Coachella in the Bahamas: The Fyre Festival as a Warning in the New Age of Investing, Part 3

By: Esmat Hanano, IAC 2019 Spring Intern

Welcome back to the next installment in our series on the Fyre Festival. Today, we focus on the Fyre Festival’s marketing and sales tactics to potential investors and attendees. Billy McFarland hired Jerry Media and Instagram “influencers” to help implement his marketing campaign. The influencers were dubbed “Fyre Starters” and used to “ignite” a “coordinated influencers marketing campaign.” The Festival hired 400 of these Fyre Starters and envisioned working with them in the future as brand partners. Further, McFarland filmed a promotional video with eight of these Fyre Starters to announce the Festival to potential investors and attendees. These marketing tactics were directed at millennials and Gen Z social media users. The organizers promised attendees would experience morning yoga on the beach, meditation, massages, henna tattooing, Bahamian-style sushi, luxury villas, and an extensive line-up of musical artists. In addition to all these experiences, McFarland stated that the Festival would take place on a private island in the Bahamas once owned by Pablo Escobar.

These promises, coupled with the influencer marketing campaign, generated significant hype around the event. The opening salvo in the campaign occurred on December 12, 2016, when the Fyre Starters posted an “ambiguous orange tile” on their Instagram accounts. This initial post reached “300 million people in 24-hours.” Within forty-eight hours of these posts, there were “1.5 million media impressions.” The Festival’s statistics are difficult to ignore—critics have pointed to the success of the marketing campaign as indicative of what it takes to implement a successful campaign in our social media-driven age. Indeed, the buzz around the Festival lead to significant media attention that only heightened everyone’s expectations about the event.

To appeal to investors, McFarland solicited them through a glossy private placement memorandum. He used the hype from the marketing campaign to show investors that there was significant interest in the Festival. McFarland even predicted that they would sell out of all tickets by March 31, 2017. He claimed he needed at least $25 million to expand the festival globally and hire an additional “500 exclusive managers.”  His interactions with one particular investor, Carola Jain, are indicative of how he approached the capital raising aspect of the Festival. Jain is a savvy businesswoman who has previously invested in successful start-ups. Unfortunately, her luck would run out with Fyre Festival. Jain was misled about different aspects of the Festival. She’s not the only one – McFarland relied on his charm and charisma to continue raising funds from a number of investors to the sum of $24 million.