“So many things had to go right to make it this big of a failure.” — Billy McFarland on the demise of the Fyre Festival

Controversial chess legend Bobby Fischer possessed an aura. And when an opponent entered it, “terrible things happen,” wrote The New York Times in 1972. “Combinations turn out faulty” and “well-tested openings develop flaws,” wrote vaunted journalist Harold C. Schonberg. “Outright blunders are committed,” he continued.

Similarly, Steve Jobs was said to possess a “reality distortion field,” according to Apple’s Vice President of Software Technology Bud Tribble. “In his presence, reality is malleable. He can convince anyone of practically anything. It wears off when he’s not around, but it makes it hard to have realistic schedules,” Tribble reportedly said in the 1980s. Writers have used the reality-distortion field to refer to a number of other characters ranging from Bill Clinton to Elon Musk.

But one of the most prominent recent examples of the promise of the so-called reality-distortion-field to mislead comes courtesy of Billy McFarland, the brainchild of the Fyre Festival, an epically failed luxury musical extravaganza in the Bahamas and the subject of Netflix and Hulu documentaries. While McFarland helped conceive an elite experience on a private beach with white sand, gourmet food, luxurious dwellings to listen to music from famous musical acts, guests arriving at the locale found none of those things. Instead of flying in a private jet to a private beach, guests flew en masse via a discount airline to arrive at a gravel-strewn section of the island Great Exuma. For dwellings, they found soggy FEMA tents and portable toilets, although not enough to accommodate all of the guests. Instead of gourmet cuisine, they received prepackaged cheese sandwiches. The fiasco ultimately landed McFarland in jail with a six-year sentence. The judge in the case also ordered him to pay $2.9 million at 30 percent interest back to the defrauded lender EHL Funding.

Not Knowing What Is Going On

Billed as “the cultural experience of the decade,” the Fyre festival may be the ultimate example of how the massive gulf that can form between the digital and physical worlds. Customers who were enchanted by Fyre’s glitzy online marketing campaign were “completely in the dark,” said Richard Howells, vice president at SAP Digital Supply Chain. Someone who paid a couple of thousands of dollars — or tens of thousands of dollars — had no means of verifying what they were getting in exchange. But it wasn’t just the customers who didn’t know what was going on. Nobody involved with the event seemed to. McFarland claimed his team “had 250 houses rented for millions of dollars, with paper receipts and pictures of every house,” in a Hulu documentary on the saga. “We had a box of physical keys, cars to take people there and maps for every single house. The box of keys, unfortunately, it went missing.”

The entire saga serves as a virtual counterexample to emerging technologies such as the Internet of Things, which promise to bridge the gap between the physical and digital worlds. The technology enables users to track and interact with objects remotely. If McFarland’s doubtful story of having a box of hundreds of keys was true, a simple IoT-based location tracker could be used to locate the box.

If the Internet of Things has a central promise, it is that it can make the physical world digital.

The technology gives people the ability to monitor and operate objects remotely, keep tabs on the supply chain while generally ensuring that expectations line up to reality. The technology can also be used to gather customer data.

An Example of How Not to Run an Operation

By contrast, the Fyre fiasco serves a sort of antithesis to that idea. If skeptical concert-goers would post questions or criticism on the Fyre Festival brand’s Instagram account, the social media company helping manage the event would simply delete them. The company even blocked users for asking simple logistical questions.

But the real problem was rampant disorganization, misinformation, budgeting snafus and other planning missteps, ranging from hoping to save money by not ordering enough portable toilets to planning at the same time as the annual Regatta, which is one of the busiest events of the year. When the Fyre Festival’s planners learned Bahamian authorities seized their merchandise for failing to pay custom bills, McFarland reportedly ordered that event staff simply steal back those goods.

And when it became apparent that there was no possible way the event would take place in a manner even remotely resembling the glitzy YouTube promo, the event planners had moral reasons to inform attendees of the situation, or to at least reschedule the event to allow for sufficient planning. They didn’t do either.

Despite the series of epic missteps, the Fyre Festival team was extremely effective, initially, in creating customer delight, Howells said. They convinced their customers they could “create a beautiful experience with beautiful people and wonderful talent,” Howells said. “But from a business perspective, you can’t stop that customer experience when you’ve made the sale.”

For many businesses, some type of supply chain management takes center stage after a sale is made. It is “really how you deliver on that initial promise by delivering a great service experience and a great delivery experience and ultimately, a great product experience,” Howells said.

If, on the flipside, customers have a bad customer experience, they may never buy a product from that firm again. And it is likely that such disenfranchised customers would leave negative feedback about the experience online or vent about it on social media. “That has an even more damning effect on that company’s reputation. It’s not just the lost business from you. It’s negative publicity as a result of a poor customer experience,” Howells said. “So the supply chain and delivering on that promise is critical to a good customer experience and to the brand of the business that it provides. And ultimately, you live and die by your reputation and your brand.”