Fear of Missing Out (FOMO) doesn’t just apply to girls’ nights out anymore. FOMO has made its way to the business world. Everyone is so afraid of missing out on an opportunity that they are thrusting aside logic to get in on the ground floor of the next big thing. Unfortunately, this kind of eagerness attracts plenty of people with limited financial resources and maximum hustle. These people might not be great at writing business plans or doing a P+L, but they can fast talk and sell the heck out of a dream. Enter Billy McFarland and Fyre -- the app turned scandalous festival, turned epic punchline that was explored in two separate documentaries on Netflix and Hulu this month. As we watched, all we could think was, HOW THE HECK DID THIS HAPPEN? Here are some tips to help keep you out of Fyre and other similar schemes.
1. Beware of Buzzwords
Those featured in the documentary who were willing to question the festival’s sketchy founder, now convict, were fended off with terms like “visionary” “innovator” “game changer.” Avoid getting caught out there by remembering that just because you read a term in Forbes or heard it on Squawk Box doesn’t mean its automatically a tentpole for a viable business plan. Ignore the promises to “disrupt” and “revolutionize” and get answers to your questions in plain English.
2. Don’t Invest in What You Don’t Understand
As Michael Arceneaux once said, “Social media has made it easier than ever to pretend your hobby is your profession.” Similarly, it is easier than ever to flaunt profits that don’t exist. Everyone knows it’s possible for a company to operate in the red, but If you don’t understand how the company plans to monetize the hype they’re building and the influence they’re wielding, more than likely neither do they.
3. Do Your Due Diligence
Catered lunches at trendy co-working spaces are good, fully vetted financial disclosure statements are even better. Make sure you know the full scope of the company's' fiscal situation before accepting a position, signing a contract, or advocating for a product or service. Knowing what’s what allows you to make informed decisions and in the case of a major disaster like the Fyre Festival, it can help you stay out of the FBI’s crosshairs.
4. Look For Systems
If there are no systems in place to address unexpected obstacles like inclement weather or security concerns at an event, In the case of the Frye Festival, that ’s a clear sign that they are in disarray. Also, if your paycheck is consistently short or you are getting paid in bags of cash (and it's not a drug deal) then maybe, just maybe, you don’t know the full story. There’s startup culture, and then there’s outright chaos — learn the difference between the two.
5. Respect Boldness, Don’t Worship It
In the days of the celeb-preneur, the loudest person in the room often appears to be the most successful but don’t be misled by the hype. No matter how Zuckerbergesque their hoodie, or Stevejobsish their black turtleneck, no one is infallible. Let me repeat that, no one is infallible. Keep this in mind at all times because a scammer’s biggest asset is their ability to separate you from your critical thinking skills.
6. Check the Receipts
McFarland was able to get people behind his vision on the back of Magnises, another of his companies that racked up horrible reviews. People were willing to work with him without understanding why the reviews for his other company were so bad or getting an explanation from him on how he addressed it. If he left people hanging without explanation after taking their money, chances are he’ll do it again.
7. Always Get a Deposit and Stick to Payment Schedule
Dozens of people worked on the Frye Festival on the promise of getting paid later. What? It’s not clear who had contracts and who didn’t, but it seems very few people got deposits before starting their work or stopped working once no payment was made. If your terms of service call for a deposit and the client can’t pay it, the chances of them being able to cover your other invoices are not good. If they pay your deposit, be sure to stick to all scheduled payment deadlines and stop all work once a payment is missed.
8. Say No to Blind Optimism
There's a scene in the Netflix film where one of the contractors highlights a massive problem with housing for the guests -- there wasn't enough. The number wasn't off by a few, but potentially a third of the people confirmed would have no accommodation. McFarland told him, "we’re not a problems-focused group, we’re a solutions-oriented group, we need to have a positive attitude about this.” We're all for optimism and a positive attitude, but no matter how solutions oriented you are, you're not going to manifest physical space and housing for hundreds of people magically. Its okay to stay positive but don't let positive thinking and optimism in the face of contradicting reality lead you into delusion.