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Fyre Fest's Miserable Failure Leaves Us With An Important Lesson

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Fyre Fest's Miserable Failure Leaves Us With An Important Lesson

This article was originally published by DriveWealth.

Previously called “a step above Coachella” by Vogue Magazine (among many other big-name sources), the Fyre Festival was supposed to be the ultra-glamorous, “next big thing” for the music industry. The rich and famous promoted it across social media by posting beautiful pictures showing the Exumas, a section of islands in the Bahamas where the Festival would take place, with captions like “hit the Bahamas with me.” The #fyrefestival became so popular on Instagram that festival coordinators barely had to worry about marketing the event outside of social media platforms. In fact, the Facebook page for the event, created by American musician Ja Rule and entrepreneur Billy McFarland, can still be found here

So, what happened next? Well, hundreds of music fans from all over the world bought $12,000 tickets (on average) for a weekend getaway to the Bahamas, where this festival was said to feature “an unparalleled weekend of mystery and music – only for those with a burning desire for adventure.” Twelve thousand dollars. For one weekend. The named acts for the weekend included Major Lazer, Blink-182, and Migos – among others. In addition, guests were promised state of the art cabanas, spa facilities, yachts, beautiful beaches, and gourmet food. Seems to fit the aforementioned price tag, doesn’t it?

But, if you haven’t heard the rest of the story yet, it appears as though the weekend’s guests vastly underestimated the “burning desires for adventure” that were necessary for their getaway. In fact, only 1500 of the scheduled 6000 guests even made their “complementary” flights – covered, of course, by themselves within their $12,000 admission fees – from Miami to the Bahamas before the rest of the flights to the islands were cancelled. The attendees who did make it to the islands compared their sleeping arrangements to refugee camps and noted the abundance of “sand flies” that made them feel diseased. The camp grounds had no lights and their gourmet food turned out to be some bagels and sliced cheese. Of course, all of the musical performers cancelled upon hearing the news of these atrocious conditions.

But, the problems only began there – several guests fainted in the airport from lack of water on the island and flights couldn’t return to the Exumas fast enough to rescue all of the festival-goers who had arrived there. So, many guests were trapped in half-built tents overnight. Not exactly the” glamping” they were expecting. Finally, since the news of Fyre’s major mistake, Ja Rule and McFarland have been forced to issue a public apology which can be found here, and they have also been sued for upwards of $100 million to date.

While we may all laugh about this horrendous slip-up in the weeks to come, we as investors can learn two very serious lessons from those who suffered this weekend as a result of Fyre Festival. The first lesson is this: you should not buy a product just because someone famous promotes it, even with multiple sources. If something seems too good to be true – in the consumer world or in the investing world – it probably is. Marketing is a legitimate science and marketers know just how to appeal to your interests.

 This brings us to the second lesson that we can gather from all of this: do your homework as investors before putting your money anywhere. Investors just like you and I put money into the Fyre Festival project to get it up and running, without concrete evidence that the organizers could make it successful. Along the same lines, thousands of customers trusted the Fyre website without any evidence that this festival was legitimate or that the ads they saw were truthful. A little extra research and a few phone calls may have proven to be very useful instead of trusting social media “influencers” such as Ja Rule and Kendall Jenner.

Ultimately, the most important point of them all is to be careful and dig deep: in the investing world (as in real life) things may not always be as “glamorous” as they appear in the media.

Posted-In: DriveWealthTopics Economics Media General

 

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