Fyre fest failure sends business up in smoke
It is a great wonder that the organizers got as far as they did
There have been a number of fun autopsies of the disastrous Fyre Festival, the Great Exuma-based music and art extravaganza that was to feature Major Lazer, white sand, popsicle-coloured bikinis and, no doubt, those friendly swimming pigs for which the Bahamian islands are renowned. Instead the music festival for the ages turned into, as Vanity Fair describes it, “Lord of the Flies dystopia meets social media hysteria, circa 2017,” though there have been no reports of deadly outcomes and smartphones served as social media replacements for the conch.
We know that attendees paid into the thousands for last weekend’s tickets, and that the entertainment was booked for the upcoming weekend too. Instead, the Fyre founders discovered that it’s really hard to build a city from nothing. You need water. Waste management. Food. Efficient transportation. And if you can’t deliver those, well, you’ve got not only a social media disaster on your hands, but a business disaster too, and, of course, a lawsuit, pegged at $100 million (U.S.).
Here’s a fact that stands out: in planning for the festival, organizers realized that having an ambu- lance on hand might be a good idea. One. So they drove one, all the way from New York to Florida and then transported it by boat from Miami. Where were the accountants? And, isn’t there a film script in here somewhere? If only John Candy were alive.
Vanity Fair has provided some excellent behindthe-scenes insights into, let’s be generous, the mindset of the organizers. Writing for Hive, the magazine’s mobile-first platform, Nick Bilton has posted a copy of the event’s private placement memorandum, which, in its confidentiality language, sounds as though it is attempting to address Wall Street.
“Neither the delivery of this Private Placement Memorandum nor any sale made hereunder shall, under any circumstances, create an implication that there as has (sic) been no change in the affairs of our company since the date hereof.” What? The company is Fyre Media Inc., cofounded by rapper Ja Rule and Billy McFarland, who is commonly identified as a techpreneur or serial entrepreneur. Ja Rule wears the creative hat.
McFarland, whose LinkedIn profile lists the Pingry School, a New Jersey high school, as his alma mater, appears to be the business brains. One interview reported that he attended, but did not complete, a program in computer engineering at Bucknell University.
He launched Spling Inc., a social media website, under the wing of a Philadelphia ventures start-up program. And then a company called Magnises, “an experiential and benefits platform” that promises to deliver to targeted dues-paying young elites easier access to hardto-get tickets — the Broadway show Hamilton, by example. Magnises Air was later launched to provide private jet travel for this same millennial club.
Customer grousing over problems with Magnises’s delivery quickly mounted, which McFarland put down to growing too quickly. That defence has a familiar ring. Last weekend, a letter posted by Fyre to its corporate website explained away the music festival debacle by stating the founders “simply weren’t ready for what happened next, or how big this thing would get.”
The relationship between McFarland and Ja Rule, by the way, “start- ed a partnership over a mutual interest in technology, the ocean and rap music.”
But back to the private placement memorandum, which sought to raise the peanut sum of $25 million. As it is was explained to potential investors, the Great Exuma blowout, including a weekend-long treasure hunt, was to be just the first event in a five-year journey of unparalleled experiences linked to the five elements.
So, year one: water. “Through the purchase of significant land, we will utilize the each (sic) festival as a major cultural event to bring awareness, visitors and livelihood to the land.”
The mission would be spread throughout the universe by Fyre people called “Fyre Starters” — Kendall Jenner and her millions of followers; actress Bella Thorne, actor Nick Bateman and 60 more. The Fyre people would ignite the “Fyre Tribe” (surely that should be Fyre Trybe) through Instagram etc., in exchange for perks. Brand support was promised, though only three outfits, including Magnises, were listed as confirmed in the memorandum.
Nick Bilton asks some smart questions about the legality, or at least appropriateness, of such ambassa- dors or “influencers” not disclosing their ties. In mid-April, the U.S. Federal Trade Commission reported that it had sent out more than 90 letters reminding influencers (a.k.a. celebrities) and marketers to “clearly and conspicuously” disclose their relationships to brands when pro- moting or endorsing products through social media. The FTC informed these role models (that’s the way the Fyre people define them) that when making endorsements on Instagram, they should disclose any “material connection” above the “more” button.
That still leaves hanging the validity of the business enterprise. The use of proceeds in the memorandum is one line long: “to acquire 500 exclusive managers and expand Fyre globally.”
The great wonder is that the Fyre people got as far as they did. They swear that lessons have been learned from “the worst day we’ve ever had as a company.” They say the Fyre Tribe is rooting for them and that the company will add “more seasoned event experts” to next year’s festival. The 2018 Fyre Festival will take place in the U.S. At a beach. Presumably sourcing an ambulance will be less of a challenge. jenwells@thestar.ca