Sam and Shaan interview Billy McFarland, the founder of Fyre Festival, three months after his release from prison. Billy walks through his origin story — from building websites in middle school to Magnises (the black card startup) to Fyre Festival — and explains where things went wrong. They also discuss his new venture Pirate, his time in solitary confinement, his thoughts on the prison system, and what he’d do differently.
Speakers: Sam Parr (host), Shaan Puri (host), Billy McFarland (guest, Fyre Festival founder)
Intro: The Hosts Debrief Before the Interview [00:00:00]
Sam: Most internet entrepreneurs, when they get into starting businesses, do things that are either black hat or gray hat, and then they realize: I gotta do things legit because I don’t want to go to jail and I can make more money 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?
Shaan: All right. Today’s pod is interesting. We just had Billy McFarland on. He’s famous for the Fyre Festival thing — basically this huge Coachella-type event that went viral — and he ended up committing a ton of crimes that he admitted to, and was charged and convicted of somewhere around 25 to 30 million dollars worth of fraud. We just had him on. Very confusing pod, Sam.
Sam: I think not confusing — but mixed emotions.
Shaan: 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 — his origin story, how he got to Fyre Festival, almost like where it all went wrong. Where did he start making mistakes and eventually committing crimes? We talked about life in prison and what it was like in solitary confinement. We talked about what he’s doing now and how he’s trying to come back.
Sam: Me and Shaan are a little bit hard on his new idea, I would say.
Shaan: Well, to the point of — if this was just a random person on the street, I would not have been as harsh. But I felt like I had the license to be a little harsh on this one.
Sam: We talked about that. We talked about other ideas, about what he could do, other business opportunities he sees. Pretty fascinating guy.
Shaan: Very fascinating. The thing that sits bad with me — or confuses me — is he’s very likable. Very charismatic, very charming. And I want him to win. But he did a lot of really bad stuff, and he seems a little coached in the sense that right up front he’ll say, “What I did was terrible, I deserve no sympathy, I was wrong and I was an idiot.” He’s very quick to own that, which is great. But I also think that’s someone who understands: this is the message, I gotta stay on this message.
Sam: It’s like when you have a star athlete in high school and you see them doing bad stuff off the field and you’re like, “Dude, you have it all — you’ve got the talent, please don’t blow this.” It hurts to see someone with so many gifts do such bad stuff. That’s a little bit how I felt. But I say this at the end — I’m eager to see how this story ends. I’m going to be following it.
Shaan: Ben, our producer, thought it went great — he was messaging us during it. I think people will like it.
Sam: Yep. All right, enjoy.
Billy McFarland Arrives: Restitution and Pirate [00:03:00]
Sam: All right, let’s just get right into this. It sounds like you have staff — you just asked someone to get you a coffee. Are you back? You’re in the mix again, you’re working?
Billy: Yeah. Broke as hell, but taking advantage of anyone I can get to help me try to rebuild and start making things right.
Sam: Do you have like a crazy restitution thing? So we should explain — this is Billy. Billy created Fyre Festival. You may have seen the documentaries. He just got out of prison. And one of the things associated with it is you have more than 20 million dollars or something that you have to pay back in restitution to a combination of investors, creditors, people like that. How does that work? Do you have to give them every dollar? Is it a certain percentage?
Billy: Yeah, it’s brutal. I just can’t think about that big number because then I lose track of what’s happening today and tomorrow. How it works is I have to pay a percentage of all my personal income directly back to restitution — after taxes, but calculated on gross income. So if I make a thousand dollars this week, I have a set percentage I have to pay on that. And in addition to that, Pirate is giving 10% of all its revenue back to restitution as well. So if Pirate gets a 100K sponsorship deal, it’ll pay 10K right away, and then whatever I get as salary or income, I’ll pay an additional percentage on top of that. I’m just trying to pay more than I have to.
Sam: What’s the percentage? Is it crazy or like five percent?
Billy: It’s more than five. I’m not sure exactly where it’ll end up — it varies based on income and gets readjusted every couple of months.
Sam: Why are you doing this right now? I’ve listened to your podcasts, watched the documentary, read a little bit — you made a massive mistake. I think you deserved to be punished, and I don’t feel sorry for you for having to do that. Four or five years is a lot. My current stance is everyone deserves a second chance. If you do the crime and do the time, there should be a point where it’s like, “All right, you screwed up, you get it, you can try again.” I feel that. But when I see you doing this podcast push right now, I’m like — is he taking advantage of us? Why is he doing this? What is he trying to sell? Or is this therapeutic, or are you just trying to make a living?
Billy: Totally deserved what I got. And I think there are days where I felt I got too much time, and days where I felt I didn’t get enough, just based on everything else happening in the world. 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. If three or four companies are listening and they’re like, “Oh wait, he actually does know how to market, he can get us attention” — they’ll come hire me. That’s my entire purpose for doing this media run right now.
Shaan: Looking at your Twitter comments a little bit this morning before you came on — a lot of people, and other hosts have gotten the same feedback: “Why the hell would you give a con artist any time of day?” What’s the response to that?
Billy: I think the response is: anyone who has taken life to the extreme or too far has learned a lot of good and bad lessons. They can use me. If there’s one entrepreneur who’s trying to raise money and thinks, “This is harder than I thought 60 days ago” and they’re about to send out a monthly investor update with fudged numbers — if I can stop one person, really cool. And on the other end, if there’s somebody going about it honestly and they’re scared to take that leap, if I can inspire them to go try to make their brand pop off, that’s also cool. I think there are lessons here people can use wherever they are in their entrepreneurial journey.
Early Life: Websites, Side Hustles, and Spling [00:09:30]
Sam: You are kind of a hustler, so we’ll go fast through it. You basically started creating projects in middle school — not even companies, but you were building products and launching them as websites. Is that right?
Billy: Yeah. I basically started doing super basic HTML and CSS in fifth or sixth grade. This was 20-plus years ago — the Wild Wild West days of the internet. Started a couple of web hosting companies and basic social networks. That was really my foray into entrepreneurship.
Sam: You end up selling at least one of them, right? For a small win?
Billy: Yeah, a couple thousand dollars. Life-changing to a kid who just wants to buy candy, but obviously kind of irrelevant in the big picture. I think it just got me into the game.
Sam: Then you started a media site called 24Scene in high school and sold it in 2014 when you were 16 — to a company called Buddy TV out of Seattle?
Billy: Yeah. It was a content network. I loved the TV show 24, so I was basically clipping snippets of the show. This was before streaming, so there was very little media available after episodes aired. I was doing it for a half-dozen TV shows. I had this business partner at the time who was in his mid-30s in Michigan — never met him — and he orchestrated the sale, then paid me on Western Union every two weeks for the rest of high school.
Sam: How much did you make doing that?
Billy: Tens of thousands of dollars. At the time, it was wild.
Sam: From there you went to college, but you never had a real job, right?
Billy: I basically started living off my sale capital in this little suitcase under my bed freshman year. For the first time I started going out — nightclubs, dinners, exploring what every 18-year-old wants to see. Flew through all my cash in a couple months. I was broke sitting in this small college town, like, what can I do?
So I got back to what I knew, which was basic programming, and started a social networking website called Spling during my freshman year of college. That introduced me to the whole world of venture capital and angel investing. I essentially dropped out halfway through freshman year to work on Spling, and then I started this whole run of VC-backed startups.
Sam: My wife — through friends of friends — apparently had some run-ins with you at Penn. She and her friends would tell stories about: “Yeah, we knew him. He would always rent these fat cars and drive everyone to New York City from Philly and pay for everything.” They just thought this was some guy with some internet business and money. No one knew what it was.
Billy: Yeah, I went to Philly for a company called Dream Adventures, which was kind of like an accelerator-incubator program. I was dating a girl who I think was a sophomore at Penn, so all my peers and friends were in college. I’d be at Dream trying to raise money by day and at terrible college parties by night, and then obviously trying to take everyone to New York.
The Pivot: From Hobbyist to “The Man” [00:16:00]
Sam: What triggered the switch from “I’m a kid programmer who likes to make hobbyist websites” to “I’m trying to be the man”? At some point all your ventures switched to things that were super cool — the Black Card thing, Fyre. What triggered that?
Billy: I think I was living these alternative lives and not really fitting in with either one. I was a college kid trying to raise money from VCs, and at my little school the majority of students hadn’t heard the word venture capital in their lives. Then I’d go hang out with these VCs who were titans of industry, and go back to the college realm. I was always interested in merging the two worlds.
When I was hanging out with VCs, the college kids all wanted access to that. They would hire me to help market or consult. So it was kind of hustling and trying to make side income to fund a lifestyle, while trying to keep up with this new world that my basic programming had been giving me access to.
Magnises: The Black Card [00:18:30]
Sam: What was it — Magnises? You raised like four to six million dollars?
Billy: Yeah. I turned 19, graduated from Dream Adventures, moved Spling to the second-ever WeWork labs down on Barrack Street in New York. There were like 30-ish hustling entrepreneurs all trying to make it, and I was a kid. Went out to dinner with a group of these friends I was starting to meet in New York — a little older, a little more established — and one of them pulls out this black American Express Centurion card and kind of slams it on the table to show off. I’m like, “I have 40 bucks in my Chase account. How can I do this?”
So I went back to my WeWork office, went on Alibaba before Alibaba was really a mainstream thing in New York, bought these black metal cards and a credit card copier. They came in the mail, I took my Chase Blue debit card, copied it onto this black card, went to the pizza place across the street. The guy was treating me like royalty. Went back into the office and just sold these cards to all the entrepreneurs in the WeWork. And then Magnises was born.
Sam: How big did that business get before it went south?
Billy: Magnises did like 11 or 12 million in total revenue over three years. My biggest mistake was getting distracted by Fyre. In the run-up to Fyre Festival, for those four or five months, I started trying to get money from anywhere and everywhere and basically milked the Magnises customer base as much as I could. When Fyre crashed, Magnises went down with it.
Shaan: What was Magnises exactly? It wasn’t a bank account — it was just literally the physical card plus some perks, right?
Billy: Exactly. It was the physical card — same bank account you had — plus discounts to certain concerts, certain clubs, a discount for a private jet service. You’d buy the card for 300 bucks and you got access to a sick physical card, and some perks.
Sam: And you would negotiate the deals, or basically white-label some other company’s deals?
Billy: Pretty much. But what was really interesting was the members were bringing all the perks and benefits. So initially I sold these cards, and now we have a couple hundred members. I thought, “Our member base is super interesting — these entrepreneurs, these people from all these different industries that my friends don’t have access to. Let’s get a space where they can all come and connect.” So I went and rented a series of lofts and townhouses I couldn’t afford, where basically members could come and hang out anytime.
Then as Magnises grew, we built an app where members would come to us saying, “Hey, I work at this brand — this plane company, this fitness studio, this fashion brand. Let’s do something special for the rest of the members.” They would pay us to advertise and give access to cool stuff, and the members would pay us an annual fee to get access to the perks. We were making money from both sides and relying on the actual member base to create the offering.
Shaan: Was it profitable?
Billy: I was just so bad with financial management. We raised a few million bucks, but we never had more than two months of runway in the entire history of the company. I’d raise a round, and like 80% of that round was already spent in terms of bills owed to employees, contractors, agencies. So it was always: raise a million bucks, but I owe 800 grand, and now we have two months of runway left.
My biggest inability was to communicate that problem to investors. I just kept saying, “Things are great.” I couldn’t explain how much we needed and why. That caused us to have to basically become profitable super early, so we started monetizing the user base way more than we should have, which diminished the value of the brand. For like the last year and a half, two years of Magnises, we weren’t profitable but we were paying all our bills just based on revenue. We tried to monetize too quickly to keep up with my crazy expenses.
Sam: Even Magnises had issues, though — there are stories about members saying they thought they were buying tickets to something and turns out they didn’t actually have them. The Hamilton tickets story?
Billy: When Fyre Festival came and I started going down this terrible rabbit hole, I needed money from everywhere, and that included overselling and over-promising things to Magnises members to get capital. It just took everything down. I was wrong, I was lying everywhere, thinking I could make miracles happen. Sometimes we did, but more often than not we crashed and burned.
The Fyre Festival Origin [00:28:00]
Sam: Do you ever just laugh at, like, “Wow, what the hell did I do? How far did this go?” There’s a reason there are documentaries about it — it’s literally like a movie. Is there any part of you that looks at this and says, “I can’t believe how far I let this thing go”?
Billy: Totally. And I was thinking through the SBF scenario for the past couple of weeks. He’s obviously in a completely different stratosphere, but in his position it’s really hard to say no to someone with 10 billion dollars. 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. I think, to a much larger scale, that’s what happened to him. But it also happened to me — I had thousands of members and all these artists and talent promoting the brand, and I was in a position where I was way too young and way too immature, and the people who should have helped me were almost scared to say no.
I kind of relished and thrived off of that, and it led me down this terrible rabbit hole. And when people started saying no, I was too far in my own head — “I’ve pulled this off and proved you wrong before” — I just didn’t know how to press the red button to stop.
Sam: I think the reason you’re interesting is that most entrepreneurs — people who listen to this podcast are entrepreneurial — most of us, when we get into starting businesses, do things that are either black hat or gray hat. And then we realize, “Okay, I know how to make money, but I gotta do things legit, because I’m going to make way more money and I don’t want to go to jail.” You just make so much more money being legit. How on Earth did you not learn that lesson earlier?
Billy: I think the craziest thing is I didn’t know what failure really was until I failed on such a massive scale. Part of what let me go so far is that I obviously had as many losses as every other entrepreneur along the journey, but I was really good — or really bad — at blocking out that noise. I was so focused on this end goal that nothing else mattered. I just kept getting jaded to failures until the failure became so big that I was locked in solitary confinement.
Sam: What was the end goal? For me it’s like, I want to make a certain amount of money so I could have a certain house and not worry anymore. What was your motivating factor?
Billy: I want to fit in. I think I had two big insecurities and drives. One: those initial investors who backed me when I was 18 — I wanted to prove to them that they were right. Fyre was seven years later from that, and I was too insecure to show any kinks in my armor to them. And two: I wanted to be the guy who just took you to wild crazy experiences. Like, “This whole programming thing is taking me into this world of entertainment, I’m hanging out with rappers and models and comedians, and my friends don’t believe me.” I want to be that guy who can take you from your shitty desk job to this private island where the who’s-who of the world is flooding in their yachts and having a blast. It was partly proving myself to investors, and partly proving myself to friends.
Shaan: We should explain the origin. You go from Magnises, and at some point you create this app called the Fyre app — where you could book an artist, like send a booking request to Timbaland, he accepts or rejects, less middlemen, lower minimums. A marketplace to book artists. And Fyre Festival was a marketing stunt to promote the app. But at some point the two flipped in importance, and Fyre Festival became the overarching thing.
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 on weekends.” You used to go with him, and you were like, “This is so dope.” And somehow your experience of flying to these remote islands became: “What if we fly 3,000 people down to this island and do a Coachella-like festival?” Did I get that right?
Billy: You told that story better than me.
Shaan: But somewhere along the way you get to the point where you’re like, “We’re doing Fyre Festival.” And your method of promoting was what?
Billy: It all kind of stems down to — for all my terrible flaws, I was really good at taking a tangible asset that most people didn’t have access to and using that to launch a business. Magnises had this physical card that cost me like two dollars to make, and this crazy townhouse. My entire target demographic didn’t have access to a black card or a multi-million dollar townhouse in downtown Manhattan when they’re 23.
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 I come in: “Okay, guys, we have our own private island. You want to be involved?” And I used that to hopefully build the Fyre booking app.
All my marketing strategy came down to: take a tangible good or service that wasn’t available to a certain audience, give it to them, make them feel like it’s theirs, and use that to build a business. As you perfectly said, the importance quickly flipped as we launched the marketing for Fyre Festival. Fyre Festival became it, and the app became a second thought.
Sam: It’s not a bad plan. I think when the documentaries came out we were like, “Honestly, it was a dope idea.” And it’s not like Theranos where you’re like, “That was a dope idea if someone had just done it right” — where maybe it’s technically impossible. Your thing was possible. You just had shitty logistics and poor planning. The idea of the event and the actual event did not live up to the hype. But your thing was totally possible.
Why Fyre Festival Failed [00:37:30]
Sam: So what went wrong? Why were you not able to pull off what you had sold? You had Bella Hadid, Kendall Jenner, all these people promoting that it was going to be the party of the century. You sold the tickets. You just didn’t deliver the party.
Billy: 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 that if I came to them and said, “Hey, look, guys — we did this great marketing campaign, but I have no idea what I’m doing,” they would have found the best festival people in the world to come and actually execute this. But I was so scared to show I couldn’t handle it that I kept saying everything is great, everything is perfect. And that pushed away the people who would have helped me. Lying literally doomed the festival from day one post-announcement.
Sam: Who were the big backers — VCs or family offices?
Billy: A handful of venture funds and around 25 individuals, everywhere from larger family offices down to smaller angels. I just don’t want to throw anyone under the bus. I think a good portion of the investor list was sealed in the court files, and I didn’t ask for it to be sealed — I think other people did. So I just don’t want to go there.
Shaan: So you’re like, “Okay, I could have asked for help with organizing and logistics.” This is where it gets tricky. There’s always a question: was this intentionally a fraud from the start — “I’m just going to trick people and run away” — or did something get out of hand? Or from the beginning were you like, “I’m just going to trick people and take their money”? For you, where did the shift happen? Was it well-intentioned at the beginning?
Billy: I truly tried to execute the event. Literally up until people were arriving to the festival, I thought it was going to work. And obviously that’s so stupid looking back.
Sam: You knew you had tents and grilled cheese sandwiches for people who had ordered villas. How could you still believe it would work right up until the event? Are you sober this entire time, by the way?
Billy: Maybe more wine, but no drugs. Was drinking a lot. I’ve smoked weed maybe six times in my life. No Coke — never tried it.
Sam: Okay. So you’re sober-ish, and you actually think it’s going to work the day of?
Billy: Here’s my thought process. The island is so beautiful. We have this local team who you couldn’t script — they have the boats, they have the jet skis, they’re going to take people out. We have 30 artists who are paid. You’re going to have A-list talent in one of the most beautiful places in my opinion in the Atlantic Ocean, plus this amazing group of local characters who have toys for you to play on. I thought, “Okay, we’ll have a shitty food situation, we don’t have food and shelter and bathrooms, but we’ve got nature.”
Sam: Yeah, who needs food when you have tubing?
Billy: Actually, I think the craziest thing is: if we had marketed it like that, it would have been amazing. “Okay guys, I can’t figure out the logistics, I can’t afford to build 500 houses, but I somehow came up with 5 million bucks for the artists. We have these great people, we have this great island — bring a sleeping bag and figure it out.” I think with that mindset shift, people would have felt like they were owning the adventure. It would have been like a festival for however many people there were. The marketing killed me at the end — it sold tickets but it also made it fail.
The Financials: How Much Did It Cost? [00:44:00]
Sam: What would the ideal outcome have been if it had just worked? How much revenue and profit would it have made?
Billy: I have no idea.
Sam: Are you kidding me? How do you not know this?
Billy: We had a budget for 10 million dollars for the festival. I didn’t have 10 million, but I figured I could reasonably raise 10 million just off the brand we were building. We ended up spending way more than that. It got to the point where I would go to sleep with no money in the bank, wake up, and know that I had to raise a certain dollar amount just to survive. Some days it was 50 grand, some days it was 4 million dollars. I’d wake up at 9 AM and know I had until 2 PM to get X dollars in the bank to wire out before the day ended. So my life was hell, and I just couldn’t zoom out.
Sam: How much did you end up spending?
Billy: We raised 26 or 27 million, but we were making money from other sources — selling tickets, getting sponsors, Magnises was making money, I was doing consulting jobs. So in that six-month period it was probably closer to 40 million total.
Sam: And the tickets — you sold around 7,000 tickets?
Billy: I think just under 6,000. Around 3,000 people per weekend, some were given away for free and some were sold.
Sam: What was the average ticket price?
Billy: The median was like 12 to 1,500 dollars. But we sold a handful of outlier tickets for a couple hundred thousand dollars plus per ticket.
Sam: So 5,000 times 2,000 — you got roughly 10 million in sales?
Billy: Yeah, in sales. But the issue is some of the ticket money was held in escrow, some was for yachts and boats, so it wasn’t like pure 10 million dollars of free cash flow. My Stripe account got frozen with like 700 grand in it the day the festival got canceled. Money was held up in a bunch of different ways.
Shaan: So the event itself didn’t make any sense, right? You’re going to make 10 million, you’re going to spend 40. You could have just run 40 million dollars of Facebook ads and gotten a way better result.
Sam: An event would have been cool if it were like a break-even or a slight loss. But you could have gotten so much more profit just running that money through a proven channel.
Billy: But put it this way — as wrong as things are, and I can’t do this tomorrow — if I did Fyre Festival again in three years, I think almost all of the first group as well as the rest of pop culture would buy tickets just to be there to see how bad it is. The brand value is there. How can I do it appropriately?
Sam: Are you tempted to pick the right time and go again?
Billy: I have to do it again. I just can’t do it while I’m on probation. Can’t do it this year or next year. But it has to be done. And no matter what success or failures I find along the way in tech — until I execute Fyre successfully, it’s going to be there.
Billy’s New Venture: Pirate [00:52:00]
Sam: Have you seen his new company Pirate? Go to the website. It’s pyrt.com. Billy, this is the same stuff you’re doing. It’s not like you said you could program — like, when I see what you’re doing, and you did that Met Gala thing where you got in trouble for scamming people, I’m like: just do a course, dude. Just create a course and make two million dollars. Me and Shaan make seven figures a year from this stupid stuff. It’s not stupid — it provides value — but it’s insignificant compared to an event. You said you liked programming, you liked content sites. Just do something boring and straight. Why are you doing this Pirate thing?
Billy: I hear you. Maybe you’re right. But what I’m getting back to with Pirate is: I’m not trying to host a thousand 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. I can be like a tour guide for a few years of my life and eat it for a while — I’m gonna go do that. But I can give a couple of dozen people this amazing adventurous experience, and then while I’m doing that, I’d like to find interesting ways to broadcast those experiences to all their followers, and give their followers a way to get involved. I’m not trying to figure out the logistics to host thousands of people. I know I can host two dozen people. And 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.
Shaan: This is a horrible idea.
Sam: Dude, I actually don’t think it’s a horrible idea if— I think you are potentially high in capability and high in ignorance, and that’s a perfect combination for starting a business. You’ve got the confidence, like “I think I can pull this off,” and you are capable of some things — that’s actually a beautiful combination. But you also have this third part of the pie chart: reputation, past, and owing money. I just don’t understand why you’re doing this. You could run a boring-ass agency that makes 20 million a year and 10 million in profit. Like, a stunt marketing agency. Something like that.
Billy: We have that — we’re announcing it today, actually. It’s called the Pirate Collective, and that’s how we’re trying to fund all this.
Sam: Okay, let’s walk through this. I’m on the Pirate website. There’s a picture of a private island — already getting flashbacks of Fyre — and then it says “Join the Crew.” “A pirate is somebody who turns the impossible into adventure.” Give me your phone number. Then it says join the treasure hunt, virtual reality. So what you’re saying is: 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. Those people will pay five to ten grand — I’m guessing — for this really cool adventurous experience. And then you’re going to use video plus virtual reality to broadcast that experience to other people who can’t afford to go. And they get to maybe buy a virtual ticket to kind of attend. And you’re going to do that a bunch of times. Did I describe it right?
Billy: What you said, absolutely. The last thing you’re missing: we’re going to partner with a small hotel that’ll handle all the hospitality and logistics. We’ll host artists there on a regular basis, rig the hotel with 360 cameras, live stream everything that’s happening, and then give the people watching the live stream the ability to buy in and affect what’s happening on the island. They could have one of the artists go to the recording studio and impact the creative process while they’re making their song. Or they can buy the talent a drink — make them take a tequila shot.
Sam: You should have just gone full Mr. Beast. We hung out with Mr. Beast, and yeah, you are wired just like that guy. If you just channeled your energy toward “how do I 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 have the charisma, you have the storytelling ability. Just do it. Just make videos. Do ad dollars.
Billy: I hear you. I like that attitude. So let me share this — this was an island we were working with, though unfortunately I’m not allowed to go to the Bahamas, so this is just for demo purposes. But the idea is to take a one-to-one virtual representation of a property, track where all the talent is in real time, track where all the toys are in real time, and then people can click into various live streams. Once they’re watching a live stream — hopefully watching their favorite talent — they can choose actions to affect what’s really happening there. So it could be as crazy as me swimming in the reef and users deciding to chum the water — and given the sharks in the area, I think a lot of people want to see that happen. Or as simple as buying somebody a drink.
Sam: What would the financials of this be in, like, five years?
Billy: A million people paying 20 cents to ask a talent to do something, or to contribute an action toward the real world. So if everybody pays 20 cents to chum the water and a million people are chumming the water, that’s kind of where the financials come in.
Sam: I’m not asking you to promise revenue. I’m just saying, when you’re laying in bed, what do you think this could become?
Billy: I think what’s interesting is — the Bahamas gets around four million tourists a year, and if we’re doing these really interesting broadcasts, we can have more than four million people virtually come to the island in a single day. If we can totally destroy their tourism numbers in a virtual scale, I think it’s a big revenue opportunity.
Solitary Confinement [01:01:30]
Sam: Where did you come up with this idea? Were you in prison?
Billy: I was in solitary confinement. It’s totally confined, and a lot of it was just reflection. A lot of it too was: I want to get outside of these walls, get back to adventure, and find a way to share this.
Shaan: So we should say — you got into solitary because you attempted to do a podcast from inside prison, right?
Billy: Yeah. Terrible idea.
Sam: Did you know that was not allowed?
Billy: I didn’t even realize what a faux pas it would be. I think the biggest thing is — they read your mail, each inmate has different rules. Like if a journalist calls you and you do an interview, is that allowed?
Sam: That’s allowed.
Billy: I was wrong. But the toughest part is it was a gray area. I think if it had been a clear violation of the rules, my punishment would have been less strict. I used the pay phone — their available pay phones — but at the same time, you can’t cause attention to the jail. That’s what I did. So I understand why it was so incredibly stupid. But I think if it were a clear violation I would have gone to solitary for like 45 days, not seven months.
Sam: You basically had a podcast host call you on the pay phone, and you did your side of the podcast from the pay phone in like 10- or 15-minute increments, because that’s what you were allowed.
Billy: Exactly.
Sam: I understand why you think that’s clever. It’s like: what’s the difference between prostitution and pornography? If there’s a camera, you’re safe. But I still wouldn’t do it. Were you scared?
Shaan: When I was in college I did stupid stuff and got in trouble, and I remember thinking, “I never want to come back to jail again.” Solitary confinement especially — I think I would lose my mind. Seven months in a box?
Billy: I actually think it’s counterproductive in terms of reform. The other time in jail, I don’t think it’s going to have long-lasting negative impacts. But 10 months total in solitary — once for three months, once for seven — I think that actually makes it more likely that I make a mistake in the future. Obviously if I do make a mistake, it’s totally on me. But the mental hangover of knowing that somebody out there could snap their fingers and put me in a concrete box — that’s what gives me nightmares at night. I think that if anything, it makes ideas bigger or different, because you’re fearful of that outcome. There are guys who have done way more than 10 months, and I can’t imagine what they feel like. I think that’s the worst part of the experience.
Sam: Did you know it was going to be seven months, or did you not know when it would end?
Billy: I didn’t know. And I think if they had said, “This is seven months, and then you’re going home the year after that,” it would have been totally different. But they kept messing with me — basically saying, “You’re never getting out of here, you’re going to get in trouble more.” That was the biggest mind game. You just wake up every morning like this is never going to end.
Shaan: The guards were just messing with you?
Billy: Yeah. In response to the podcast, they actually tried to send me to a facility called the CMU in Marion, Illinois — a communication management unit. You can look at their inmates on Wikipedia. I’d have been one of two non-terrorists in that facility. They would come mess with me and pass program statements under my door: “Here’s where you’re going, McFarland.” I thought they were bluffing. Then a day later: “We submitted you there.” They legitimately tried to send me to a terrorist facility. You’re just thinking, “You’re never getting out, what’s going to happen?”
Sam: That is crazy. I think a fair punishment is four or five years in prison. I don’t think solitary is fair. You went to prison for lying to investors and falsifying financial documents — wire fraud, basically, fake Excel documents showing revenue that wasn’t there. You were clearly guilty. But solitary and being tormented on top of that — that seems like too much.
Billy: And you know, the festival was better than I advertised. Which is obviously impossible. I still haven’t gone to jail.
The Met Gala Scam and the Pattern [01:10:00]
Sam: I remember when the Fyre story came out, I had some sympathy in a way. And then there was a story about when you were on probation, you did something called VIP Access or a Gala thing, and that was also like a figure in some way. What was that, and how do you defend that?
Billy: The only defense is that I was an idiot. There’s no other way to get around that. I was totally wrong. I kind of got into this mindset where it’s all about the money: “That’s probably wrong, but I need to find a way to pay everybody back. Let’s get back to what I was doing at Magnises — sell these tickets.”
Sam: You needed someone to just punch you in the face and be like, “Billy, you are so talented but you are screwing this up so much.” Sounds like you were trying to do a quick fix — “If I can get the money back, if I can pay people back, then I’m not going to get in trouble about the other thing.” Is that what you were thinking?
Billy: I was scared of jail. No one was picking up my calls anymore. I was on bond. I just couldn’t zoom out and understand the bigger picture: if I sat down and shut up, sure, I’d be broke for a couple of years, but I’d go to jail for two or three years and get out in my late 20s and have a chance to pay people back the right way. I just couldn’t understand that.
But going forward, a big thought process for me — it’s been three months — is: how do I position myself, whether it’s a company or something else, to get the help I need? Do I operate within a bigger company? Do I find partners that are senior to me in experience and age, who I can trust and defer to? It’s all part of my journey right now. I think this time around I prefer those boundaries more.
Can He Actually Raise Money? [01:15:00]
Sam: Are you going to raise funding for this next company?
Billy: I think a lot of people — I don’t know — but if I had to bet, I think you probably actually could raise money. I bet there are people who would give you money.
Shaan: So tell us.
Billy: I texted like eight venture funds a few weeks ago. Literally a broken-grammar two-line sentence. Two told me to go to hell. One didn’t respond. One asked for more questions. And four just responded within a minute saying, “We’re in.”
The issue is that due to an SEC deal, I’m actually not allowed to raise securities. I can’t go raise money. The ironic part is it probably would have been easier this time — no decks, none of that stuff. I said, “Here’s all I have,” and yeah, people want to back it. I just can’t raise the funds.
Sam: And I think that would shock people — a 50% hit rate on a text message. How do you explain that to someone who’s frustrated by it?
Billy: I started trying to raise money for the first time almost 12 years ago now. The first ex-hundred people told me to go to hell. So I went through 12 years of it, including 10 months of solitary confinement, to get to the point where maybe an investor believes 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 woke up one day and could raise money. It was 12 years of totally screwing up to get to this point.
And before I raise money — and legally I can’t and won’t — I need the help and the structure in place. Let me go and market and come up with these experiences and drive attention, but have somebody else who can help me manage financials and logistics and operations.
Other Business Ideas: AI and Influencer Marketing [01:20:00]
Sam: What other ideas did you have? I’m sure you had a lot of time on your hands to think. Other potential things you could do?
Billy: I think if someone wants to really understand GPT-3 — the power of what’s in OpenAI — and just become an expert on that, you can make a killing as a consultant, teaching all these big brands what’s happening and what’s going to happen. I was reading about it for like a year in jail. I didn’t even know OpenAI was the name of the company — had random books sent in. I’ve got dozens of pages of notes on it. And then I came out and saw what happened recently, which was pretty cool. I think that could be a great company, and I bet you’d kill it because you’re pretty good at selling.
Sam: I think if I were close with you I’d be like, “Billy, do that.”
Billy: I think the concept of the Fyre app — providing transparency to a lot of these legacy entertainment systems — is still interesting. But one I think is really interesting right now is performance marketing for social media and influencers.
The reason Fyre Festival’s marketing worked so well is that at the exact same time we had 400 people post this orange tile — but these 400 people weren’t related. Some music artists, some comedians, some athletes, some models. When you’re in our target audience and you’re scrolling through your Instagram feed, you’re like, “Why are these five people who don’t know each other all posting this right now? I need to go check this out.”
So one idea I had: create a marketplace for influencer marketing where, let’s say Starbucks has a new coffee they want to advertise. They go upload all their creative assets, set a million dollar budget, and then anybody around the world can take those assets and post it to their Instagram, TikTok, or YouTube. They get a score for how much engagement their content gets, and their overall score gets them a percentage of the budget. So if Kim Kardashian posts it and crushes it, she gets 900 grand, and 100K is split up to a million other people who all kind of posted. It’s a fun way to remove all the middlemen in the whole social marketing world and allow a brand to turn all their followers into advertisers — without dealing with any of the legwork.
Shaan: It’s almost like Clout — do you remember Clout with a K?
Sam: Yeah, the overall social score thing. They raised a ton of money and sold for less than their raise. I think they sold for 100 million, which was less than what they raised at. But I actually thought it was a fantastic idea. For some reason it didn’t work. You’d be in that space a little bit.
Billy: Yeah, I think it’s interesting — providing a score to how well your content performs and getting paid off of that, but turning everybody into your promoters. I think that’s a really cool idea.
Shaan: It flips the model too. Right now you have to do individual manual outreach, negotiations, and whatever. Here it’s the reverse — here’s a giant honey pot, if you want it, go get it. And divvy it up based on actual performance versus who can negotiate the best.
Sam: Why not do that one? Those two ideas — GPT-3 expert, open marketplace for brand assets — sound quite reasonable.
Billy: Maybe I’ll do them.
Sam: No you won’t.
Billy: No, I know. I guess you just have this fire in you — no pun intended — where you’re like, “I have to go this event route.” It’s baffling. But I guess passionate people are passionate about certain things.
Sam: Logically, I just don’t want to see you fail. I want to see you succeed and prove people wrong. I want to prove that second chances can work. And when I see Pirate, I’m like, “Oh man, you’re just playing this game on hard mode.” In business there are no extra points for difficulty. In fact, you get docked points for difficulty. The harder something is, the less money you tend to make. 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. And maybe you can recruit people who are motivated to pull off something epic. Epic things have their own motivational draw.
Shaan: Which is what he just did. I saw on your Twitter and TikTok — you said, “Hey everyone, I’m hiring for my new thing.” How many applicants did you get?
Billy: We partnered with a company called Bounty Hunter World to hire. They’re trying to disrupt the recruiter model — saying anybody can refer a friend to a job, and if you successfully refer someone, you get paid the recruiting fee. Those fees can be crazy. So we said: anybody who refers a friend to Pirate that we end up hiring, we take that person on one of these Pirate experiences. The island-and-entertainer experience as a thank-you to any of our fans.
We’ve had a lot of people apply. The craziest thing is: we have no money, I’m probably paying 15 to 20 percent of what I was paying for the same role five or six years ago, and probably getting better people. It goes to show how much your mission and intention matter.
Sam: How big is the list? I put my phone number into this thing — how many people have signed up to do the treasure hunt?
Billy: Around 2,000.
Sam: Not bad. I’m shocked you didn’t get more, because that Milk Road video got 1.5 million views.
Billy: I’ve been getting a lot of inbound — Instagram DMs have gone crazy. I think the conversion to a phone number through a platform has been a little harder for us. But yeah. And actually — how do you organize all these DMs? Maybe that’s a different business: someone builds an inbox that takes inbound across Instagram DMs, LinkedIn InMail, public email, and organizes and qualifies all those leads. That’s something I would pay for on a monthly basis.
Sam: You’re building all this right now with what — you collected like 150K in revenue so far from brand deals?
Billy: Since November 1st, yeah.
Sam: Oh, since November 1st? That’s a pretty good run rate.
Billy: Don’t worry, we spent it already.
Sam: Did you really?
Billy: I mean, we’re just trying to survive.
Shaan: Have you ever heard of Pilot, or Bench? There are really good accounting software companies — like a thousand a month and they’ll just give you your P&L.
Sam: Or a part-time CFO. That might be a good investment.
Billy: I need all of it. I need help.
Sam: Have you ever heard of QuickBooks?
Shaan: FTX used QuickBooks. Look what happened.
Sam: Correlation not causation, but I mean — you should sweat the details on this stuff.
SBF, Martin Shkreli, and Prison Life [01:32:00]
Shaan: What’s your take on SBF? What do you think is going to happen?
Billy: 40 years, and then hopefully after like 15 to 20 he gets out.
Shaan: You think that’s fair?
Billy: That’s my guess. I don’t know.
Sam: I talked to Martin Shkreli after he got out, and I was like, “What was it like in prison?” He had all these stories — “I created a cryptocurrency study club, I was selling information, I was reading tons of books, I had access to the internet.” He was under the covers watching Khan Academy videos learning calculus. What did you do to pass the time?
Billy: I think the hardest part about prison is it’s designed to strip you of your ambition. There are great people in there, and probably some really incredible people. But you can’t put bad people into an environment where they’re inspired and have ambition to act on their bad impulses. So there’s this concept of being institutionalized — it’s meant to make you a human robot. Good in a certain way in that it makes time easier, but naturally I was just trying to fight against all the set processes as much as possible. I think it made my time go really slowly. I was trying to fight to find ways to stay creative.
Shaan: What’s the environment meant to make you a robot? Like, they feed you at the same time every day, turn the lights off at the same time, you can only use your phone during certain hours?
Billy: Everything is structured. You have to wear your uniform to go to lunch. I was just trying to find my creative periods and not make every day the same, so I could keep different ideas flowing and coming.
Sam: What were some things you did successfully to amuse yourself? Your little tactics, the small wins to keep that creative spark alive?
Billy: Training a lot of boxing. I had a soulmate — a Puerto Rican professional boxer — and he could wrap his hands with towels and train me in boxing. We didn’t have proper equipment, so guys would take toilet paper rolls and wrap them in tube socks to use as mitts. Finding creative ways to exercise and keep your mind sharp. Do little things you’re not supposed to that don’t hurt anybody. You couldn’t officially practice martial arts, but you could go in the back and have the guy hold your mitts for half an hour and kind of get away with it. Good way to escape.
Sam: You look like you’re in better shape.
Billy: I was fat as hell before.
Stereotypes About Prison, and What He’d Change [01:37:30]
Sam: What are some stereotypes about your experience that either proved true or weren’t true?
Billy: The racial segregation — totally true. I think being in New York, I’m a little naive and spoiled to 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, and you just can’t cross over — it feels like it’s 60 years behind the times. Something I hadn’t experienced in New York.
And what’s weird about it is: when they separate by race, it’s not always out of a place of hate. It’s just like, “No, this is just how we do things — you stay with us, they go with them.” It’s not necessarily that they hate the other group. It’s just: this is the way it’s done. There are certainly terrible racists on both sides. But the majority — it’s just “this is the way we’re going to do it.”
Sam: If you could go in and change one thing about the way the prison system works — while still achieving the goal of a prison — what would you change?
Billy: I would make sentencing more equal across the board. There are a lot of people who committed the exact same crime but had wildly different sentences. This is actually an interesting problem — maybe a really cool business: build some sort of AI sentencing system. Right now it’s up to one independent judge, and that judge — in my case — could have given me nothing or 20 years. One person literally decides the fate of your life.
What I got is fair for me, but many other people’s sentences weren’t fair. Maybe a system that takes in all the information around someone’s crime and their personal life, studies everybody else who had similar crimes and outcomes, and recommends sentencing based on the idea of future success.
Sam: What are some examples of different punishments for similar crimes?
Billy: For my situation — a financial crime — your sentence is typically based on the dollar amount that victims lost. The more you lose, the more time you should get. But there are people from New York whose dollar amounts were hundreds of millions and they got one or two years. Then I go to a jail in Detroit and there are people who lost $500,000 who got 30 years. Total disparity where there shouldn’t be any.
I don’t think sentences are based on future success, and some judges are kind enough and smart enough to do that, but some aren’t. Having this AI system that recommends a sentence — in addition to the judge — as a different data point, I think that’d be super interesting.
Shaan: That is pretty crazy. A judge can be in a bad mood, or have patterns that are biased. I’ve had friends who say, “Oh, he was in a great mood today,” or “I just happened to get this person who falls under this political party.”
Sam: Like Elizabeth Holmes — she realistically could have gotten two years or she could have gotten 35 years. It’s up to one person.
Billy: And unfortunately the system isn’t always fair. They have a guideline system that gives you a recommended range, and that helps. But the issue is it’s really hard for a judge to get to know someone in such a short period of time. And those who have access to great attorneys have an advantage, because your attorney’s entire job in the federal system is: you’re going to lose the case — it’s all about presenting who you really are as a person and why you should be afforded a second chance. People who don’t have access to quality attorneys don’t really have that same opportunity.
I think the AI probably benefits more of your lower-income defendant — 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 says.
Sam: Did you have a fancy lawyer?
Billy: I had a good lawyer. But I made it impossible for him. Getting in trouble again on bail — there was nothing he could have done. I could have had 20 lawyers and it wouldn’t have mattered.
Frank Abagnale and the Path Forward [01:46:00]
Shaan: Have you seen the movie Catch Me If You Can? Great movie. And I read about that guy — Frank Abagnale Jr. — a lot. It turns out most of what he made his book about is likely fiction. He’s been proven time and again that he didn’t actually do what he said he did in terms of crimes. But he glamorized it, turned it into a pretty successful consulting business. I looked up where he lives — multi-million dollar home, always in nice suits. He looks like he’s done a good job.
When I look at him and then look at you, Billy, I’m like — that’s kind of a good example of turning a situation around. Did you ever think about going that route?
Billy: I’d hate to live off of Fyre for the rest of my life. There’s 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 be someone who just talks about Fyre Festival for the next 30 years. That’s boring as hell. I understand why some people would want it.
But when you’re in debt 25 to 30 million dollars, you have to sacrifice some excitement in order to make it work. On the other hand — and this is an argument for going for it — what does he have to lose? Starting back from scratch with a pretty tainted reputation and a deep restitution hole. Maybe there is something to just swinging at whatever is the most exciting and fulfilling thing for you.
I think pride matters, too. If I’m 40 and I’m talking about a failed business when I was 24, I’m not going to wake up with juice to keep going. If I saw somebody else doing that, I’d think, “What a loser.” I’d rather go and try to improve, and whether I fail or succeed, try something new and try to build something.
Sam: So if it all works out, and you’re 65, 70 years old — who is Billy McFarland?
Billy: He took his failures, learned from them, used them as a springboard to build something new. Whether it’s Pirate or something else I do in 10 years from now — made good friends and helped people along the way. If I can pay back 25 million dollars, amazing. If I pay back a million but I try and do it honestly, that’s okay too. I think 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.
Closing [01:52:00]
Sam: Well, we appreciate you coming on. When I was 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.” It was a really confusing thing to do. But I’m happy we were able to talk. I’m going to be following your story very closely. I’m very eager to see how you pull this off. And frankly, I want redemption to be real, and I want it to work. Everyone deserves a second chance. So I hope it does.
Billy: Thank you guys. Super cool to finally be here. Sam and Shaan — thank you.