Fyre Festival Founder Shares His Next Business Venture With Us | Billy McFarland Interview (#399)

Fyre Fest, Prison, PYRT, and Redemption - December 22, 2022 (over 2 years ago) • 01:13:08

This My First Million podcast episode features Sam Parr and Shaan Puri interviewing Billy McFarland, the creator of the infamous Fyre Festival. McFarland discusses his background in programming, his early entrepreneurial ventures, the rise and fall of Fyre Festival, his time in prison, and his new venture, PYRT. He expresses remorse for his past actions while also displaying his characteristic ambition and hustle.

Early Entrepreneurial Ventures: McFarland recounts his early successes creating and selling websites as a teenager, including a fan site for the TV show 24. He then started Spling, a social networking site, and Magnesis, a luxury black card business that offered exclusive perks and experiences.
Fyre Festival's Downfall: McFarland admits that his inability to acknowledge his shortcomings and ask for help ultimately led to the festival's failure. He was too focused on maintaining a facade of success and was unwilling to admit he was in over his head.
Life in Prison and Solitary Confinement: McFarland discusses the psychological impact of solitary confinement, describing it as counterproductive to rehabilitation. He explains he was placed in solitary for attempting to record a podcast from prison.
PYRT - A New Venture: McFarland details his new venture, PYRT, which aims to create immersive, virtual reality-like experiences centered around exclusive island adventures. He plans to livestream these experiences and allow viewers to interact with the events unfolding in real-time.
Alternative Business Ideas: McFarland shares other business ideas he considered, including becoming a GPT-3 expert and creating a decentralized influencer marketing platform. Sam and Shaan express skepticism about PYRT and encourage him to pursue less risky ventures.
Reflections and Future Goals: McFarland expresses a desire to move beyond Fyre Festival and build something new and successful. He acknowledges the need for structure and support in his future endeavors.

Transcript:

Start Time	Speaker	Text
00:00	Sam Parr	Most internet entrepreneurs, when they get into starting businesses, often engage in practices that are either black hat or gray hat. Then they realize, "I gotta do things legit because I don't want to go to jail." They discover that they can make more money by doing things ethically and not breaking the law. You can make so much more money being legit! How on earth did you not learn that lesson earlier? Alright, today's podcast is interesting. We just had Billy McFarland in. He's famous for the Fyre Festival incident, which was basically this huge Coachella-type event that went viral four years ago. He ended up committing a ton of crimes that he admitted to and was charged and convicted of fraud amounting to around $25 to $30 million. We just had him on the podcast. It was a very confusing episode, Sean. I think not confusing, but mixed emotions.
00:54	Shaan Puri	Yeah, I mean, he's an interesting guy. He's also complicated, like most people. I think it was pretty interesting. We talked about a bunch of things, including his origin story, how he got to the Fyre Festival, and almost like where it all went wrong. We discussed where he started making mistakes and eventually committing crimes. We talked about life in prison and what that was like in solitary confinement. We also discussed what he's doing now and how he's trying to come back. Sam and I were a little bit hard on his new idea. I would say, if this was just a normal person, a random person on the street, I would not have been as harsh. But for whatever reason, I felt like I had the license to be a little harsh on this one. We talked about that and other ideas about what he could do or other business opportunities he sees. He's a pretty fascinating guy.
01:51	Sam Parr	Very fascinating guy. The thing that sits bad with me, or makes me confused, is he's very likable. He's a very likable person—incredibly charming and very charismatic. I want him to win, but he did a lot of really bad shit.
02:09	Shaan Puri	And he seems a little... a little coached in the sense that he's right up front and will say, "What I did was terrible. I deserve no sympathy. You know, I was wrong and I was an idiot." Right? And he's very quick to kind of own that, which is great. You want somebody to own it. But it's also, I think, that's somebody who understands, "Okay, this is the message. I gotta stay on this message." And yeah, I gotta make it really clear where I stand on that.
02:36	Sam Parr	It's like when you have a star football player, a star athlete in high school, and you see them doing bad things off the field. You're like, "Dude, you have it all, man! You've got the talent. Please don't blow this." It hurts us all to see someone with so many gifts do such bad things. That's a little bit how I felt with this. And yeah, I say this in the end, but I'm eager to see how this story ends. I'm going to be following it, and I think it was a good podcast. Ben, our producer, thought it went great; he was messaging us during it. I think people will like it.
03:09	Billy McFarland	yep alright enjoy alright let's just get
03:11	Sam Parr	It sounds like you have staff. You just asked someone to get you a coffee. So, are you back? I mean, you're in the mix again. You're working.
03:21	Billy McFarland	Yeah, broke as hell and taking advantage of, you know, anybody I can get to help me try to rebuild and start making things right.
03:29	Shaan Puri	And you have like a crazy restitution thing, so we should explain kind of what the situation is. This is Billy. Billy created Fyre Festival, most notably. You may have seen the documentaries or whatever. He just got out of prison. One of the things that's associated with it is that he has to pay back more than $20,000,000 in restitution to some combination of investors, creditors, and people like that. How does that work? Do you have to give them like every dollar, or is it a certain percentage? How does that work? Because that's a deep, deep hole.
04:05	Billy McFarland	Yeah, and it's brutal. I'm like, I just can't think about that big number because then, you know, I'll sort of lose track of what's happening today and tomorrow. So how it works is that I have to pay a percentage of all of my personal income directly back to restitution.
04:19	Shaan Puri	like after taxes
04:21	Billy McFarland	They calculated on just gross income, so totally pretax income. So if I make like $1,000 this week, I have a set percentage I have to pay on that $1,000. But what is in addition to that?
04:32	Shaan Puri	what's the% is it like crazy or is it like 5%
04:34	Billy McFarland	It's more than $5. I'm not sure where it's going to end up; it varies based on income. So, I know what I have to pay right now, but I think it gets readjusted every couple of months. In addition to that, Pirates is giving 10% of all its revenue back to restitution as well. So, if the pirate gets a $100,000 sponsorship deal, it'll pay $10,000 right away. Then, whatever I get as my salary or income, I'll pay an additional percentage on top of that. So, I'm just trying to pay more than I have to.
05:02	Sam Parr	Why are you doing this right now? I mean, you're in a different situation. I firmly believe that. I listened to your podcast, the pods that you've done. I've watched the documentary and I've read a little bit. You made a massive mistake. So, yeah, I think that you deserved to be punished, and I don't feel sorry for you for having to do that. I think 5 years, or 4 years, however much you serve, that's a lot. My current stance is that everyone deserves a second chance. If you do the crime, you have to do the time. There should be a point where it's like, "Alright, you screwed up, you can try again." I feel that. But when I see you doing this podcast push right now, I'm like, "Should we be concerned? Is he taking advantage of us?" Why is this guy doing this right now? What is he trying to sell? Or is this therapeutic? Are you just trying to make a living? What's your motivation behind this recent push?
06:00	Billy McFarland	Yeah, so like, first of all, I totally deserved what I got. And sorry, I think there are days where I felt like I got too much time, and there are days where I felt like I didn't get enough, just based on everything else happening in the world. So, deserved it was coming, and I'm definitely not looking for sympathy. I think there are two things here. One is that by doing these podcasts, I'm getting great inbound deal flow. So if three or four companies are listening to this and they're like, "Oh wait, he actually does know how to market. He can get us attention," and they'll come and hire me, like, that's amazing. That's my entire purpose of doing this small media run right now. I think it's like looking at your Twitter comments a little bit this morning before I came on the show. A lot of people, and other hosts have gotten the same feedback, are like, "Why the hell would you give a con artist any time of day?" I loved your response, but I think the response to all those people is like...
06:49	Sam Parr	what did I say which which which for you
06:52	Billy McFarland	Maybe an interesting conversation that will get us money. I like your transparency.
06:59	Sam Parr	I said, "An interesting person or a cure, an interesting person that would have an interesting conversation, and it will get us a lot of views."
07:08	Billy McFarland	I think that's cool, and like I think other people haven't been able to say that, so I think that's great. But I think to them, is that anybody who has taken life to the extreme or too far has learned a lot of good and bad lessons from that. So, like, they can use me, right? If there's like one entrepreneur here who's trying to raise money and he or she thinks, "Shit, this is a little harder than I thought 60 days ago," and they're about to send out that monthly investor update, don't mess up your numbers. Don't go over the top to raise that cash. If I can stop one person, that would be really cool. But I mean, on the other end of the spectrum, if there's somebody who's going about it honestly and they're scared to kind of take that leap, if I can inspire them to go and try to make their brand pop off, that would be really cool as well. So, I think there are lessons to be learned, and people could kind of use all of my mistakes to help them wherever they are in their entrepreneurial journey.
07:56	Shaan Puri	You are kind of a hustler, so we'll go fast through it. But you basically, when you were in middle school, started creating projects. I don't even want to say "company" because, you know, I don't know how much of a company it is when you're in middle school. But you were building products and launching them as websites. That's right, is that right? Like in middle school?
08:18	Billy McFarland	Yeah, I basically started doing super basic HTML and CSS in like 5th or 6th grade. This was around 1999-2000, about 22 years ago, and it was pretty much the Wild West days of the internet. I started a couple of web hosting companies and basic social networks, and that was really my foray into the world of entrepreneurship and technology.
08:37	Shaan Puri	So, you make those sites. You end up selling them, or you sold at least one of them for like... what? Like a big win? A small win? What did you do when you were kind of like...?
08:49	Billy McFarland	you're probably sold in 17th grade
08:51	Shaan Puri	yeah
08:51	Billy McFarland	Yeah, these are a couple thousand dollars, so it's life-changing. You know, okay, just wanting to buy candy, but that's kind of irrelevant. I think that kind of got me into the game. I started a little bit of a bigger media site called 24 Scene in high school and sold that, 24 Scene, yes, I sold it to a company called Buddy TV out of Seattle when I was 16.
09:12	Shaan Puri	what what did that do what what was 24 scene
09:15	Billy McFarland	It was a content network, and I love the TV show 24. So, it was basically clipping, you know, snippets of the 24 show. This is before streaming, so it's hard to get.
09:24	Shaan Puri	hour 24
09:25	Billy McFarland	Yeah, exactly. So, it's hard to get actual media of the shows. This is all based on, like, you know, Fox aired it, and then there really was very little media afterwards. I was taking the show that aired and clipping it up. I ended up doing it for a half a dozen TV shows. I had this business partner at the time who was in his mid-thirties in Michigan, whom I never met. He orchestrated the sale and then paid me out on Western Union every two weeks for the remainder of my high school. So, that was pretty crazy.
09:53	Shaan Puri	how how much did you how much did you make during that
09:55	Billy McFarland	it was like tens of 1,000 of dollars like but at the time it was it was wild for me
10:00	Sam Parr	And from there, you went to school and yes, you graduated. But you never had a real job, did you?
10:08	Billy McFarland	I went to college and basically started living off of my $24,000 capital, which I kept in a little suitcase under my bed during my freshman year. For the first time, I started going out—going to nightclubs, going to dinners—exploring what every 18-year-old, I think, wants to see in the world. I blew all my cash in a couple of months, so I thought, "Shit, now I'm broke." I was sitting in my college in a small town and couldn't afford to find a car to take me to New York City anymore. I wondered, "What can I do?" I got back to what I knew, which was basic programming, and started a social networking website called Spling during my freshman year. That introduced me to this entire world of venture capital and angel investing. I essentially dropped out of school halfway through my freshman year to work on Spling, and then I started this whole run of venture capital-backed startups.
10:59	Sam Parr	My wife, through friends of friends, somehow had some run-ins with you at Penn. Like, a pair. She had good run-ins, or you know, she must have dated someone or were friends with someone. They would tell me stories about you. They were like, "Yeah, we knew him, and he would always rent these fat cars and drive us all, paying for everything to go to New York City from Philly." We just thought he had some business, and no one knew what it was. No, it wasn't anything inappropriate, but it was just like, he was this guy who must have had some money through some internet companies. He treated all of us on a regular basis.
11:44	Billy McFarland	Yeah, so I went to Philly for a company called DreamIt Ventures, which is kind of like this accelerator incubator program. I was dating a girl at the time who is, I think, a sophomore now at Penn. I should have been a sophomore in school, so all my peers and friends were in college. I'd be at DreamIt trying to raise money by day, and then at these terrible college parties by night. And obviously, [I was] trying to take them to New York.
12:06	Shaan Puri	So, what triggered this switch from being a kid programmer who likes to make hobbyist websites, like scenes from my favorite TV show "24," to trying to be the man? It seems like at some point, all your business ventures switched to things that were super cool, right? You did the black card credit card thing, and you did Fyre, which was like, you know, the next Coachella. At some point, you switched from kind of hobbyist websites to "How do I be the cool guy?" You know, the big man on campus type of thing. What triggered that switch for you?
12:43	Billy McFarland	Yeah, I think that's a good question. It was almost like I was living these alternative lives and not really fitting in with either one. I was a college kid trying to raise money from venture capitalists when, you know, at my little school, the majority of the students hadn't even heard the word "venture capital" in their lives. So, I'd go hang out with these venture capitalists who were titans of industry or successful angel investors, and then kind of go back to the college realm. I was always kind of interested in merging the two worlds. When I was hanging out with the VCs, the college kids all wanted access to this, and they would hire me to help with marketing or consulting. So, I was hustling and trying to make side income to fund a lifestyle, while also trying to keep up with this new world that my basic programming had been giving me access to.
13:25	Sam Parr	And then at what... So that was like your first kind of... It wasn't a real win, like you didn't exit, but you raised, I think, $4 or $6 million. Was that the... Is it called Magnesis?
13:38	Billy McFarland	Yes, so I turned 19, graduated from the Dream Adventures, and moved to the second-ever WeWork Labs down on Barrack Street in New York. I was there at WeWork, surrounded by guys who were around 30-ish, you know, hustling entrepreneurs all trying to make it. I was just a kid. I went out to dinner with a group of friends who were starting to meet in New York. They were a little bit older and more established. One of them pulled out this black American Express Centurion card and kind of slammed it on the table to show off. I thought, "Fuck, I have $40 in my Chase account. How can I do this?" So, I went back to my WeWork office, went online to Alibaba—before Alibaba was really a mainstream thing, particularly in New York and the U.S.—and bought these black metal cards. I also bought a credit card copier. They kind of came in the mail, and I took my Chase Blue debit card, copied it under this black card, and went to the pizza place across the street from WeWork. The guy was treating me like I was royalty. I went back into the office and sold these cards to all the entrepreneurs in the WeWork office. And then, Magnesis was born.
14:42	Sam Parr	and how big did that business get before it before it went south
14:47	Billy McFarland	So my music did total like $11-12 million in revenue over 3 years. My biggest mistake was getting distracted by Fyre [Festival]. And I understand this is forwarding like years in advance, but in the run-up to Fyre Festival, for the 4 or 5 months, I just started trying to get money from anywhere and everywhere. I basically milked the Magnesis customer base as much as I could, and then when Fyre crashed, Magnesis went down with it. Just not seeing it through was such a fuck up.
15:16	Sam Parr	But Magnesis was just... it was literally not a bank account. It was just the physical card as well as some perks. You would get discounts to certain concerts, I guess. That's where FIRE [Financial Independence, Retire Early] kind of got inspiration from.
15:29	Billy McFarland	yes
15:29	Sam Parr	The model you're describing seems to be a premium membership or concierge service. Here's how it appears to work: For $300, customers received: 1. A physical card (likely a status symbol) 2. Access to discounts for: - Certain clubs - Private jet services 3. Access to a townhouse (possibly for events or short-term stays) 4. Invitations to exclusive parties 5. Various other perks It sounds like the company either: - Negotiated deals directly with service providers - White-labeled another company's offerings that had already secured these deals The card itself didn't seem to be linked to a new bank account; instead, it was more of a membership card that granted access to these benefits while using the customer's existing bank account. Is that basically the model you're referring to?
15:55	Billy McFarland	Exactly. Then, what was really interesting was that the members were bringing all the perks and benefits. Initially, I sold these cards, and now let's say we sold a couple hundred cards. I'm like, "Wow, our member base is super interesting." Whether they're entrepreneurs or people in all these different industries, my friends don't really have access to them. So, I thought, let's get a space where they can all come and connect. I went and rented a series of lofts in a townhouse that I couldn't afford, where basically members can come and hang out anytime. As Magnesis grew, we built an app where members would come to us saying, "Hey, I work at this brand," whether it's a plane company, a fitness studio, or a fashion brand. They would say, "Let's do something special for the rest of the members." They would basically pay us to advertise and give access to cool experiences for the members. The members would pay us an annual fee to get access to these perks. It was kind of interesting; we were making money from both sides and then relying on the actual member base to create the offering.
16:47	Sam Parr	was it profitable
16:48	Billy McFarland	So, I was just so bad with financial management that we raised, you know, a few million dollars for Magnesis, but we never had more than two months of runway in the entire history of the company. I raised a round, and like 80% of that round was already spent in terms of bills owed to employees, contractors, agencies, whatever. So, it was like always a kiss of death. Like, okay, raise a million dollars, but fuck, I owe $800,000, and now we have two months of runway left. I think my biggest inability was to communicate that problem to investors. I just kept saying, "Things are great! You know, we'll raise a million dollars, and we're off to the races." I couldn't really explain how much we needed and why we needed it. That caused us to have to basically become profitable super early on. So, I just started monetizing the user base way more than I should have, which I think diminished the value of the brand. For like the last year and a half, two years of Magnesis, we weren't profitable, but we were paying all of our bills just based on revenue. We just tried to monetize too quickly and too fast to keep up with my crazy expenses.
17:47	Sam Parr	But even Magnises had issues. There are stories of, you know, members saying, "We thought we were buying tickets to [an event], but it turns out we didn't actually have them." Or maybe like Hamilton tickets, I think there's a story around that. You even had issues then. What were those issues?
18:09	Billy McFarland	So, when Fyre Festival came and I started going down this terrible rabbit hole, I needed money from everywhere and anywhere. That included overselling and trying to overpromise things to Magnesis members to get that capital. It just took everything down. I was wrong, and I was lying everywhere, thinking I could make these miracles happen. Sometimes we did, but more often than not, we crashed and burned in the end. It just totally lost track of all the good that was happening.
18:37	Shaan Puri	And I know you feel bad. You probably feel, you know, some shame and all these negative things. Do you ever just laugh at it, like, "Wow, what the hell? What did I do? Where did this go? How great, how far did this thing go?" It's like there's a reason there's documentaries about it. It's literally like a movie. Is there any part of you that just sort of looks at this and says, "I can't believe how far I let this thing go and how far it went?"
19:07	Billy McFarland	Totally. I was looking at and trying to think through the SPF scenario, you know, for the past couple of weeks. I think at the end of the day, like... he's obviously in a completely different stratosphere, but it's really hard in his position.
19:22	Shaan Puri	to say no to someone
19:22	Billy McFarland	With $10,000,000,000, right? I don't care how smart or how wealthy you are. So much of our decision-making process is based on social proof. When you meet someone with that kind of capital, it immediately checks off all these subconscious boxes that create this phenomenon of social proof. I think that, to a much larger scale, that's what happened to him. But it's also happened to me, where I had thousands of customers or thousands of members and all these talented artists who were promoting the brand. I was in a position where I was just way too young and way too immature. People who should have helped me were almost scared to say no, and I kind of relished and thrived off of that. This led me down this terrible, terrible rabbit hole. When they started saying no, I was too much in my own head, thinking, "Oh, you know, I’ll just pull this off and prove you wrong." I just didn't know how to press that red button to stop, and that was one of my biggest issues.
20:14	Sam Parr	I think the reason you're interesting is because we have a lot of people who listen to this podcast that are entrepreneurial. Most internet entrepreneurs, when they start businesses, often engage in either black hat or gray hat tactics. Then they realize, "Okay, this is sick! I know how to make money; I'm proficient at this skill set." But they come to understand that they need to do things legitimately because they can make way more money that way. I do the same thing. I've done criminal activities as well, and I think, "What the hell am I thinking? I should do things the right way." I don't want to go to jail, and I can make more money by doing things ethically and not breaking the law. You just make so much more money being legit. How on earth did you not learn that lesson earlier?
20:59	Billy McFarland	I think the craziest thing is I didn't really know what failure was until I failed on such a massive scale. I think part of what let me go so far is that I obviously had as many losses, if not more, than every other entrepreneur along the journey. But I was really good—or I guess really bad—at blocking out that noise. I was so focused on this end goal that nothing else mattered. I put my blinders on and just kept running forward. I kept getting jaded to failures until the failure became so big that I'm locked in solitary confinement.
21:32	Sam Parr	And what was the end goal? For me, it's like I want to make a certain amount of money so I can have a certain house. I don't want to worry anymore, so I can spend my monthly income however much I want. Then there's the ego thing; I mean, all of us have some ego aspect of wanting to prove to people that we're legit. What was your motivating factor in all this? I had a certain money goal in mind, and I imagine Sean's the same way. He's like, "Well, I want this lifestyle." What's your motivating factor? Do you say, "I want to have $100,000,000 in net worth by a certain age," or "I want girls to have sex with me," which is something we all obviously want? What's the motivating factor? I want to fit in.
22:09	Billy McFarland	I think I had two big insecurities and drives. One is those initial investors who, back when I was 18, I wanted to prove to them that they were right. That was seven years later, seven or eight years after that. So, I wanted to prove they were right, and I was too insecure to show any kinks in my armor to them. The second is that I want to be the guy who takes you to wild, crazy experiences. I'm like, "Wow, this whole programming thing is taking me into this world of entertainment." I'm hanging out with rappers, models, and comedians, and my friends don't believe me. I want to be that guy who can take you from your crappy college or from your lousy desk job to this private island where the who's who of the world is letting in their guards and having a blast. So, it was partly about proving myself to investors and partly about proving myself to friends that I'm the guy who made this life experience happen—something you just can't get anywhere else.
23:01	Shaan Puri	And we should explain the origin. So, you go from Magnesis... I don't know what's in between, but at some point, you create this app called the Fire app. The Fire app was meant to let you book an artist. You could be like, "Oh, I want Timbaland to perform at a party." I can send a booking request, and he can accept or reject it. There are no middlemen, or at least fewer middlemen involved. So, it sort of creates a marketplace for people to book these artists. That was the core idea. The Fyre Festival was a marketing stunt to promote the app, right? But at some point, the two kind of flipped in importance, and the Fyre Festival became the overarching thing. From what I understand, the Fyre Festival starts because you meet a guy who's like, "Yo, I have this little plane, and I fly to these random Caribbean islands." You used to go on your weekends in this small plane, hang out, and come back. You were like, "Wow, this is so dope!" People were like, "Wow, that sounds so dope!" And you were like, "Yeah, you should come do this too." Somehow, your experience of flying to these remote islands and having a good time became, "What if we fly 3,000 people down to this island and we do this Coachella-like festival?" Did I get that right so far?
24:20	Billy McFarland	I think you told the story better than me
24:22	Shaan Puri	okay perfect
24:22	Billy McFarland	so that exactly
24:24	Shaan Puri	But somewhere along the way, you get something wrong. I'm fast-forwarding this because I think it's documented in other places, but I do want to explain it for somebody who's listening. So somewhere along the way, you're like, "Alright, we're doing this. We're doing Fyre Festival." And you start promoting this thing. Your method of promoting was what? What was the marketing game plan to promote Fyre Festival?
24:45	Billy McFarland	So, like, it all kind of stems down to this: for all my terrible flaws, I was really good at taking a tangible asset that most people didn't have and using that to launch a business. Magnesis had this physical card that would cost me about $2 to make per card, and then there was a crazy townhouse. My entire target demographic didn't have access to a black card; they didn't have access to a multimillion-dollar townhouse in downtown Manhattan when they were 23 years old. So, I took these two inaccessible things, gave them to my customers, and used that to launch a business. Fast forward to Fyre, now I'm trying to cater to these B-list rappers and comedians who need small bookings. These people aren't Jay-Z; they aren't Drake. They don't have their own private island. So, here's where I come in: "Okay, now guys, we have our own private island. You want to be involved with me?" I use that to hopefully build the Fyre booking app. All of my marketing strategy came down to taking a tangible good or service that wasn't available to a certain audience, giving it to them, making them feel like it's theirs and they own it, and using that to build a business. So, that was the entire logic behind the Fyre app and Fyre Festival component. As you perfectly said, the importance quickly flipped as we launched the marketing for Fyre Festival, and Fyre Festival became it, while the Fyre app became, you know, a second thought for that.
26:03	Billy McFarland	Of time
26:04	Sam Parr	it's not like a bad plan it's not a bad idea I guess like like you said like
26:09	Shaan Puri	On the pod, I think when the documentaries came out, we were like, honestly, it was a dope idea. But, like, if it had just been done right... It's not like Theranos, where you're like, "That was a dope idea if somebody had just done it right." It's like, well, maybe it's technically impossible. Your thing was possible; you just had shitty logistics, operations, and poor planning. You just threw the idea of the event out there, and then the actual event did not live up to the hype. But your thing was totally possible. What went wrong there? Why were you not able to pull off what you had sold—the dream that you had sold? Were you ahead of Bella Hadid? Did you have Kendall Jenner and all these people promoting that, "Hey, we're going to this thing. It's gonna be, you know, whatever, the party of the century"? You sold the tickets, so you got that part right. It's just you didn't deliver the party.
27:04	Billy McFarland	You know what the craziest thing is? I think lying and being unable to show weaknesses made the festival fail. I truly believe that my backers at the time were well-connected and smart enough. If I had gone to them and said, "Hey, look guys, we did this great marketing campaign, but I have no idea what the heck I'm doing," they would have found the best people in the world to come and actually execute this. But I was so scared to show that I couldn't handle it that I kept saying everything is great, everything is perfect. That pushed away the people who would have helped me. So, like, literally lying, I think, doomed the festival from day one post-announcement.
27:41	Sam Parr	who are the big backers was it vcs or or or family offices or what
27:46	Billy McFarland	A handful of venture funds, then you know, 25 individuals, everywhere from larger family offices down to just smaller angels.
27:54	Sam Parr	who who is the biggest fund or most well known fund
27:57	Billy McFarland	I just don't wanna throw anybody under the bus so yeah
28:00	Sam Parr	oh okay
28:00	Billy McFarland	I thought
28:00	Sam Parr	I wasn't sure if it was public
28:03	Billy McFarland	I think that some of the investor list... a good portion of the investor list, I believe, was sealed in the court files. I didn't ask for it to be sealed; I think other people did. So I just don't want to... yeah, sure.
28:14	Sam Parr	don't
28:14	Billy McFarland	wanna do that
28:18	Hubspot	Our software is the worst. Have you heard of HubSpot? See, most CRMs are a cobbled together mess, but HubSpot is easy to adopt and actually looks gorgeous. I think I love our new CRM. Our software is the best. HubSpot: Grow Better.
28:33	Shaan Puri	And so, you're like, "Okay, I could have asked for help from organizing people." This is where I think things get a little tricky.
28:42	Billy McFarland	mhmm
28:42	Shaan Puri	you brought up spf
28:45	Billy McFarland	yeah
28:46	Shaan Puri	I've brought up Theranos, and we're talking about Fyre Festival. I think there's always a question of whether this was intentionally supposed to be a fraud. Like, "Oh, I'm just going to trick people and run away," and you know, like with FTX right now, that's a question. Did something happen that you weren't really paying attention to, and then things got out of hand? Or from the beginning, were you like, "I'm just going to trick people and take their money"? Where did it start? Was it well-intentioned at the beginning, and where did it turn? At what point did you realize, "Oh, I gotta just say this because I gotta get to the next dollar, I gotta get to the next milestone"?
29:27	Billy McFarland	So, I truly tried to execute the event. Literally, up until people were arriving at the festival, I thought it was going to work. Obviously, that's so stupid looking back.
29:36	Shaan Puri	yeah how how can
29:37	Billy McFarland	you say that
29:37	Shaan Puri	You knew you had like, fucking tents and grilled cheese sandwiches for people who ordered villas. Like, how could you still believe that right up to the event?
29:48	Sam Parr	are you sober the this entire time by the way
29:51	Billy McFarland	maybe the drugs but but always like drinking a lot
29:53	Sam Parr	but yeah I've been
29:54	Billy McFarland	Drinking way too much... I've smoked weed maybe six times in my life, but I think it's common, you know? People are saying I was on coke or whatever. I've never tried coke in my life, so think of a hard time.
30:04	Sam Parr	So, yeah, back to... you're in a sober-ish mindset. And, yeah, you actually think it's going to work the day of.
30:11	Billy McFarland	Or the day before, I'm like, "Here's my thought process." The island is so beautiful. We have this local team who you couldn't script these characters. They have the boats, they have the jet skis, and they're going to take people out. We know how to do these experiences. We have some crazy pilots, so it's just going to be like a wild weekend that you've never had before. We have 30 artists who are paid, so they're going to have A-list talent in one of the most beautiful places, in my opinion, in the Atlantic Ocean. We have an amazing group of these movie-scripted local characters who have toys for you to play on. So I thought that, like, okay, they'll go back and they'll have a... [shitty tick].
30:47	Shaan Puri	we don't we don't have food and shelter and bathrooms but we got nature
30:52	Sam Parr	we got john rule yeah
30:54	Billy McFarland	yeah yeah
30:54	Sam Parr	who needs food when you have tubing
30:57	Billy McFarland	but actually like I think the craziest thing is if we market it like that it would have been amazing
31:01	Shaan Puri	it would have been better
31:02	Billy McFarland	Hey guys, I can't figure out the logistics. I can't afford to build like 500 houses, but I somehow came up with the $5,000,000 for the artists. We have these great people and this great island. Bring a sleeping bag and figure this out. I think if that mindset shift was marketed, people would have been more excited. They would have felt like they were owning the adventure, and it would have been almost like...
31:23	Shaan Puri	yeah I agree with that
31:24	Billy McFarland	Man, the years were... and like the marketing, it killed me at the end. The marketing sold tickets, but it also made it fail.
31:30	Sam Parr	What would the ideal outcome have been? Let's say that it just so happened to work... How much revenue and profit would it have made? And what would the ideal situation have been?
31:42	Billy McFarland	so I have no idea like my entire are you fucking kidding me how do you not
31:46	Sam Parr	know this
31:47	Billy McFarland	So, we had a budget for $10,000,000 for the festival. I didn't have $10,000,000, but I thought, "Okay, I can reasonably raise $10,000,000 just off of this brand we're building right now for the festival." I ended up spending way more than that, and it got to the point where I would go to sleep with no money in the bank. I'd wake up knowing that I had to raise a certain dollar amount just to survive. Some days it was $50, and some days it was $4,000,000. So, I'd wake up at, you know, 9 AM and know that I had until 2 PM to get X dollars in the bank to then wire it out before the day ended. My life was fucking hell, and I just couldn't zoom out. I was stuck thinking, "Okay, say it's $2,000,000. I can call this guy, I can call that guy." At the end of the day, things kept getting bigger. The brand is going to be so big if this festival works. Everybody's going to get paid, and I just didn't know how to really run the numbers at that point.
32:40	Shaan Puri	So how much did you end up spending
32:42	Billy McFarland	We've raised $26 or $27 [million], but we were making money from other sources as well. Like, we were selling tickets on top of that, we were getting sponsors, Magnesis was making money, I was doing consulting jobs... It's literally like every day was a different angle for money.
33:00	Shaan Puri	so you spent maybe like 30,000,000,000 +
33:03	Billy McFarland	I would say in this 6 month. It was probably closer to 40 over 6,000
33:08	Shaan Puri	what and the tickets yeah so you sold 7,000 tickets is that right
33:12	Billy McFarland	I think it was probably just under 6,000. It was around 3,000 people per weekend. Some were given away for free and some were sold. So, we sold a little under 6,000.
33:20	Shaan Puri	Let's call it $5,000 revenue. $5,000 times what? What's the average ticket? What were you selling these for?
33:27	Billy McFarland	The average, the median ticket price is like $1,200 to $1,500. However, we sold a handful of outlier tickets for like a couple of $100,000+ per ticket.
33:38	Sam Parr	so so then it
33:39	Billy McFarland	was in
33:39	Sam Parr	5,000 times 2,000... you're at what's that? 10,000,000. You're at 10,000,000, yep, in sales. And then did you have another couple million from sponsors or anything like that?
33:49	Billy McFarland	Yeah, and the issue is that some of the ticket money was held in escrow. Some of it was for things like yachts and boats, so it wasn't pure $10,000,000 of free cash flow. It was like everything was held up, or not held up, in certain ways. I think my Stripe account got frozen with like $700 in it the day the festival got canceled. So, you know, money was held in a bunch of different sources and areas.
34:09	Shaan Puri	So, the event itself didn't make any sense, right? It was like, "We're gonna make $10,000,000, we're gonna spend $40." But the brand...
34:15	Billy McFarland	nate made the brand baby
34:16	Sam Parr	makes sense
34:17	Shaan Puri	the brand is gonna carry the way
34:19	Billy McFarland	you you but you could have gotten
34:21	Sam Parr	So much more profit just by running $10,000,000 or $40,000,000 of Facebook ads, you know what I mean? Like this is just... a better or a slightly different version of Cameo or something like that. These marketplaces are tried and true. Yeah, an event would have been cool if it were like a break-even or a slight loss, but that... yeah.
34:40	Billy McFarland	But put it this way: as wrong as things are, I can't do this tomorrow. However, if I did Fyre Festival again in three years, I think almost all the first group, as well as the rest of pop culture, would buy tickets just to be there to see how bad it is. Right? The brand value is there. It's just about how I can do it appropriately.
35:00	Shaan Puri	are you tempted
35:01	Billy McFarland	Pick the right time to go, see. I mean, I have to do it again. I just can't do it while I'm on probation. I can't do it this year and next year, but you know, it has to be done again. And I think no matter what success or failures I find along the way in tech... like, until I execute fire...
35:14	Sam Parr	well sean 5 have you seen his new company pirate go to the website
35:18	Shaan Puri	it's like it's p y website let's let's do it
35:20	Sam Parr	Dude, trust me, go to it. It's pyrt.com. Billy, this is the same stuff that you're doing a little bit. Like, it's all... like you said, you could program. When I see what you're doing, and you did the Met Gala thing where you got in trouble for scamming people out of that, I'm like, "Just do a fucking course, dude." Just create a course and make $2,000,000. Like, me and Sean make seven figures a year from this stuff. It's not stupid; it provides value. But I mean, it's insignificant compared to an event. Or like you said, you like the program and you like content sites. Just do something boring and straightforward. Why are you doing this pirate thing? It's the same stuff. There are so many things that could potentially go wrong. The stakes are so much higher than just creating some boring software.
36:08	Billy McFarland	I hear you I think pirate is actually
36:11	Sam Parr	Is that what you should do, people all the time? No, no, Billy. We have 3,000 people coming tomorrow. I hear you.
36:19	Billy McFarland	No, you might very well be right. I think the thing that we're getting back to with Pirate is that I'm not trying to host 1,000 people on an island. That's not going to work. I want to get back to those trips on the small planes with a dozen people or two dozen people. That did work well for a couple of years. If I have to be like a tour guide for a few years of my life and, like, eat shit, I'm going to go do that. I can give a couple of dozen people this amazing, adventurous experience. While I'm doing that, I'd like to find interesting ways to broadcast those experiences to all of their followers and then give their followers a way to get involved. So, I'm not trying to figure out the logistics to host thousands of people. I know I can host two dozen people. If I can take five years to build really interesting, virtual reality-esque tech that allows anybody to watch and actually influence what's happening, I think that's a really cool win and a way to kind of get back to what I'm good at.
37:14	Shaan Puri	this is a horrible idea
37:17	Sam Parr	Yeah, dude, it's a horrible idea. I actually don't think it's a horrible idea if it... like, I think you potentially are... you rank so high in capability and so high in ignorance. That's like a perfect combination, I think, for starting a business. It's like this confidence of, "I think I could pull this off," and I'm capable of some things. That's actually a beautiful combination. But you also have this third part of the pie chart where it's just like reputation and past... and owing money. I just don't understand why you're doing this. You are brilliant at a lot of things. It just seems like such a start... like just a boring-ass agency that makes $20 million a year and $10 million in profit.
37:58	Shaan Puri	If you just did an event, like a stunt marketing agency or something like that...
38:04	Billy McFarland	we have that we're announcing it today actually
38:05	Shaan Puri	oh okay
38:06	Billy McFarland	pirate collective and that's that's how we're fun that's what we're trying to fund I guess our tech is
38:10	Shaan Puri	So, let's walk through this. Okay, I'm on the pirate website, and it says there's a picture of a private island. We're already getting flashbacks of "Fire Cash." Then it says, "Join the crew. A pirate is somebody who turns the impossible into adventure." It also says, "Give me your phone number," and then it mentions joining the treasure hunt in virtual reality. From what I just gathered from what you described, you're going to take 6 to 15 people at a time on those little planes to the islands, like you used to do, where it's not such a heavy logistical lift.
38:45	Sam Parr	yeah
38:45	Shaan Puri	Those people are going to have a great time. They'll pay $5 or $10 or something—I'm just guessing here. They'll pay a lot of money to have this really cool, adventurous experience. Then, you're going to use video and maybe virtual reality to broadcast that experience to other people who can't afford to go, or maybe to their friends and their social media.
39:08	Billy McFarland	yeah
39:09	Shaan Puri	And they get to maybe buy a virtual ticket to kind of attend the party that way. And you're going to do that a bunch of times. Did I describe it right, or am I just guessing based on what you said?
39:19	Billy McFarland	Absolutely. So, the last thing that you're missing is that the people who are basically... so essentially, we're going to partner with this hotel. They'll handle all the hospitality and logistics. We'll host artists there on a regular basis. We'll rig the hotel with these 360 cameras to livestream everything that's happening. Then, we'll give the people who are watching the livestream the ability to buy in and affect what's happening on the island. For example, they can have one of the artists go to the recording studio and impact the creative process when they're making their song. Or, they can buy the talent a drink, you know, and make them take a tequila shot.
39:52	Shaan Puri	Dude, you should just go for being Mr. Beast. We hung out with Mr. Beast, and yeah, you're wired just like that nut. I feel like if you just channeled your energy towards how to do the craziest thing that's going to make the craziest video that 20 million people are going to watch, and then continually one-up yourself, I feel like that would work. That's my suggestion to you, you know what I mean?
40:13	Sam Parr	and and you absolutely have the you have the charisma and you have the storytelling ability
40:17	Shaan Puri	I'm like
40:18	Sam Parr	Just do... just do... just make you and like a small team doing the crazy stuff and do ad dollars. But it sounds like you're... you want to share your screen? You could share your screen. I heard you clicking around, I bet you.
40:30	Shaan Puri	I'll share it
40:32	Billy McFarland	I don't know if I'm supposed to share this but okay but I wanna get back to what you just said though
40:36	Sam Parr	I like that attitude I like that so
40:41	Billy McFarland	This was an island we were working with. Unfortunately, I'm not allowed to go to the Bahamas, so this is just for pure demo purposes. The idea is to take a one-to-one virtual representation of a property, track where all the talent is in real time, and track where all the toys are in real time. Then, people can click into various live streams. Once they're watching a live stream, hopefully of their favorite talent, they could actually choose actions to affect what's really happening there. It could be as crazy as me swimming in the reef and the users starting to chum in the water. Given the sharks in the area, I think a lot of people want to see that happen. Or it could be as simple as buying somebody a drink.
41:22	Sam Parr	What would the financials of this be like? I mean, I'm sure you've thought about that more. You're like, "What would the P&L be?" What does the P&L look like? Surely he has it. It looks like one day, one day it could do this. What's that one day?
41:36	Billy McFarland	So, a million people paying 20¢ to ask a talent to do something or to contribute an action towards the real world. If everybody pays 20¢ to chum the water and a million people are chumming the water, then that's kind of where the financials come in.
41:51	Sam Parr	That's sorry, I can't do that math. Just tell me, like, in five years, are you in your head thinking, "I think we could do like $100,000,000 in eight years"? Like, what's the...?
42:01	Billy McFarland	do not get me arrested sam I I don't wanna promise any revenue
42:04	Sam Parr	But no, no, sorry, don't promise. I'm just saying, like, when you're laying in bed, you're like, "I think this could become a $100,000,000 company by doing this."
42:10	Billy McFarland	I think the way I think about this - and my logic could be wrong - is that once again, we're not confusing the Bahamas, but for example: The Bahamas gets around 4-ish million tourists a year. If we're doing these really interesting broadcasts, we can have more than 44,000,000 people in a single day virtually "come to the island." So if we can just totally destroy their tourism numbers on a virtual scale, I think it's a big revenue opportunity.
42:34	Shaan Puri	Oh, so, okay. Where did you come up with this idea? Were you in prison, or was it once you got out that you were like, "Alright, I'm gonna start my brainstorm"?
42:41	Billy McFarland	No, I was in solitary confinement. It's like totally, totally confined. You know, a lot of it was just like reflection, and then a lot of it too was... I wanted to get outside of these walls and just get back to adventure. And then find a way to share this, so we...
42:56	Shaan Puri	should say by the way that's
42:57	Billy McFarland	kinda where people
42:57	Shaan Puri	You got into solitary because you attempted to do a podcast from inside prison.
43:03	Billy McFarland	yeah terrible
43:04	Shaan Puri	I mean, what the... well, first, did you know that was not allowed? I didn't even realize that would be such a faux pas. Like, that was... that would be such a... of course.
43:12	Sam Parr	that would be a faux pas
43:13	Billy McFarland	I think the biggest thing is
43:14	Shaan Puri	like that's great
43:16	Sam Parr	Dude, they read your mail and shit. You can't... and like each inmate has different rules for you, right?
43:22	Shaan Puri	like if a journalist calls you and you do an interview is that allowed
43:25	Billy McFarland	That's allowed. I was wrong. The toughest part, though, is that it was a gray area. I think if it was a clear violation of the rules, my punishment would have been less strict. I used the pay phone; they're available pay phones. But at the same time, you can't draw attention to the jail, right? And that's what I did. So, I understand why it was so incredibly stupid. But I think if I had a clear violation of the rules, I would have gone to solitary for like 45 days and not 7 months.
43:51	Shaan Puri	You basically had a podcast host call you on the pay phone. Then you did your side of the podcast from the pay phone in like exactly one-minute or fifteen-minute increments, right? Because that's what you were allowed.
44:01	Billy McFarland	exactly exactly
44:03	Shaan Puri	okay yeah
44:04	Sam Parr	Because, I mean, I understand why you think that's great. It's like, what's the difference between prostitution and pornography? You know, it's like, "Oh, I don't know if there's a camera there." It's like you're safe. You know what I mean? It's like you're playing this... I don't know if I would be risking things at that moment. I mean, when I was in college, I did stupid stuff and I got in trouble. I remember getting in trouble and thinking, "I don't ever want to come back to jail again." More so, solitary confinement seems like I would kill myself. I think I would want to commit suicide. That sounds like... that's like seven months in a box. It seems like the worst possible outcome, let alone, you know, getting life, like El Chapo and some of these guys, and these high-level security prisons. What was that like, seven months being in that cell? I get anxious just thinking about it.
44:53	Billy McFarland	I actually think that it's counterproductive in terms of reform, if that kind of makes sense. The other time in jail, I don't think it's going to have long-lasting negative impacts on my life. I did 10 months total in solitary—one time for 3 months and another time for 7 months. I think that actually makes it more likely that I might make a mistake in the future. Obviously, if I do make a mistake, it's totally on me. But the mental hangover that I have, where it's like somebody out there could snap their fingers and put me into a concrete box, that's scary. That's what gives me nightmares at night. I think that, if anything, that makes ideas bigger or different because you're kind of fearful of that outcome. So, I don't know. It's... it's really hard. There are guys who have done way more than 10 months, and I can't imagine what they feel like. But I think that's the worst part of the experience; it actually is just counterproductive.
45:47	Shaan Puri	Did you know it was going to be 7 months? Or do you know there's an end? Or you didn't know?
45:53	Billy McFarland	No, and I think if they had said, "Hey, this is 7 months, then you're getting out and going home the year after that," it would have been totally different. But the fact that they kept messing with me, basically saying, "Hey, you're never getting out of here, you're gonna get in more trouble"... that was the biggest mind fuck. You just wake up every morning and think, "This is never gonna end."
46:11	Sam Parr	why like you mean the the guards were were just assholes
46:16	Billy McFarland	Yeah, in the jail, they literally, in response to the podcast, tried to send me to a terrorist facility called the CMC in Marion, Illinois. You can look at their inmates on Wikipedia; I'd be one of two non-terrorists in that facility. They would come and mess with me, passing program statements under my door for this Communication Management Unit, like, "Here's where you're going, McFarland." I thought they were bluffing, and then a day later, they said, "Oh, we submitted you there." They legitimately tried to send me to a terrorist facility, and it's like, "You're never getting out." So what's going to happen?
46:47	Sam Parr	That is fucking crazy. I think that, like, whenever I was thinking of it, I remember talking to my wife at the time when you were getting in trouble. I'm like, unfortunately, I think 4 or 5 years is probably a fair punishment. I don't think solitary is a fair punishment. I don't think being tormented is fair, though, you know?
47:04	Shaan Puri	like just
47:04	Sam Parr	to say that
47:05	Shaan Puri	You went to jail not because you threw a bad festival. You went to jail for... what was the exact reason? The re...
47:12	Billy McFarland	flying to lying to investors and like and
47:14	Shaan Puri	you lied what about the financials or what did you lie about
47:16	Billy McFarland	yes badly financials revenue personal company
47:20	Sam Parr	what were you doing you're just literally making that charge with fraud
47:23	Shaan Puri	what were you doing
47:24	Billy McFarland	Wire fraud, I think, is the main charge. There are a couple of surrounding charges as well. But basically, anytime you lie to get money, it's essentially wire fraud in the eyes of the federal government.
47:33	Sam Parr	But you are making fake documents. Like, you are photoshopping things and making fake PDFs, I think, right?
47:40	Billy McFarland	Yeah, I made... I just made fake Excel documents, basically saying, "Hey, our income is $X,000,000 this month," and it wasn't close. So I was, you know, totally guilty. It wasn't like it was a gray area; I was black and white wrong.
47:53	Sam Parr	right
47:54	Billy McFarland	the festival was better than I advertised which is obviously impossible I still would have gone to
47:58	Shaan Puri	Jail... When you... So I remember being like, "Okay, wow, that's crazy." Sounds like, you know, he got kinda in over his head, you know? And I was having some sort of sympathy in a way. Then there was some story like when you were on probation, then you did something else. You created something called like "VIP Access" or some shit like that.
48:17	Sam Parr	met gala yeah
48:18	Shaan Puri	And then that was also like, you know, free a little pieces in some way. What was that, and how do you defend that part? Right? Because that's after the fact now.
48:27	Billy McFarland	yeah
48:28	Shaan Puri	And you're already on probation. Was it just that you had a habit of doing this? What was going on there?
48:36	Billy McFarland	The only defense is that I was a fucking idiot. Like, there's no other way to get around that. Yeah, I was totally wrong and I kind of got in this mindset where it's all about the money, and... that's probably wrong. Then I figured, "Hey, I need to find a way to pay everybody back." And let's get back to what I was doing at Magnesis at the end to kind of fund Fyre Festival, which is to sell these tickets.
48:58	Shaan Puri	right
48:58	Sam Parr	And you needed, like, if I was your father, I would've just punched you in the face and said, "Billy, you're hurting me. You're hurt." You needed someone to just be like, "Dude, you are so talented, but you are messing this up so much. These are such clear mistakes. I don't understand why." Did you not have a friend that was like...?
49:22	Shaan Puri	It sounds like you were trying to do a quick fix. If I can get the money back, if I could pay people back, then I'm not going to get in trouble about the other thing. Is that accurate? Is that what you were thinking?
49:31	Billy McFarland	I was scared of jail. No one was picking up my calls anymore. I'm on, you know, bond, I guess. I just couldn't, once again, zoom out and understand the bigger picture. If I sat down and shut the fuck up, sure, I'll be broke for a couple of years, but I'll go to jail for 2 or 3 years and then get out in my late twenties. I would have a chance to pay people back the right way. I just couldn't understand that. But yeah, I think that going forward, a big thought process for me—it's been 3 months—is, you know, how do I position myself? Whether it's a company or something else, how do I get the help I need? Do I operate within a bigger company? Do I find partners who are senior to me in experience and age, whom I can trust and defer to? So, it's just all part of my journey right now. I think that this time around, I prefer those boundaries more. It's just trying to find it, and it's been, you know, super early in the process.
50:23	Sam Parr	Are you gonna raise funding for this next company? I... I think a lot of people... I don't know, but if I had to bet, I would say you probably actually could raise. I bet there's people that would give you money. Is that...?
50:35	Billy McFarland	I texted about eight venture funds a few weeks ago. You know, it was literally like a broken grammar, two-line sentence. Two told me to "fuck off," one didn't respond, one asked for more questions, and four responded within minutes saying, "We're in." The issue is, as I've kind of gone through the process, I'm actually not allowed, due to an SEC deal, to raise securities. So, I can't go and raise money. I think the ironic part is that it would have probably been easier this time to raise venture money without any decks—none of that stuff. Like I said, I have no decks; here's all I have. And yeah, people want to back it, I just can't raise the funds.
51:16	Sam Parr	So, I think that would shock people. Yeah, you know, you just had a 50% hit rate on a text message, and then... but...
51:24	Shaan Puri	How do you explain that to somebody who's listening? They're like, you know, there are some people who are frustrated that that's the case. I can't believe people would fund them. How would you explain to them? Because it's people. People are making this decision. They're smart people, they're capable people, and they have other options.
51:38	Sam Parr	yeah
51:39	Shaan Puri	how would you explain why why somebody would be willing to do that
51:42	Billy McFarland	So, I started trying to raise money for the first time almost 12 years ago now. As with everybody, the first few people told me to "fuck off" and kind of laughed at me. I went through 12 years of challenges, including 10 months of solitary confinement, to get to the point where maybe an investor believes that I've learned enough lessons to focus on what I'm good at and get help with what I'm bad at. It's not like I just woke up one day and could raise money. It's been 12 years of totally messing up to get to this point. Before I raised money, and obviously, like legally I can't do it, I'm not going to be allowed to do it. I need help, right? I need the system and the structure in place that allows me to go and market, come up with these experiences and adventures, and drive attention. But I also need somebody else who can help me manage the financials, logistics, and operations.
52:29	Shaan Puri	What other ideas did you have if you weren't going to do something Fyre Festival-y? Did you have like other... I'm sure you had a lot of time on your hands to think of other ideas. Did you think about any other potential things you could do with your time? Maybe not even businesses, just other things you might do?
52:47	Billy McFarland	I think if someone wants to go and really understand GPT-3 - like what's kind of powering OpenAI - and just become an expert on that, I think you can make a killing as a consultant. You could be teaching all these big brands what's happening there and what's going to happen. So I think that's one option: to go and become a GPT-3 expert and be the coach for a lot of brands.
53:09	Sam Parr	is your experience with gpt 3 since sorry when you got out 6 months ago
53:14	Billy McFarland	Yeah, I actually was reading about it for like a year in jail. I didn't even know OpenAI was the name of the company or anything like that, but I had random books sent in. So I was like, "Oh, this is super interesting," and I have dozens of pages of notes on it. Maybe I'll post them... Then I came out and saw what happened recently, which is pretty cool.
53:30	Sam Parr	So, I agree. I think that could be a great company, and I bet you'd kill it because you're pretty good at selling. You, by the way... yes, I think if I was close with you, I'd be like, "Billy, do that!" Mhmm... What else? What else has excited you? What other ideas?
53:45	Billy McFarland	I think the concept of the Fyre app, which is providing transparency to a lot of these legacy entertainment systems, is an interesting one. What I find really intriguing right now is performance marketing for social media and influencers. To take a step back, the reason why the Fyre Festival marketing worked so well is that, at the exact same time, we had 400 people post this orange tile. These 400 people weren't related; it was some music artists, some comedians, some athletes, and some models. So, when you're in our target audience and you're scrolling through your Instagram feed, you're like, "Why the heck are these five people, who don't know each other, all posting this right now? I need to go check this out." One idea I had is to create a marketplace for influencer marketing. For example, let's say Starbucks has a new coffee that they want to advertise. They can go and upload all their creative assets and set a $1,000,000 budget. Then, anybody around the world could take those assets and post them to their Instagram, TikTok, or YouTube. They would basically get a score for how much engagement they get with their content, and their overall score would determine the percentage of the budget they receive. So, if Kim Kardashian posted and she crushes it, she would get $900, and the remaining $100,000 would be split among another 1,000,000 people who all kind of posted it. I think it's a fun way to remove all these unnecessary middlemen in the social marketing world and allow a brand to turn all of their followers into advertisers for that company without dealing with any of the legwork.
55:12	Sam Parr	almost like klout do you remember klout with a k
55:15	Billy McFarland	Yeah, I do. They measure your overall social score, right?
55:20	Sam Parr	Yeah, and they raised a ton of money and probably sold for less than their valuation of $100 million. Or I think they sold for $100 million, which was less, I think, than what they raised at. But I actually thought it was a fantastic idea. For some reason it didn't work... I don't know why. But you'd be in that space a little bit, it sounds like.
55:37	Billy McFarland	Yeah, I think it's interesting. It's like providing a score to how well your content performs and getting paid off of that. But then, you're turning everybody into your promoters.
55:45	Shaan Puri	Yeah, I think that's a really cool idea. It also flips the model on its head. Right now, you have to do sort of individual manual outreach, then negotiations, and then whatever. Versus just saying, "It's in the reverse. Here's a giant honeypot. If you want it, go get it." You know? And then basically divvying it up based on the actual performance versus, you know, who can negotiate the best at the game's moment. Okay, so that's a really cool idea. What else you got?
56:14	Billy McFarland	yeah yeah those are my 2 so those
56:16	Shaan Puri	are your 2
56:16	Billy McFarland	GPT-3 expert, and then providing like an open marketplace where brands can upload their creative assets. Anybody can kind of publish them and get paid based on...
56:24	Shaan Puri	and why not do that one
56:25	Sam Parr	yeah and why not why why just settle on the one versus those 2 I mean they sound quite reasonable
56:31	Billy McFarland	yeah yeah maybe I'll do them I'll just try it
56:33	Sam Parr	Yeah, no, you won't. I don't think you will. I think, like, I don't know... I don't think you will. I guess you just have this fire in you—no pun intended—where you're like, "I have to go this event route," which is baffling. I mean, I guess passionate people are passionate about certain things; I get it. Yeah, but logically, I just... I have such a desire to see you succeed. I don't want to see you fail. I want to see you succeed and prove people wrong. I want to prove that second chances could work. So when I see this, I'm like, "Oh man, you're just playing this game on hard mode." Like, you... but yeah.
57:10	Shaan Puri	I think you're not making the same mistakes. Obviously, I have no idea, but that'd be crazy if you're making the same mistakes that got you into prison. But you're also choosing a business model that's super hard. Like, you know, you're talking about a million people paying 20 cents to "chum the waters." It's like, I don't even know; those words have never even been said together, right? So, it's like, you know, you're choosing to try to pull off a really, really, really difficult thing.
57:39	Billy McFarland	yeah
57:39	Shaan Puri	And you know, it just seems like... I guess my philosophy is always that in business, there's no extra points for difficulty. In fact, you get docked points for difficulty. The harder something is, the less money you end up making. So, there are no bonus points for doing things the hard way. Now, on the other side, there is one advantage: when you go do something cool and audacious every day, you wake up motivated. Maybe you can recruit people who are motivated to pull off something epic because epic things have their own motivational draw to actually go and do your best work.
58:13	Sam Parr	Yeah, which you just did. I saw on your Twitter and I think TikTok. You said, "Hey everyone, I'm hiring for my new thing." How many?
58:19	Billy McFarland	yeah
58:20	Sam Parr	applicants did you get
58:21	Billy McFarland	Yeah, so back to a business idea. I think it's really interesting. We partnered with a company called Downy Hunter World to hire, and they're trying to disrupt the whole recruiter model. They're saying anyone can refer a friend to a job, and if you successfully refer someone, you get paid that recruiting fee. As you guys know, those fees can be crazy. I think their site is super awesome. Then we tried to one-up it. We're saying anyone who refers a friend to Pirate that we end up hiring, we take that person on one of these pirate experiences. We're trying to give the island entertainer experience to any of our fans. We've had a lot of people apply for jobs. I think the craziest thing is that we have no money, and I'm probably paying 15 to 20% of what I was paying for the same role 5 or 6 years ago, yet I'm probably getting better people. I think it all goes to show that your mission and your intention are just so much more important than anything else. How big is the list?
59:16	Shaan Puri	Of this, like, I put my phone number into this thing. How big is the list? How many people have signed up to do the treasure hunt?
59:22	Billy McFarland	around 2,000
59:23	Shaan Puri	okay
59:23	Sam Parr	So yeah, not bad. I'm shocked you didn't get more because the Nelk Boys thing got 1,500,000 views that I've been...
59:30	Billy McFarland	We've been getting a lot of inbound. It's like social... Instagram DMs, I think, have gone crazy. I think the conversion to a phone number through a platform has been a little bit harder for us. But yeah, overall it's like, "How do we kind of organize all these DMs?" Maybe that's a different business too. If someone can build an inbox that takes inbound across Instagram DMs, LinkedIn InMail, your public email address, and organize all of that and kind of qualify those leads... that's something that I would pay for on a monthly basis.
01:00:00	Sam Parr	And you're building all of this right now with, I think you said, you collected $150,000 in revenue so far from brand deals or something.
01:00:07	Billy McFarland	like that and so you're basically build 70 since
01:00:10	Sam Parr	Yeah, November 1st. So you're building this... Oh, since November 1st? Well, I mean that's a pretty good run rate already. So, you're building this business now. You have $170,000 just to play with. That's kind of what you're starting with.
01:00:22	Billy McFarland	Yeah, yeah, don't worry. We spent it already. So, did you really? I mean, like, we're just trying to survive. So, dude, have you ever heard of...?
01:00:31	Sam Parr	Pilot or Bench, dude! There are these really good accounting software companies that you could use. It's like $1000 a month and they'll just tell you your P&L [Profit and Loss]. Yeah, you should... or like a part-time CFO. I don't know, man, maybe that would...
01:00:44	Billy McFarland	be a good investment I need all I need all of it I need like I need help so if anybody's interested in helping you
01:00:49	Shaan Puri	an excel license
01:00:51	Billy McFarland	yeah yeah
01:00:52	Sam Parr	Have you ever heard of QuickBooks? I mean, like, I don't know, man. I think you should really sweat the details on this stuff.
01:00:57	Billy McFarland	f fdx used quickbooks and look what happened
01:01:00	Shaan Puri	so I'm just talking shit
01:01:01	Sam Parr	Well, correlation not causation, but I know... I mean, you... What speaking of that, what do you think? You know, I've been following... We had... Sean and I have both interacted a bit with Martin Shkreli, and unfortunately, you know, you're in the same vein. There's you, there's Martin, and then there's now... I think Sean doesn't like calling him SBF because winners don't get actors, winners don't get nicknames. He's just Samuel now. But what do you think? What's your take on what's gonna happen with him?
01:01:32	Billy McFarland	He'll serve 40 years, and then you think after that, he'll get out after like 15 to 20 years.
01:01:37	Sam Parr	do you think that's fair
01:01:38	Shaan Puri	that's my
01:01:38	Billy McFarland	that's my guess I don't know that's my guess
01:01:40	Shaan Puri	I talked to Martin after he got out, and I was like, "What was it like in prison?" He had a bunch of stories. He said, "Yeah, I created a cryptocurrency study club. I had all these... like, we had this system where I was selling information, blah blah blah. I was reading tons of books. I had access to the internet." He mentioned, "I would be under the covers at night, basically watching Khan Academy videos, learning about calculus." I asked him, "What do you do to pass the time? What was your life like?"
01:02:09	Billy McFarland	I think the hardest part about prison is that it's designed to strip you of your ambition. There are great people there, and I bet some really incredible individuals, but there are also a lot of bad people. You can't put bad people into an environment where they're inspired and have the ambition to act on their bad impulses. There's this concept of being institutionalized, and essentially, it's meant to make you a human robot. I think it's good in a certain way because it makes time easier, but naturally, I was just trying to fight against the set process as much as possible. I think it made my time go really, really slow, but I was trying to find ways to stay creative.
01:02:49	Shaan Puri	what's an
01:02:50	Billy McFarland	The environment is meant to make you robot-like. They feed you at the same time every day, they turn the lights off at the same time, you can only use your phones for a certain amount of time... Just everything is structured like this. You have to wear your uniform if you go to lunch. It's like you're trying to find ways where, you know, you're trying to find your creative periods and just not make every day the same. So you can keep different ideas flowing and come into it [with a fresh perspective].
01:03:11	Shaan Puri	What were some things you did successfully to kind of amuse yourself? What were your little tactics or little wins to keep that creative spark alive?
01:03:21	Billy McFarland	Yeah, I was training a lot of boxing. I had a cellmate who was a former Puerto Rican professional boxer. He would wrap his hands with towels and train me in boxing, which was super fun. We didn't have proper equipment, so guys would take toilet paper rolls, wrap them in tube socks, and use that for mitts. It was all about finding creative ways to exercise and free your mind. We did little things we weren't supposed to do, but it didn't hurt anybody. You couldn't practice martial arts officially, but you could go in the back and have the guy hold your mitts for you for half an hour. You could kind of get away with it. It was a good way to escape.
01:03:54	Shaan Puri	you look like you're in better shape
01:03:56	Billy McFarland	yeah I was bad as hell so hard hard not
01:03:59	Sam Parr	"What are some stereotypes that we would have about your experience that either proved to be true or... maybe weren't true about the whole experience?"
01:04:11	Billy McFarland	the whole like racial segregation totally true
01:04:15	Sam Parr	thing yeah
01:04:15	Billy McFarland	Yeah, totally. I think, like, being in New York, I'm a little naive and spoiled. I guess a lot of what probably exists in other parts of the world... but literally being in a place where if you're Black, you go on this line for lunch, and if you're White, you go on this line for lunch, and you just can't cross over. It's wild! It just feels like it's 60 years behind the times. So, obviously, that's something that I haven't experienced in New York, and I'm probably spoiled in that sense. But really, kind of getting over the racial issues is, I think, kind of the weird hard part for me.
01:04:53	Sam Parr	And it's probably... What's weird about it is, when they separate by races, it's not always out of a place of hate. It's just like, "No, this is just you stay with us, they go with them." And it's not necessarily that they hate the other group, it's just this is how we do things.
01:05:07	Billy McFarland	Yeah, it's always been done this way. This is how we're going to do it. There certainly are terrible racists on both sides, but the majority aren't. There's this mindset: "This is the way it's done, so this is the way we're going to do it." It doesn't really make sense.
01:05:17	Shaan Puri	But if you could go in and change one way that the prison system works, while still achieving the goal and the job to be done of a prison, what would you change now that you've kind of seen it from the inside?
01:05:34	Billy McFarland	I think that I would make sentencing more equal across the board. There are a lot of people who committed the exact same crime but received wildly different sentences. This is almost like an interesting problem. Maybe it's a really cool business idea to build some sort of AI sentencing system. Right now, it's up to one independent judge. In my case, I could have gotten nothing or I could have gotten 20 years. One person can literally decide the fate of your life. I think what I got is fair for me, but many other people's sentences weren't fair. So maybe it's some sort of system that takes in all the information around someone's crime and their personal life. It could study everybody else who has had similar crimes and see who was successful, actually sentencing based on this idea of future success.
01:06:20	Shaan Puri	well what
01:06:20	Sam Parr	Are there some examples of different punishments or different sentences based on different crimes or similar crimes?
01:06:27	Billy McFarland	So, I think for my situation, it's a financial crime. Typically, your sentence is based on the dollar amount that victims lost. So, the more you lose, the more time you should get. I think there are plenty of people from New York whose dollar amounts were hundreds of thousands, even millions of dollars, who got 1 or 2 years. Meanwhile, I go out to a jail in Detroit where there are people who have lost $500,000 and received 30 years. It's just a total disparity where it shouldn't be like that. I don't think sentences are based on future success. Some judges are kind enough and smart enough to consider that, but some aren't. Almost like having this AI system that recommends a sentence in addition to the judge could be super interesting. There’s a different data perspective that could be beneficial.
01:07:08	Shaan Puri	yeah that's that's a cool idea
01:07:10	Sam Parr	It's crazy because it could be like this: a judge is in a bad mood or has seen certain patterns that are biased. Yeah, I mean, it is pretty wild. You know, I've had friends go through some of this stuff and they're like, "Oh, this person was in a great mood today," or "I just happen to get this person who falls under this political party, and this is what happened." It is... that is pretty crazy.
01:07:33	Billy McFarland	It's just tough. And like, look at Elizabeth Holmes. She realistically could have gotten 2 years, or she could have gotten 35 years, right? And it's like, it's up to one person to determine what that length of time is. That's a big task for someone to take on. And yeah, unfortunately, the system isn't fair.
01:07:49	Shaan Puri	So, do they have like a... like, you know, if you go to a company and you're going to get a job, it's not just up to the manager to pick a random number for what you get paid. It's like, no, we know for this job title, with this many years of experience, this is the range. The range is between this, this, and this. If you're going to go outside of that range, you have to have a pretty strong indicator. People have to be notified that I'm going way outside the normal, expected range in order to make this offer. Yeah, it's almost like they kind of need that. Or, I don't know, maybe they have some version of that for judges who are trying to send this.
01:08:23	Billy McFarland	They have a guideline system that gives you a recommended range, and that definitely helps. I think the issue, though, is that it's really hard for the judge to get to know someone in such a short period of time. Those who have access to great attorneys have an advantage because, in the federal system, your attorney's entire job is to present who you really are as a person and why you should be afforded a second chance at some point in the future. People who don't have access to quality attorneys just don't really have that same opportunity to explain why they should have a second chance. So, I think that the AI probably benefits more lower-income defendants, which is most of them, who can't afford their own attorneys, to show they're more of a human than just what the crime is.
01:09:06	Sam Parr	is on
01:09:06	Shaan Puri	did you have a fancy lawyer
01:09:08	Billy McFarland	I had a good lawyer, so... and I just made it impossible for him, right? Like, getting in trouble again while on bail, there's just... nothing he could have done. I was just a moron. Like, I could've had 20 lawyers, it wouldn't have mattered. I would've, you know...
01:09:18	Sam Parr	Have you ever seen that movie Catch Me If You Can? Of course, it's a great movie. So, I read about that guy a lot, Frank Abagnale Jr. It turns out that most of what he claimed in his book about his crimes is likely mostly lies. I think he's been proven time and time again that he didn't actually do what he said he did in terms of crimes. But he glamorized it and then turned it into a pretty successful consulting business. I don't know how big it is, but I looked up where he lives, and he has a multimillion-dollar home. He's always wearing these nice suits, and he looks like he's done a good job. When I look at him, Billy, I'm like, "Well, that guy is kind of like a good example of turning shit into gold and turning a situation around." What did you ever think about kind of going that route? I think that...
01:10:04	Billy McFarland	I would just... yeah, I'd hate to live off of like Fyre [Festival] for the rest of my life. And then there's like a short window of opportunity where the attention from it will allow my next business to start with a springboard. But I'd much rather be known for and fail or succeed at a new business than being someone who just talks about Fyre Festival for the next 30 years. Like, that's boring as fuck.
01:10:27	Shaan Puri	but
01:10:27	Billy McFarland	I I under I understand why some people would wouldn't wanna do it
01:10:30	Sam Parr	I agree, it is boring, but when you're in debt of $25,000,000, it's like... well, you know... Yeah, I unfortunately have to sacrifice my excitement in order to make this work.
01:10:41	Shaan Puri	On the other hand, he has got nothing to lose. Really, what does he have to lose? He's got, like, alright, starting back from scratch. His reputation was pretty tainted, and he's in a pretty deep restitutional hole where he has to pay back like $25 to $30 million or something like that. So, why not swing and do what you want with your life? I guess it is, in a way, a good idea to just go for whatever is the most exciting, fun, and fulfilling thing for you.
01:11:13	Billy McFarland	And how do you find pride, right? I think that talking about a failed business when I was 24 and 25... when I'm 40, I'm not gonna wake up with juice to keep going. Like, if I see somebody else doing that, I'm like, "Oh, what a fucking loser." I don't wanna be that person. So I'd rather go and try to improve and, whether I fail or succeed, just try something new and different and try to build something.
01:11:34	Shaan Puri	So, if it all works out, if life goes the way you want it and you're now 65-70 years old, what's... Yeah, Billy McFarland, who is he? What happened? If it all works out for you: [Context: The speaker seems to be asking about the future aspirations of someone, possibly named Billy McFarland, and what their life might look like if everything goes according to plan.]
01:11:45	Billy McFarland	Yeah, he took his failures, learned from them, and used them as a springboard to build something new. Whether it's Pirate or something else that I do in 10 years from now, he went for it. He made good friends and helped people along the way. If I can pay back $25,000,000, amazing! If I pay back $1,000,000, but you know, I tried and did it honestly, that's okay too, I think. I actually believe that a lot of the investors listening would probably agree with that, as long as it's done the right way. At this point, it's less about the money and more about how I change.
01:12:17	Sam Parr	Well, we appreciate you coming on. You know, this was like... when we were preparing for this, I was like, "Man, I don't know how to approach this." I don't want to glamorize someone who's done something bad, but this was a really confusing thing to do. But I'm happy we were able to talk. I'm gonna be following your story very closely. I'm very eager to see how you pulled this off, and frankly, I want... you know, I want redemption to be real, and I want it to work. Everyone deserves a second chance, so I hope it does.
01:12:46	Billy McFarland	thank you guys super cool to finally be here so sam and sean thank you guys
01:12:50	Shaan Puri	thanks for coming on

Discover

Listen

Catalog

Connect

Fyre Festival Founder Shares His Next Business Venture With Us | Billy McFarland Interview (#399)

Transcript: