In recent years, the emerging trend of social entrepreneurship have lured young dreamers to become social media influencers, marketing gurus, app builders, or to do/be the next big thing. But what are you supposed to do once you get there? The problem with this trend is that there is no emphasis on making a profit that can support the continuous sales execution.
In other words, no one is asking the important questions: “What should I do now that I’ve made the sale? Can I deliver what I promised to consumers and still make money? Is what I’m doing sustainable?” The most common approach recently executed is this attitude of ‘let’s see how it goes’, but it is rarely resulting in victory.
A great example of this trend in action is the Fyre Festival. The recent documentaries covering the story on Netflix and Hulu had me shouting and throwing popcorn at my TV. Every five minutes I was baffled, thinking to myself, “Why didn’t anyone pay attention to this aspect? Why are they focused on one thing when they should be addressing another!?”
From start to finish, the Fyre team was focused on publicity by engaging marketing firms, social media influencers, and using apps to build their brand. However, at no point did anyone think about the actual financial or operational implications of what they were building.
The idea of the Fyre Festival was brilliant! If executed properly, it could have been a huge and ongoing success in the festival business. Even the Fyre Media App idea of hiring celebrities was innovative and original.
Unfortunately, neither of these ideas were given the chance to flourish. Here are three key elements that were missing from the whole Fyre project:
1) Project Planning. This is the largest missing piece. Although the Fyre team talked briefly about how the project should run on a few different occasions, a distinctive, end-to end project plan was never developed.
2) Delegation of Responsibility. Because the team’s priority was marketing for the event, no one was working in congruence or clearly responsible for execution of the project. The clearest example of this was when they introduced a brand new project coordinator just one month prior to the event. Bad idea!
3) Budgeting & Forecasting. The documentary referred to some budgeting and financial forecasting however the team failed to compare the actual costs against forecasted numbers and made no efforts to reduce or manage the difference between the two.
These are relatively common problems for growing companies that have created demand by concentrating largely on marketing but find it difficult to serve their clients in a profitable way.
Let’s discuss each of these elements.
1) Project Planning
So what exactly is a project plan? It’s a document designed to guide and control the execution of any given project. A good plan will include details on all aspects of the project, timelines, and Gantt charts to detail which activities need to be completed before others begin.
A project plan for the Fyre Festival should have addressed all the following concerns before the team began their marketing efforts:
Date of the Festival: Does this fall on a holiday or overlap with another important event?
Location: How many attendees are expected/what is our capacity?
Accommodation: Does this location have surrounding hotels or Airbnb’s? How will the attendees get around the area?
Transportation: Air and ground
Facilities: The basics, like restrooms and first aid
Security: What kind of protection/safety considerations do we need?
Food & Drink: Are there any permits to obtain or restrictions to comply with?
Once all of those elements were reviewed and forecasted, the next step would have been to prioritize them. A Gantt chart like the one below would have been extremely helpful for the Fyre team. Many project management tools on the market have the easy creation of these charts as a standard feature.
You might be wondering why it takes a whole day to determine a date and five days to determine a venue.
Well, in this case, the Fyre Festival was unintentionally planned on the same weekend of a famous historical event on the island, known as the Exuma Family Regatta. The Regatta is one of the biggest annual events in the Bahamas, so any nearby hotels on the island had already been booked. This caused the Fyre team to scramble to find other accommodations. It’s important to consider a date and how it might conflict with other events or gatherings. A simple google search could have saved the team an enormous headache.
Allowing at least five days to research and determine a venue or location may seem like overkill, but actually vetting the venue really needs that much focus and effort. The Fyre team selected Great Exuma at random, and never considered tax implications, transportation, or accommodation to ensure they could successfully host a festival there. All of these factors must be considered before any thoughts to marketing.
2) Delegation of Responsibility
While I was watching the documentaries, I was noticing that one or two people were responsible for everything, and several others were doing things without any real coordination.
For any event, especially one of this massive scale, assignments and areas of planning can be chunked down and delegated to individuals or smaller teams, who can then report to the main event director.
Here are some of the obvious positions that should have been created from the beginning:
Although some of these positions did exist, most of the team members held only the title with no clear division of responsibilities. Additionally, the main organizers added several new members and created new positions just weeks before the event, which put the success of the project at a huge risk.
3) Budgeting and Forecasting
The last major flaw was the team’s noncompliance to their financial budget. In the documentaries, several reported that a budget was discussed, but at no known point was the actual spending going on compared to the budget, and therefore no one flagged it or brought it to the attention of the organizers. No regular meetings were set up to ensure the project ran smoothly in terms of operations or financial resources.
Elements of the budget included:
Venue: rental costs for time allotted
Marketing: social media campaigning, influencer backing, print materials, design work, etc
Catering: bartenders, servers, food and drink, seating area costs
Entertainment: musicians, DJs, celebrity talent, associated housing and transportation costs
A/V: internet/wifi access, projectors, speakers, microphones, cameras, lights, etc
Miscellaneous: venue decoration, event staff, taxes, fees, all other costs
In healthy budgeting, once the needs are discussed and the numbers determined, it is vital to conduct frequent meetings to analyze and compare actual spending vs. budget. This way, the team can know which areas are meeting expectations, and which need improvement or adjustment. The goal is no surprises!
The Fyre Festival could have worked, and it almost did. I applaud the team for an excellent idea, however unfortunate it was that the project never left the ground. While few can criticize their very successful marketing strategies, the fact remains that their extreme disregard for the crucial areas of finance and operations was ultimately their downfall.
It’s not too late for a second attempt, and my hope is that if they were to try again, they would learn from their mistakes and be sure incorporate better planning all around.
These three important elements apply beyond event planning to many ventures needing execution; a product or website launch, restructuring a business, etc. Even the smallest business decisions need to be well thought out.
In business, financial and operational planning must be valued at the same level as marketing. Make sure what you promise can be delivered, and make sure it’s profitable to you.