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.