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Fyre Festival and the Daily Frauds of Entrepreneurship

Watching Hulu’s Fyre Festival documentary over the weekend, I was struck by the way that so many of the people featured, and implicitly the film’s directors themselves, seemed to misunderstand what the story of Fyre is all about. The documentary is called Fyre Fraud, and many of the talking heads describe founder Billy MacFarland as a con man and a scammer. But I don’t think Fyre was a fraud, exactly, and I don’t think MacFarland is a fraudster. He’s more like a caricature of a startup founder, with all the typical founder traits cranked up to eleven and exaggerated into grotesquery. The line separating Billy MacFarland from legitimate entrepreneurs is a lot fuzzier than the documentary would have you believe. Or, as another founder I know said, “there’s a Fyre Festival in all of us.”

Getting any startup off the ground requires confidently stating, over and over, that you’ll accomplish something that you’re not even remotely sure you can actually do. It requires taking money from investors, customers, and partners to fund promises you don’t know if you can keep. And it requires intentionally cultivating a near-delusional belief that you’ll defy the odds and succeed, even when everyone and everything around you — not to mention the actual statistics — are telling you that you won’t. Startup life warps all of us who participate in it into mini-Billys, pitching our dreams as if they’re destiny and ending up the most credulous consumers of our own hype. And I don’t even think that’s a bad thing, necessarily: the stresses of being a founder are so all-consuming, the chances of actually making it so slim, that anyone who committed themselves to a fully realistic worldview would probably end up too discouraged to keep going.

Of course, if your success is inevitable, then no risk is too great on your path to get there. In my seven years in Startup World, I have heard one story after another of founders being celebrated for cutting the same kinds of corners and taking the same kinds of chances as the Fyre team did: promising a big customer a feature that doesn’t exist and then racing to build it, making payroll by the skin of their teeth when a big deal closes just seconds before the bill is due, even outright paying people to sign up for a product. One of the most famous stories in technology history — Bill Gates and Paul Allen selling DOS to IBM — is literally the story of a company selling a product that it didn’t actually own and wasn’t sure it could create. (They negotiated a deal to buy DOS from another company shortly after.) The only difference between Fyre Festival and Microsoft is that the Fyre guys couldn’t pull it off.

Okay, so not the only difference: MacFarland and his cofounders (Ja Rule included) come across as entitled scumbags, and Fyre clearly did tip into something approaching a Ponzi scheme at the end, when it became obvious that the founders wouldn’t be able to deliver anything close to the experience they’d promised. In their callous disregard for the wellbeing of their customers and partners, MacFarland and his crew failed the most important test any founder can face: how you handle yourself when things aren’t going well. By the time their so-called “festival” came to an end, they had lied, cheated, and committed many actual crimes.

But I don’t see MacFarland as an outright con man. A true con man wouldn’t have expended so much time and energy on attempting to actually set up the festival — he would have taken the money and run. MacFarland is nothing more than a founder who bought into his own hype, cut one corner too many, and slipped into criminality once the walls start closing in. If he had managed to pull the festival together at the eleventh hour, we’d be celebrating him as a scrappy entrepreneur who stopped at nothing to bring his vision to life. After all, if you succeed, it isn’t fraud.

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Max Nussenbaum

spelunker, herpetologist, ultracrepidarian, onanist, has a hook-hand. More: http://maxnuss.com.