luxurious offices in Manhattan. And when McFarland approached organisers to help him with an event he had no clue about, he was taken aback to realize how deep his pockets would have to be. The leave-no-survivors internet abounds with rumours that McFarland is said to have Googled ‘how to rent a stage’ when he got desperate.

Comcast Ventures had planned to invest $25 million into the festival, but backed out a few days before, leaving McFarland scrounging for temporary financing, which he needed to payback within 16 days. He managed that by asking customers to transfer funds towards a smartwatch like RFID-equipped digital Fyre Band that would give them unlimited access to the festival. Advisors to the festival warned against this, citing poor Wi-Fi connection at the site, but McFarland in his trademark overpromise-and-underdeliver went ahead with the plans.

The Fyre Festival continued to fail to deliver on every count. There were no medical facilities, accommodation was below par with soaked mattresses, unfinished tents, lack of running water and poor quality food, no cellphone or internet service, and heavy handed security.

Points to ponder

Does the colossal disaster that was the Fyre Festival have any lessons for the rest of the world?

The question that plagues many investors is how McFarland successfully raised millions to fund his program that had massive loopholes in its initial investment deck itself.

How did some of the smartest investors become victims of this fraud? Do influencers play such an influential role that they can sell even the most badly-planned ideas to serious angel investors? Is being part of the ‘next big thing’ so exciting that people don’t bother to run the numbers and refrain from due diligence? Could a massive ‘vision’ have been sold purely on models in bikinis, social media celebrities and beautiful Instagram photos alone?

In hindsight, yes, there were signs, but it was all a smoke-and-mirrors trick that helped McFarland build a massive pile of cash out of nothing. Today he faces 8 lawsuits, with one of them seeking damages of $100 million. Last October McFarland pleaded guilty and was sentenced to 6 years in prison.

And Ja Rule? He was quick to post on Twitter that “it was NOT A SCAM” and “this is NOT MY FAULT”.

While dissecting the fiasco, many news organisations have drawn parallels between the festival and William Golding’s Lord of the Flies. The Fyre Festival will be studied for years as an example of how not to invest in a deal with a beautiful yet superficial vision.

Budget 2019: 13 Key Takeaways for Startups and MSMEs

Business How To’s

12 July 2019

Budget 2019: 13 Key Takeaways for Startups and MSMEs

  • Posted by Awfis Editorial

Nirmala Sitharaman, the first female Finance Minister of India, presented her debut budget in the parliament on July 5, 2019. She unveiled a slew of reforms and initiatives for MSMES and startups – from reducing corporate taxes to interest subvention. Let’s take a look at 13 key takeaways for small businesses that this budget has to offer.

  1. Exclusive TV Channel for Startups

Mrs. Sitharaman proposed an exclusive TV channel for startups to be operated under the Doordarshan umbrella and managed by startups themselves, which will discuss everything and anything related to startups. The channel will also help in matching startups with venture funds and investors.

  1. Tax Reduction

The Finance Minister extended the lower rate of 25% corporate tax to smaller companies with an annual turnover of up to Rs 400 crore, from an earlier cap of 200 crore. This is expected to encourage more business and profits in the MSME sector.

  1. Budget Allocation Under the Interest Subvention Scheme

The Interest Subvention Scheme was introduced in 2018 by PM Narendra Modi in an attempt to improve the ease of doing business and provide MSMEs better access to market, credit and technology upgradation. The Finance Minister allocated INR 350 crore under the interest subvention scheme for the financial year 2019-20, for 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans.

  1. Uniform Payment Platform for MSMEs

Mrs. Sitharaman announced that the government will create a payment platform for MSMEs to enable easy and secure filing of bills and payment. This is expected to eliminate delays in payment and boost the investments in MSMEs.

  1. Pension Benefit for Small Retailers

For retailers with an annual turnover of less than Rs. 1.5 crore, the FM has announced a pension scheme under the Pradhaan Mantri Man Dhan Yojana, which is expected to benefit more than 3 crore shop owners.

  1. Online Portal for Quick Clearance

The FM also announced that the government is planning to create an online portal for loan clearance for MSMEs. According to her speech, the portal will be able to clear loan of up to Rs. 1 crore in less than 59 minutes.

  1. Legacy Dispute Resolution Scheme

More than Rs. 3.75 lakh crores has been blocked in litigations in the pre-GST regime of service tax and excise so far. The budget has proposed a dispute resolution-cum-amnesty scheme called Sabka Vishwas Legacy Dispute Resolution Scheme, which will allow prompt closure of such disputes, with reliefs varying between 40% and 70% of the tax dues.

  1. Minimal Scrutiny of Funds Raised

For startups and investors who file all the required and relevant declarations, the budget proposes to introduce an e-verification mechanism that will not require any tax scrutiny with respect to the valuation of share premium.

  1. ASPIRE scheme for agro-rural industries

The budget proposes setting up of 80 Livelihood Business Incubators (LBI) and 20 Technology Business Incubators (TBI) in 2019-20 to develop up to 75,000 skilled entrepreneurs in agro-rural industry sectors under the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE).  

  1. Encouragement of Digital Payments

The budget proposed a 2% tax levy on cash withdrawals of over Rs. 1 crore in a year to encourage digital payments across the MSME sector.

  1. Elimination of MDR charges

According to the budget, businesses with an annual turnover of over Rs. 50 crore must offer low cost digital modes of payment. The customers and merchants of such businesses should not be imposed with any merchant discount rate (MDR) fees.

  1. Faceless IT Assessment

In an attempt to reduce harassments faced by taxpayers, the budget has proposed to launch an electronic mode of income tax assessment with zero human intervention.  

  1. SFURTI Scheme

The budget proposes setting up of 100 new clusters during 2019-20 under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries (SFURTI), enabling 50,000 artisans to join the economic value chain.

Conclusion

Startups and MSMEs are crucial contributors to job creation and, consequently, a strong and stable national economy. The measures announced in the 2019 budget, if properly implemented, are sure to help incentivize young firms in boosting job creation and thereby bolstering the startup and MSME ecosystem in the country.

Cricket Fever: 5 Management Lessons to Learn from Iconic World Cup Moments

Business How To’s

02 July 2019

Cricket Fever: 5 Management Lessons to Learn from Iconic World Cup Moments

  • Posted by Awfis Editorial

ICC Cricket World Cup 2019 is in full throttle and Indian fans are full of hopes, what with our Cricket team having had a brilliant run with only one loss in its kitty so far.Despite the game’s immense popularity in the subcontinent, very few actually ponder over aspects of the game that can turn out to be invaluable management lessons. So, we decided to put together fivelessons we learnt from some of the mosticonic World Cup moments. Take a look.

  1. Lead from the front

The quality that differentiates a great leader from a good leader is the ability to lead from the front and take calculated risks. A glowing example is the 2011 World Cup final, when an out-of-form MS Dhoni, the then Indian team skipper, came down to bat at number 3 ahead of the in-form Yuvraj Singh. While spectators and experts were left puzzled, no one could have predicted the kind of game-changing innings MSD played in that match, which eventually led India to its first World Cup win after 28 years!

This is what great leaders are made of – they are willing to take calculated risks and lead from the front even in difficult circumstances.

  1. Build on your strengths

While it is crucial to identify and work on areas of improvement, it is equally important to not lose sight of your core strengths, despitewhat conventional wisdom suggests. A case in point is the 1996 World Cup finale when the then Sri Lankan captain, Arjuna Ranatunga, went against the conventional wisdom of batting first.

If the trends of the past five World Cup finals were to be believed, teams that batted first had invariably emerged as the champions. However, Ranatunga knew that his team’s strength lay in chasing rather than defending scores. His decision to play to the team’s strength coupled with his courage to challenge the conventional approach led the team to its maiden World Cup victory.

  1. Learn to work without your best resources

While it is natural for any manager to depend on their best resources, there can be circumstances when your best resource may be unavailable. Great leaders know how to cope up with unavoidable harsh conditions and still emerge victorious.

A good example would be the 2003 World Cup, when Australia had to play without its star player and, arguably, the best leg-spinner in the world, Shane Warne. The media was quick to write off the entire team even before the first ball of the tournament had been bowled. However, the Australian skipper, Ricky Ponting, was unruffled and went about his way to lead the team to a spellbinding World Cup win.

  1. Keep personal adversity separate from professional work

It is quite natural for most of us to succumb to adversities in personal life and let them affect the quality of our professional work. However, great leaders have an uncanny ability to isolate both the aspects and bring out the best in them and their team.

A famous example is the 1999 World Cup at England when Sachin Tendulkar got the news of his father’s demise. He made time to attend the funeral but was back before his next match where he scored an unbeaten 140. Such was his resolve to perform in the face of adversity. That moment when he looked to the heavens, dedicating his century to his late father left the entire gallery in tears.

  1. Encourage multi-skilling

It is always good to have people in the team who can do more than what has been assigned to them or is expected of them. Such people are called “all-rounders” in cricketing parlance.

Had it not been for Yuvraj Singh’s exceptional skills with both,batting and bowling during the 2011 World Cup, India’s grand World Cup victory could have been a farfetched dream. Similarly, Mohinder Amarnath’s wizardry with the bat and the ball contributed to the team’s victory in the 1983 World Cup in a big way.

Conclusion

Cricket, like every other sport, has a lot of valuable lessons to offer, which can help us lead the way in our own professional lives. Whether it is a game of cricket or a typical day at work, the ability to think on your toes while abiding by your core values can make all the difference.

Small Data: Your Guide to Achieving Big Success

Business How To’s

11 June 2019

Small Data: Your Guide to Achieving Big Success

  • Posted by Awfis Editorial

From being a buzzword to becoming synonymous with sound business decisions, big data has come a long way.

However, investing in big data can be a huge challenge for startups and small businesses, considering its strong appetite for resources. Add integration costs to it, and you have a foolproof formula for drilling a hole through your budgetary allocations. Then there are the additional challenges of complying with almost-draconian regulatory challenges.

All said, data quality remains the biggest challenge of big data. Despite the availability of analytical tools, sifting through vast chunks of data to extract relevant and accurate pieces of information remains a demanding task, hence big data’s appetite for resources.

Small data to the rescue

Enter small data. Small data refers to data that is understandable by humans. Unlike big data, small data comprises of data sets that are easily accessible, limited in volume, informative and, more importantly, can be interpreted without using complex analytical tools. It typically deals with information that addresses a specific query or issue, delivering promptly actionable insights that can aid critical decisions. Meeting schedules, individual health records, weekly reports, and weather forecasts are some examples of small data.

What’s in it for startups?

For startups, efficiency and productivity are the most valuable aspects;optimal utilization of resources is crucial.As such, spending time and resources on integrating high-end analytics can be farfetching for a small business when it all boils down to identifying prospective customer needs – not sentiments, not trends, but needs.

Small data helps you do just that; it enables you to identify the areas of opportunity without you having to invest time and other resources in complex data collection tasks.

Let’s take a look at how you can leverage small data to up your startup’s ante.

  1. It’s all around

Social channels are replete with small data that can readily be collected to inform marketing and buyer decisions. All you have to do is analyze the collected data to extract actionable pieces of information.

For instance, if you’re planning to start a marketing campaign for a product launch, you can simply collect data metrics from your social media campaign regarding how users interact with products. Then you just analyze it to gain meaningful insights to target your campaign to the right audience, with the right messaging.

  1. It’s quick and cost-effective

You don’t need a team of highly skilled data analystsor complex business intelligence systems to handle small data. Data mining can be done with spreadsheets, saving both, time and costs. Moreover, small data can be collected from open source data collection tools, such as ODK Collect.

  1. It’s all about the end user

Small data is all about the end user, helping you focus on their needs without going into the murkier details of customer behavior across channels,so you can concentrate on creating customized user experiences through targeted campaigns.

Lego’s remarkable turnaround

Lego is a brand that needs no introduction. However, over the years, Lego faced quite a blow, thanks to the emergence of immersive digital games. Expert big data studies seemed to suggest that the future generations would eventually lose interest in Lego, owing to their lack of time and patience. This led the brand to move away from its core product, shifting their focus to theme parks, apparels, video games, TV programs, and books.

Nevertheless, Lego’s remarkable turnaround was made possible by small data when in early 2004, the brand’s marketing team paid a visit to the home of an 11-year old Lego fan in Germany. The boy, a passionate skateboarder, proudly held a pair of worn-out sneakers as his trophy.

It took no time for the team to realize that children are motivated to be popular among their peers by attaining mastery over their chosen skill, be it video games or skateboarding. It was this chance observation, and not the expensive big data studies, that fueled Lego’s turnaround. They refocused on their core product, this time making it more detailed and complex, to deliver a challenging yet immersive experience for its users.

As a result, Lego’s sales rose by 11 percent in 2014 to exceed $2 billion and trump Mattel as the world’s largest toy maker!

Conclusion

Big data, despite all its uses and benefits, misses the most important aspect of data harnessing: the opportunity lies in the details. And details are seldom overlooked with small data at your behest. Small data is all about your target audience, giving you actionable insights that you can take advantage of to accomplish incredible results. Add to it the immense cost and resource benefits you can enjoy, leveraging small data effectively can open a lot of avenues for your business to grow and prosper.