I finally got around to watching the Fyre Festival documentaries, two distinct movies (Netflix and Hulu) each chronicling the rise and spectacular fall of what might have been the largest, most exclusive party in history, held by Ja Rule and a frat bro named Billy McFarland, who is now serving 6 years in prison.
First off, if you haven’t seen them, you should. It’s like watching a train wreck in slow motion, in which the people driving the train are smiling and telling passengers they’re safe and are going to go right through an invisible tunnel while at the same moment the train accordions against the mountain car by car. It’s glorious and horrifying.
Second off, after giving some thought to the horrifying manipulation of people, the careless disregard for people’s safety, the blatant misrepresentation of the truth, the wholesale financial fraud and the general nastiness of the whole situation, I’m left with one distinct conclusion:
I see how you got there, Billy McFarland.
In fact, I would go so far as to say that Billy McFarland (and Steve Jobs wannabe Elizabeth Holmes, for that matter — I see how she got there too) is the logical conclusion of some unique characteristics of what we know as “startup culture,” and that if it hadn’t have been Billy and it hadn’t have been Fyre Fest, it would have been someone else. Perhaps you or me.
The best practices of building a startup nowadays are based loosely around the Lean Startup methodology, which I’ve written about before, and specifically the absolute critical importance of validating customer demand before building anything. In the same way that previous cycles threw money at good ideas with great powerpoints (see dot com bubble), today’s entrepreneurs have been instructed to take the old adage, “fake it till you make it,” as gospel and user manual. Because the largest risk to any new enterprise is whether consumers actually want to pay for what you want to build, techniques to test consumer behavior have become dogma.
It’s a general truism that “you can build anything, it’s just a matter of time and money.” So it follows that the only thing that’s really risky is figuring out whether people want the thing you’re planning to build. Figure that out, and you can figure out how to actually build the thing after. Building the thing is “details,” and you should never “let the perfect be the enemy of the done,” are things I’ve actually said before in my career.
The essence of all this is to figure out if people want it, and then after that figure out all the other details. This is key. I’ll come back to this later.
The best example of this I can think of off hand is Dropbox, the file sharing program you probably already use. Before launching their first product, they went out to test the assumption that people would pay for file sharing service that worked like magic, and to do so they created a video, walking through how the product would work (or something close to it), and then asking people to sign up, in advance of the product actually being built. Now, the guys at Dropbox were up front about the fact that the product wasn’t yet available and in fact people were signing up for nothing, yet. So fair play to them, no issue there. And they learned a ton, and are now the posterchild of how an effective MVP (minimum viable product) can be something very different than an actual product.
So what did the startup world learn from that? Well, that we needed to get customer commitments up front, before building the product, to validate customer demand. Marketing is good, but definitely, for Heaven’s sake don’t actually build the product until you know whether people want it, because building it is where all the cost is.
From this, and following Dropbox’s example, an entirely new startup category blossomed, with landing page builders like LaunchRock, Unbounce, Leadpages, and the like. With these, it became easy to stage digital experiments to validate customer demand:
- Launch landing page which shows off your tool or technology as if you have already built it and it’s available for sale
- Put a “buy now” button on the bottom of the page with a price, just as if your imaginary product were real and available
- When clicked, this goes to a dead link, or a page that says “coming soon” and asks people to enter their email address to be notified when it’s ready
- Send paid traffic to your landing page
- Track conversion % (the number of visitors / the number of people who clicked the button thinking they were buying your imaginary product)
- If the number is high enough, then go build that thing, knowing that people want it
- If the number is too low, scrap the idea and maybe tell the people who signed up that it’s not coming (but probably not)
It only took me like 30 seconds to type that whole process above because I’ve done it so many times. It’s one of the most effective tools I’ve run across to validate customer demand, and has proved invaluable in ensuring I spent time and money building things that were likely to succeed (and more importantly, didn’t spend time/money building things people didn’t want). Much better than surveys, experiments like the one above allowed me to closely mimic the actual buying process, so that I would get data on consumer buying behaviors in an environment as close as possible to the real thing. Once buyers clicked a button where they thought they were actually buying a thing, then build it.
For that matter, probably the best example of all this is Kickstarter, where you don’t need a product at all, just a compelling story to get people to preorder your product before you make it. And where 9% of all products flame out without ever delivering on what they promise. This is all acceptable and reinforced by our startup culture.
But it’s also not that different from what Billy McFarland did. Billy basically ran a lean startup experiment at massive scale, figuring he’d figure out how to deliver the party once he was sure people wanted it.
Then when he learned that people were into what he was selling with those orange Instagram tiles he made the mistake of going waaaaay overboard on marketing the shit out of it before he bothered to figure out how to deliver the actual party. Of course it would have been better if, once he had learned that people wanted to party on a deserted island with models in bikinis and Blink 182 (imagine), he had taken a beat and simply asked himself “ok, Billy boy, are we sure we can pull this off? How are we going to do this?” But I’m sure he believed in his own hype and ability to pull off the impossible (sound like anyone we know and admire?), so instead he doubled down on scale and scope. Then, when he had built it into the biggest party in history, he finally looked around and figured hey, we can make this happen, right? In the Netflix documentary you can see him trying to create his own reality distortion fields at that point, channeling his inner Steve Jobs.
This whole thing was a mistake, sure. But more on the lines of a tactical error than a moral travesty. And an error I could have absolutely seen myself making with my own customer development experiments. And if his reality distortion field had worked, if he would have pulled off the party, he’d be just another in a long line of Silicon Valley all stars, proving the primacy of the American spirit over all odds. But it didn’t, and he found himself deep in the shit.
Granted, once there he made some stupid and indefensible decisions on how to dig himself out, which is where the real fraud came in (not to mention some seriously uncomfortable situations for his coworkers). I can’t explain or defend his decision to do such brilliant things as cook the books, or try to sell discounted tickets to other shows that he didn’t have, while on bail during the trial for selling tickets to Fyre festival. What he did once he was down at the bottom of the hole I have a hard time relating with (but it’s worth remembering he was 26 years old, an age eight years younger than I was when I figured out how to work a wash sink), but I can certainly empathize with all the steps down the stairs.
Billy McFarland simply went for it at a massive scale, in a way that had it worked people would have been singing his praises (for the outcome AS WELL AS THE PROCESS), and failed to deliver. This whole thing is different from 9% of Kickstarter campaigns only in scale and publicity, and because some dumb kid didn’t know when to quit.
Leave it to America to crucify the logical outcomes of the cultures we create, especially when they don’t win.