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Billy McFarland on Fyre Fest fraud, failure, hacking, & the long road back | E1730 — Transcript

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0:00welcome back to this week in startups
0:01everybody a little bit of a
0:02controversial guest here
0:04and uh some of you might agree
0:07about me having Billy McFarland a fire
0:10Festival in the program some of you
0:11might be upset hey why not give this
0:13slot to a Founder who is not a convicted
0:17felon I understand both arguments I'm
0:19taking a little bit of a risk here
0:20having Billy on the program but he
0:21reached out to me and I think there's
0:24some lessons to be learned and having
0:26watched some of Billy's interviews and
0:29social media I think he's in honest
0:31reflection mode so I thought I would
0:34take the chance
0:35and have
0:37the notorious Philly McFarland on the
0:40program
0:41who is of course the co-founder of the
0:45fire Fest this week in startups is
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1:36then as I said
1:38convicted felon Billy when you hear me
1:40describe you as such what goes through
1:42your mind now that you have this moniker
1:46so everybody yeah people have been
1:48trying to get at me emotionally over the
1:51past handful of months they refer to me
1:53as inmate McFarland so I think at this
1:56point like I've been through
1:58everything and heard everything and it's
2:00like just think it reminds me of the
2:02mountain that I have to climb to just
2:04get back to being above water and that
2:07means so many things and it just could
2:08be a really long journey ahead
2:10you've been an entrepreneur you've been
2:12attracted to being an entrepreneur
2:14pretty much your whole life I was aware
2:16of you before fire Festival but let's go
2:19right to fire festival and your
2:21Reflections on what happened because I
2:24think people would be curious uh after
2:27that debacle disaster
2:30just knowing from your perspective
2:33what went wrong
2:35ultimately and then what have you
2:38learned from that you were convicted of
2:40wire fraud you had a six year sentence I
2:42believe just broad Strokes you serve
2:45some number of years uh four I think yes
2:47uh so broad Strokes
2:50um you look back on it
2:52do you feel like you deserve the
2:54sentence and I guess it's a pretty good
2:57starting point and then what what did
2:59you get wrong
3:01about this whole
3:03um
3:03Enterprise known as the fire Festival
3:06yeah so it certainly deserved my
3:08sentence and I think that a lot of
3:11entrepreneurs listening can probably
3:13understand this thought process where
3:15you feel especially with your first or
3:17second Venture funding startup where you
3:18feel that the way you view the world is
3:22solely to determine based on the success
3:23of your company at that point and I had
3:26an inability to zoom out and realize
3:28that fire which is not the most
3:31important thing going on in the world
3:32and if I failed honestly most people
3:35would have been okay with that and I
3:37wrongly assumed that everybody cared as
3:40much as I did and then I equated caring
3:42to this do what it takes at all cost
3:46attitude and that's totally raw so
3:48there's just this mentality where your
3:50your startup at an early stage is not
3:53going to ruin the lives of a lot of
3:55people if you fail honestly and I just
3:57like wish I could have understood that
4:00and how did you come to this
4:02understanding uh because I think the
4:05public perception is
4:07you know your I guess there's multiple
4:10public perceptions so let's try here to
4:12get to reality did the crimes you
4:16committed did were they uh ones where
4:19you found yourself
4:21committing bending the rules
4:24and then breaking the rules then
4:25covering up you know a series of uh you
4:29know lies as sometimes people think
4:32maybe
4:33Elizabeth Holmes uh at theranos got into
4:36in other words you know you didn't start
4:38out and intend for fire Festival to be a
4:40giant fraud he didn't intend to commit
4:43wire fraud you didn't intend for people
4:45to get built out of their money it was a
4:47sort of series of smaller lives that
4:50built on them or
4:52did you go to therapy or you know have
4:55some counseling when you were in prison
4:57and come to the conclusion like wow I
5:00was sociopathic and I really need to
5:03work on myself as an individual how did
5:05you come to the conclusion that you just
5:07stated that's a great question and uh in
5:10the four years of serpent jail I served
5:1210 months in solitary confinement and
5:15there was a point in that 10 months
5:17where it's like what am I actually most
5:19sorry about and like when you're all
5:21alone after a month or two you just like
5:23can't lie to yourself anymore
5:25Isaac thought back to all the critical
5:27decisions and at the point where I
5:29started lying the investors at that time
5:32were mostly Venture funds mostly
5:34seasoned investors and whatever fire was
5:37was a very small percentage of their
5:39portfolio when I started lying I brought
5:42more investors in people maybe not as
5:44professional people people maybe who
5:46didn't understand their risks people who
5:47may be invested because of the lies then
5:50I realized when everything failed the
5:52professional investors who were there
5:54when I started lying their biggest loss
5:57was not the money their biggest loss was
5:59to trust that I violated a number of
6:02them have been backing me for five or
6:03six years at this point and I think like
6:05that hurt them more than one of their 50
6:07portfolio companies had failed it's like
6:10wow how could I have led
6:12to believe that this is a good person
6:14how could I have had dinner with him 20
6:16times how could he be playing with my
6:18children for so many years and then [ __ ]
6:20me and so like when I was alone and
6:22realized like if I had just failed
6:24honestly and didn't bring in the
6:26non-professional investors and failed
6:28honestly meaning these professionals
6:29lost their money they probably would
6:31have been okay with that had it gone
6:33honestly and that was like a really
6:34weird Awakening for me which is like wow
6:37it was okay to fail and it wasn't the
6:40money it was the honesty and the trust
6:42that I abused and like that makes me
6:44sickest today and sure I am fully
6:47motivated to pay everybody back but I
6:49feel like
6:50I will finally be able to look them in
6:51the eyes when I pay back the trust which
6:53is I think in my opinion at this point
6:55way harder than the money
6:57what was your childhood like I guess
6:59when people behave this way uh when you
7:02see a crime at this scale when you see
7:04trust broken at this scale people say
7:06hey what's the origin of this and you
7:09are an undeniably charismatic individual
7:12you're an incredible communicator
7:14so you happen to have the skill that
7:17people look for in a leader you're
7:19charismatic you communicate well and you
7:22swing for the fences so as an angel
7:23investor and as a seed investor
7:26I'm looking for people who uh are
7:29charismatic and can get people behind a
7:31crazy Vision who can think big and who
7:34want to take risks so you check off in
7:37an Investor's mind a lot of boxes and I
7:39think you know that were you always this
7:41charismatic were you the class president
7:43the class clown you know star athlete
7:47take me back to your childhood where'd
7:48you grow up and when did you first
7:50realize that you had uh some super power
7:53around Charisma and communication
7:56so I've been asked by like every prison
7:59related therapist over the years had to
8:01answer this question and I'm actually
8:02like thinking of a different answer now
8:04that I probably haven't been able to
8:06answer before
8:07um I started programming super young and
8:09like I am by no means an All-Star
8:10programmer at this point but I was good
8:12enough as like at 11 12 and 13 year old
8:15in the early days of cable internet to
8:17bring you know an early teenage idea to
8:20reality and I kept feeling like these
8:23websites I was building and you know
8:25selling to a certain level making a
8:26couple dollars to a certain level I kept
8:28feel like I was breaking the rules
8:30because I wasn't focused on school I was
8:32focused on programming and in order to
8:35justify breaking the rules to everybody
8:38around me whether that was family or
8:40friends or School administrators I felt
8:42like I couldn't show any kinks in the
8:44armor and everything had to be perfect
8:46and obviously that was a small scale and
8:48we're dealing with small dollar amounts
8:50and like small risks from some you know
8:53social media website for my middle
8:54school bedroom but I think for the first
8:56time like literally right now I'm kind
8:59of realizing that since I was always
9:00kind of breaking the rules and even
9:02though it was harmless in a certain way
9:03I felt like when the stakes were higher
9:05and I had Adventure funding startup and
9:07I had 100 employees that I was afraid to
9:10show weakness and therefore when things
9:13weren't perfect I felt like I had to lie
9:15to keep up the Mirage things were
9:16perfect and like looking now I think a
9:19seasoned investor would realize that no
9:21startup is like this right you're going
9:22through like circles of hell yeah and
9:24the fact that I was too naive to admit
9:26that it was just like crazy and silly
9:29and so in your youth people rewarded you
9:33for being technically able to manifest
9:36things in the world at that period of
9:39time you're in your 30s you were born in
9:411991 1981 yeah so you're a millennial
9:46you you get rewarded early in your teens
9:48uh for being a programmer being able to
9:51be an entrepreneur people are patting
9:53you on the head maybe or kind of excited
9:55to hear about your exploits but you know
9:58inside you realize hey I'm this maybe
10:00isn't that big of a deal but maybe you
10:03start getting a little obsessive about
10:05the the image you have as this
10:08entrepreneur and you want to keep that
10:09up you want to keep up this image that
10:12you are a great entrepreneur
10:14I think there were two sides to the
10:15equation there was like socially I was
10:17100 reaping those benefits where I was
10:20trying to live the rewards of being a
10:22successful young entrepreneur
10:24and the other side there was family in
10:26school who was like you should not be
10:27running a business you're 13 you're 15
10:30you're 18. you should be in high school
10:31you should be in college you should be
10:33focusing God I wanted to prove to the
10:35naysayers that I was successful
10:37entrepreneur and to the people who
10:39believed I was a successful entrepreneur
10:40I certainly was you know basking in that
10:42image at that point were your parents
10:43entrepreneurs or one of your parents
10:45entrepreneurs a little bit and just like
10:47grew up in a regular you know family in
10:49the suburbs in New York City but uh they
10:51were not uh a small town called Short
10:53Hills it's like 40 minutes west of
10:55Manhattan yeah the Short Hills Mall very
10:57famous right there that's New Jersey uh
11:00New Jersey yes
11:02no I'm from Brooklyn uh so it's New
11:05Jersey's like the Six Mile uh yeah so
11:08and what did your parents do if I may
11:10ask uh they're real they're in real
11:11estate so there's a small real estate
11:13stuff in New Jersey got it so they
11:15flipped houses or developed stuff or uh
11:18Brokers developers in New Jersey yeah
11:20got it and so uh you got to see some
11:23entrepreneurship up close and personal
11:25from them uh and and that led you to
11:28want to be entrepreneurial
11:31I feel like I was really lucky or
11:34unlucky to get a computer when I turned
11:36like 10 years old and I think we just
11:37got high speed internet in our house and
11:40there were just like no safeguards
11:41online at this point so this is like
11:43late you know late 1999 early 2000 right
11:46around then and cable and I was coming
11:48to your average like Suburban household
11:50and I just kind of got lost in this
11:52world where I can interact with adults
11:54and no one knows I'm 10 or 11 or 12. and
11:57I can start making decisions and like
11:59see how these decisions actualize
12:01themselves in something tangible so I
12:03think it was like this like playground
12:04for a young kid to live beyond his years
12:07from an early age
12:08I had a similar I had a similar
12:10experience in 1982 83 when my dad bought
12:13me an IBM PC Junior and I had a dial-up
12:15modem and you do get the sense that
12:18you're part of a world that other people
12:19don't get to see and then
12:21entrepreneurship you become aware of
12:23this concept of Entrepreneurship or
12:25technology entrepreneurship and venture
12:26capital
12:29all right Founders if you're a SAS or
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13:44foreign
13:47you had a company before
13:50um
13:51what was this playing or something so
13:54spling so yeah one one quick story for
13:56you I just graduated high school and
13:58this is
13:59um I think I just signed up for Twitter
14:00so this is like late 2010 I want to say
14:02May or June of 2010 and I became a fan
14:05of your stance this is 13 years ago wow
14:08and uh you were competing in the World
14:10Series of Poker and I was like obsessed
14:12with trying to learn how to play poker I
14:13think I PayPal do like 150 to try to get
14:16some action 13 years ago I had to offer
14:18people if they wanted to uh be part of
14:20and I was trying to remember how we had
14:22cross paths but I let people if they
14:24wanted your free roll uh be part of like
14:27uh my my buy-in uh so that was fun times
14:29yeah so that was 13 years ago and now
14:31you bought me a mic so thank you there
14:32you go well you know anybody who's on
14:34the podcast yeah yeah one of the big
14:36payoffs was coming on as we send people
14:37a professional mic because we want
14:38everybody to not miss a word
14:40I've always thought solitary confinement
14:42was cruel and unusual punishment
14:44describe for the audience
14:46what solitary was like on a day-to-day
14:48basis when do you wake up when do you
14:50see humans and what was that first
14:53nightlife that first night like in
14:56prison people always talk about uh in
14:59the movies like people crying for their
15:00mom uh or just maybe some people kill
15:03themselves it's a supposedly super
15:06intense you had some time to prepare for
15:08this so you know drawn out trial all
15:10this stuff take us to the you know day
15:13one and then those 10 months in solitary
15:17so you're basically in a long concrete
15:19hallway behind a metal door and there's
15:22maybe a half an inch slit on the bottom
15:24of the door and that's how you
15:26communicate with other people you can't
15:27really see them but you can kind of
15:28scream through if you get on all fours
15:30you can Scream the door to communicate
15:32with others
15:33and I think what scared me was seeing
15:36people who by all appearances were tough
15:39individuals and maybe they're like
15:41leaders of a gang they had like the
15:43intangible traits that would make them
15:44you know self-sufficient human beings
15:47but after a certain period of time
15:49seeing them totally break down and go
15:52from tough leader to Primal child
15:55whether it's the screams or the cries
15:58and as you kind of think about that that
16:01led to this idea where there is a
16:03certain period of time where if you are
16:05here for that long and you passed your
16:07breaking point you are just done and
16:09there's no coming back and you just kept
16:11internalizing like hey have I crossed
16:13that point yet like has it been too much
16:14and am I gonna be able to come back from
16:16this and that was kind of like the
16:18nagging fear
16:19so you had a fear that this would break
16:21you as a human
16:22yes and like oh this guy who I saw in
16:25the prison yard leading a hundred men
16:27who is super tough is now in the fetal
16:30position crying for his family and
16:31crying for this like if if that could
16:34happen to him and he's way tougher than
16:35me like it can happen to me too and like
16:37when's it going to happen and that was
16:39just so scary why did they have you in
16:41solitary were they concerned for your
16:42safety or did you opt for no I I kept
16:45trying to be an entrepreneur in prison
16:47and that was argently as bad as my
16:49crimes
16:50um I tried doing a podcast over the pay
16:52phone and that did not go well so it was
16:54for punishment so it was punishment yes
16:57because even when you were in prison you
16:59kept making bad choices
17:01yes correct yeah yeah and so at some
17:04point
17:05these bad choices got you in solitary
17:07yes and then you talk to some therapist
17:10or something or counselors there and you
17:13finally start to have some
17:15self-awareness or breakthroughs
17:17I think you just kind of learned the the
17:19real purpose right and when you're
17:20stripped I think for me when I was
17:22stripped at everything I'm like what's
17:24important and I had a couple of friends
17:26who really stuck with me and the letters
17:29I would get from them whether it was
17:30every seven days or every 10 days that
17:32allowed me to survive 10 months
17:35and I got out it's like the most
17:36valuable thing I've ever had wasn't an
17:38experience it wasn't a dollar figure it
17:40was a handful of relationships I had and
17:43if I hadn't lied I would have had so
17:45many more of those and they would have
17:46been so much deeper and so much more
17:47impactful like that kind of helped me
17:49re-evaluate like what actually mattered
17:52what was the original idea of fire
17:54Festival when did you have this
17:56inspiration to do a music festival
17:58because we remember seeing this
18:01marketing video and getting the
18:03influencers and so it does not seem like
18:06an unreasonable idea
18:09for uh you to want to do a music
18:12festival there's plenty of successful
18:13ones out there
18:15um doesn't seem like a crazy idea to do
18:18it on an island necessarily I mean
18:20there's no facilities that somebody who
18:21produces this events sure sure yeah kind
18:23of important to have like bathrooms and
18:24water and electricity but putting all
18:26that aside you decide you're going to do
18:28something that is comparable to burning
18:30man but with the aesthetic of maybe
18:32Coachella or some VIP Club
18:36doesn't sound crazy to me you pitched
18:39this idea to your board of directors at
18:40the time or to investors and they
18:42thought yeah why not
18:44take us to the origin story yeah
18:47so I had a couple days time called
18:48magnesis and
18:50I was trying to build a more relevant
18:52credit card for young people who live in
18:54cities and what that meant was access
18:56and experiences that were outside of
18:58your typical day-to-day life
19:00and I had a number of thousands of
19:02members at this point and as a way to
19:04give back to them I started booking
19:05music artists to do private concerts for
19:08my magnesis card holders I had booked
19:11you know upwards of a couple of dozen
19:12music artists and realized like how bad
19:14and awkward that process was there are
19:17so many middlemen and people who claim
19:19to be managers or agents and promised a
19:21fee at the end of the day it was all
19:23smoke and mirrors it was totally opaque
19:25and you would pay somebody who'd paid
19:27three people and then the artist would
19:28get a fraction of the money and I was
19:30with one of the artists I booked and
19:32basically said to him like Hey man why
19:34did it take so long for you to accept
19:35this he's like what do you mean like I
19:37said yes right away like how much did
19:39they pay you and the dollar amount he
19:40got paid was you know maybe a third of
19:42what I had paid interesting we started
19:45talking and forming a relationship and
19:47like this makes no sense what if we just
19:49make an app where you know every idiot
19:51with 10 grand like me could contact
19:53every artist in the country and make
19:55them an offer and the artist can quickly
19:57scroll through every morning and say yes
19:58no yes no so Firestone so like Cameo for
20:02personal appearances correct so another
20:05great idea honestly like you pitching me
20:07that idea I'm like reasonable idea yeah
20:12it's disruptive uh artist benefit the
20:15audience benefits and it's not going to
20:17be that hard to make and you're
20:18charismatic so it seems like you're the
20:20person to build it uh and so did you
20:24wind up building that app and then how
20:25did this become fire Festival you built
20:27the app and then literally a couple
20:28weeks after launching the app I had been
20:31taking my medicis customers to the
20:33Bahamas for a number of years I just
20:34kind of love like the outer Island
20:36Adventures in the ocean scuba diving and
20:38you know things like that so I had to
20:39bring you a small number of customers
20:40there in a manageable skill for years
20:42and started bringing the talent that we
20:45were assigning to fire on these trips as
20:47a way to basically ingratiate them
20:49within our app and on one of those trips
20:52at a high school buddy who said you
20:53should totally do a music festival here
20:55for all your magnesis cardholders and
20:57Meyer was born
20:58I think we just got really luckier
21:01unlucky that we hit an Island music
21:03festival at the right time where
21:05Coachella had proved itself as a
21:06business to investors however the
21:09influencer attendees were looking for
21:10something new so we Peak both the
21:13interest of the influencers who could
21:15sell tickets as well as the investors
21:17who were intrigued by missing out on you
21:19know back in Coachella a number of years
21:20prior at this point were you involved in
21:23any criminal activity or doing anything
21:26that was let's just say bending the
21:28rules in a way with this uh magnesis
21:31card we were already starting to you
21:35know cut Corners let's say to be
21:37generous it started happening very
21:39quickly after the festival got announced
21:42and I think like deep down I knew that I
21:45didn't have enough money to actually
21:47execute this Festival so subconsciously
21:49I started trying to pull money from
21:50wherever it was and I started over
21:53exaggerating the number of customers
21:54Magnus has had I over exaggerated how
21:57much you know backing fire had or what
21:59her Revenue was and it was this
22:01Whirlwind period of four to six months
22:03where I felt like my entire existence
22:06was based on the success of fire in the
22:09fire festival and for lack of it or
22:11terms I was lost in the sauce of the
22:13entertainment world as well too where I
22:15had the Who's Who coming to the island
22:16every other weekend and felt that it'd
22:18keep upping those experiences and it
22:21just like totally lost you know sight of
22:23reality and lost my ethics more
22:25importantly
22:25you got high on your own Supply yep you
22:29you you realized hey this I mean when
22:32that video came out it took over it went
22:34viral it took over the entire I saw it
22:37and I was like maybe I want to go to
22:38that it looks pretty good an island
22:40music wow sounds like a great party I
22:43like a good party uh so you did capture
22:45the world's attention you did have all
22:48these influencers who you paid to
22:49promote it and you had artists so you
22:52got you got a little excited but then
22:54you knew you couldn't pull it off and
22:56now the great charade the cover-up
22:59starts to happen is that the sort of
23:02um how you've
23:04I reconciled this in your mind that that
23:06was the the moment at which you tried to
23:09keep up this farce yeah I think that the
23:11narrative that I believed was that no
23:14matter what the costs are of anything
23:16today we are leveling up at such a fast
23:18rate that today's dollar amount doesn't
23:20matter so you know let's say we're a
23:23million dollars in the hole today oh it
23:24doesn't matter because next week our
23:25company is going to be worth 2x so
23:27what's a million dollars and it kept
23:29getting to the point where the numbers
23:30kept getting bigger and the hall kept
23:32getting deeper and it got to the point
23:33where it just wasn't practical to dig
23:35ourselves out of that hole and sure
23:38having the trust of investors for five
23:40or six years you know they'll happily
23:41give me an extra million dollars or even
23:43five million dollars but when it got to
23:4415 20 25 30 I started reaching the
23:48limits of you know what was feasible for
23:50a lot of these investors and just push
23:52people past their comfort zone and that
23:54was like my true violation and you had
23:57no experience running a large-scale
23:59event oh zero had no idea what I was
24:01doing and so there's also a certain uh
24:05naivete which we in the industry
24:07celebrate sometimes we say listen if you
24:10want to create Airbnb or Uber if you
24:12hire somebody who owns a taxi company
24:14already or owns medallions or you hire
24:16somebody who runs a hotel
24:17that's a bad idea because you're not
24:20going to come to it with fresh eyes on
24:22the problem they're going to have some
24:24sacred cows they're not going to think
24:25innovatively but here
24:27um doing some basic level research on
24:30how to run a music festival or how to
24:32transport people to a remote island you
24:34had neglected to do any of that
24:36diligence
24:37I think you should after you fired the
24:39starters pistol
24:41yes I think very good point there I
24:43think there's two distinct skill sets
24:44like one is the work that you need to do
24:46to get on base right I think like our
24:49video got us on base and if I was
24:51smarter I would have realized okay we
24:53are on base now it's no longer time to
24:56keep tethering the line of like what's
24:58acceptable now is the time to get real
25:00help we did a video we came together in
25:02a way that most established festivals
25:04probably wouldn't have taken that risk
25:05and now we've done that and we're still
25:07alive okay let's pause let's call the
25:09investors who are supporting us and be
25:11like guys four months is Not Practical I
25:14need help what can we do to make this
25:15Vision a reality and I just didn't have
25:18I didn't have the confidence to to make
25:20that decision I think like
25:22me trying to appease people ended up
25:24hurting them in the long term
25:25you gave Yourself four months to pull
25:27this whole thing together yes that's an
25:30incredibly stupid decision in hindsight
25:32ridiculous it's terrible
25:36okay in the early days of a startup you
25:39need to be focused on your product and
25:41your customers right you build a team
25:43you build a product and then you Embrace
25:46a customer base and try to Delight them
25:48but we can't forget about getting your
25:51accounting dialed in I see so many
25:53accounting horror stories people are
25:54doing cash-based accounting versus
25:56accrual based accounting they're
25:58forgetting to do their tax returns maybe
26:00they're like taking a draw and not
26:02paying proper payroll taxes gosh you can
26:06make so many mistakes and these mistakes
26:07can be really damaging when you go to
26:09raise money down the road or you get hit
26:11with penalties because you didn't do
26:13things properly well there's good news
26:15pilot is an amazing service that
26:18provides you all the accounting CFO and
26:20tax services you need and they're
26:22focused on startups like you any
26:24problems you're going to have Pilots
26:25seen it 100 times so they're going to
26:27get your books tight from the start and
26:29some big news Pilot's annual virtual
26:32founder conference is happening on June
26:348th and I'd love to have you join M the
26:37vibe is a hundred percent about
26:39actionable concrete advice from season
26:41operators and investors and this stuff
26:43is really designed to help you run your
26:44startup perfectly and they have an
26:46amazing speaker lineup folks subscribe
26:48Mercury and Sequoia are all coming so go
26:50to pilot.com Summit you want to get 20
26:52off your first six months at Pilot yeah
26:55very easy go to pilot.com twist so
26:57pilot.com Summit
26:59for their Summit pilot.com twist to get
27:0220 off the first six months
27:07I asked us not in a uh in sincere way
27:10but in a way to maybe help people who
27:13are other Founders listening have you
27:15ever been diagnosed with a mental
27:17illness or a substance abuse problem
27:20you know by during this time
27:24no I think I think one of the hardest
27:26things to believe to almost every
27:28podcast I've gone on is like I've never
27:30done drugs I think I've smoked weed like
27:3210 times in my life but never had any
27:33other drug
27:34never drank coffee in time with the jail
27:36so it's like and it was just nobody and
27:39I suppose coffee in jail not too great
27:42but you were not high or you don't have
27:47you ever been have you ever you know you
27:49did some therapy in uh in prison uh I
27:51guess and yeah did they ever diagnose
27:53you and say Hey listen you have some
27:56sort of borderline personality disorder
27:57you have a manic disorder because it it
27:59reminds me of friends I have who do have
28:02uh some manic behavior it you you in
28:06addition to your charisma I do wonder if
28:09you have a little bit of mania to you uh
28:12or if maybe you're just had a moment of
28:14delusion uh delusions of grandeur there
28:16so
28:18what are your thoughts I think it's a
28:19good question and I guess to directly
28:21answer I've not been you know diagnosed
28:23with any mental disorder I think one
28:25thing I've noticed just in the change of
28:27behavior on pre-jail and post jail is
28:30that I think the highs and lows now are
28:33way more centered than they were before
28:35I think I had that moment where it's
28:37like I can pull off the world in four
28:39months and you know get really excited
28:41and then like when things go bad they're
28:43like a negative 10 on the scale and I
28:45think like my post jail thing is nothing
28:47is as good as it seems and nothing is as
28:49bad as it seems so I think I'm a little
28:51bit more boring now and more measured
28:53but I certainly you know fell this into
28:55that trap whether it was mental disease
28:57or a period of delusion I'm not sure
28:59what it was but I think like I recognize
29:01what the traits of that were and you
29:03started collecting
29:05um you started selling tickets and from
29:08fans is it in the first 48 Hours how
29:10many tickets were sold what was the pace
29:12of the money coming in from the people
29:14who wanted to come to the festival I'm
29:16curious
29:17what kicked everything off was this
29:19orange tile and our idea was we called
29:21it the fire 400 where we had 400 people
29:24we really wanted to attend the festival
29:26all post this orange square and
29:28Instagram at the exact same time the
29:31concept was they weren't seemingly
29:33related it might have been an NFL
29:35athlete a comedian a model a musician
29:38who didn't really know each other so if
29:40you're your average fan scrolling
29:41through your Instagram feed you're like
29:43why are all these people posting an
29:44orange tile and there was nothing about
29:46fire on the tile you had to kind of
29:47Click through their bios and see the
29:49link so we created this like
29:51confusion as to like what was happening
29:53why the orange was taking over and we've
29:56launched the video we launched the
29:57orange tile and I had brought 15 of the
29:59bigger talent to the island is to make
30:01sure they did it and like to literally
30:02cut them all in one room and said like
30:03all right guys like here's what we're
30:04gonna post we posted it and nothing
30:06happened and I hit that low point where
30:08it's like went all on this video I went
30:10to bed all depressed and then I remember
30:12waking you up you know a handful of
30:13hours later in the morning like we sold
30:15thousands of tickets like how can we fit
30:17these people here so it was just like
30:18thousands of tickets millions of dollars
30:21worth of tickets came in yes literally
30:23overnight and it was this weird lag
30:25where nothing happened for a couple of
30:27hours sure people were trying to
30:28understand what it all meant and then
30:30all it took was a couple people like
30:31figuring it out recreating their own
30:34content about what they thought was
30:35happening and waking up to what became
30:38four months of Hell to try to pull this
30:40off
30:41did you have a board of directors at
30:44your company at the time
30:45board meetings I I uh I had a board of
30:49directors and a lot of them were by
30:50backers my previous company so they had
30:52seen you know we operate for three or
30:54four years and
30:56I certainly had a leash and I abused
30:58that leash and you know pushed things
31:00off pushed off oversight and basically
31:02said don't worry guys I got this and
31:04pushed away the help that I obviously
31:07needed so you had built up massive
31:10credibility with your board of directors
31:13so they trusted you you violated that
31:15trust yes um if you and this is a tough
31:18question to ask but if you had just said
31:20you know what
31:22uh to everybody who bought tickets we're
31:24going to refund your money if you want
31:27or we're going to set this for Q4 of
31:30next year because there's been so much
31:33demand it's gotten so much bigger
31:35but you have your reservation and uh
31:37this will be uh this will be 14 months
31:39from now I'm adding 10 months to
31:41schedule just because demand was so
31:42great go ahead what do you think would
31:44have happened and did you consider that
31:46or did anybody pull you aside and say
31:48hey Bill
31:51four months not enough but you got the
31:53money in the bank maybe 20 will ask for
31:55a refund the rest it's probably going to
31:56create more demand if you say because of
31:59overwhelming demand we're going to do
32:00this in 14 months did those
32:02conversations or thoughts
32:04ever come into your head they did and
32:07like obviously I would do anything now
32:09to go back and have listened to those
32:11people I think they were and I didn't
32:13don't know why I didn't know why I
32:14didn't listen I think like Looking Back
32:16Now
32:16I think I secretly knew four months was
32:18impossible and I was gonna kind of die
32:20in The Sword and try to make it happen
32:22and I believe that I'd oversold
32:24something that wasn't practical so my
32:27only chance at making it practical was
32:29to just like create this you know vision
32:31of reality and make it happen and I was
32:34afraid to show any kinks in the armor
32:36and I thought that if I postponed it 10
32:38months or a year which would have been
32:40the right move that people would have
32:41started asking questions that I couldn't
32:42enter so I think like my insecurity
32:45stopped me from making what was the
32:47obvious business call to anybody to any
32:49kind of operational experience
32:52yeah I mean if we had any kind of
32:54relationship if I was on your board I
32:56would have said Okay
32:58um tell me about the toilets
33:01yeah and how are you gonna get toilets
33:03there and who is responsible on the team
33:05for making sure five was it five
33:08thousand people ultimately yes
33:115 000 people got to use the loo four
33:13times a day it's twenty thousand flushes
33:15tell me about twenty thousand flushes
33:16how many do you need you wouldn't have
33:18been able to answer that question would
33:20you no
33:21and then I would have said uh there is
33:24there running water on this island and
33:27in this location
33:28and what would the answer have been uh
33:31no okay is there electricity and uh how
33:34much electricity is there on this island
33:36would you have been able to answer that
33:38question
33:39so I think I at that point no and I
33:41think what I was doing and it was like
33:43so silly is that okay say you you
33:45brought up one problem electricity and I
33:47would go find a way and like get
33:49electricity there in three days and
33:50bring you there and show it to you and
33:51be like look this is impossible three
33:53days ago and now we pulled it off okay
33:55the idea was I kept climbing like one
33:57Boulder that I shouldn't have been able
33:58to climb not realizing there's an entire
34:01Mountain so sure I can pull off 12
34:02miracles but I can't pull off you know 2
34:04000 Miracles and that was like the
34:06entire issue oh Jason you don't believe
34:08I can get power like let me show you and
34:10then I'd find somebody to do it but it
34:11didn't matter because there was so much
34:13else that needed to happen which I'm
34:15just gonna point out for the audience
34:16here
34:17is absolutely delightful
34:20for an investor
34:22to have that moment with a founder
34:25when you say hey
34:28you know hey getting electricity there
34:30and you're like you're not going to
34:31believe this
34:32but I call this company
34:34and they have the generators they also
34:36have solar and they have battery packs
34:38and
34:40I gave them 10 grand they put them there
34:42look we already have enough for 500
34:45people and I did that in 24 hours
34:48I got 120 days to get the other 4 500
34:51people electricity we can get this done
34:52this is not rocket science now you have
34:55that dialogue with me I'm like all right
34:56let's move on to the next issue let's
34:57talk about bathrooms and so what you're
35:00saying is
35:01you got lucky on four or five or six of
35:04these in other words you're not a great
35:07rock climber you're not Alex Arnold
35:08whatever that kid's name is who goes up
35:10without a rope but you make it a third
35:12of the way up El Cap
35:14and now you think I can climb this whole
35:17thing without a rope
35:19but you actually didn't have the skill
35:20to do that you you actually look back on
35:22and go oh I got some early wins and that
35:25deluded me into thinking I would just be
35:26able to thread the needle is that
35:28correct
35:29correct and like there it's time to if I
35:32had two years maybe I could have figured
35:34it out but I think there's also a deeper
35:35issue where I was at this point where I
35:37was starting to take shortcuts I was
35:39getting distracted by the attention of
35:42the celebrity world and I was attracting
35:44people who also desired those things who
35:47wanted to click money who wanted quick
35:49Fame and I wasn't building the proper
35:51team I was hiring other young people who
35:54wanted shortcuts so it was like me and
35:57that's all my fault because as the CEO
35:59very like her entire job at this level
36:01is hiring when he raised tens of
36:02millions of dollars and whatever Vision
36:03we were in so I was hiring a bunch of
36:05kids who wanted the theme shortcut as me
36:07but didn't have the ability to pull off
36:10the Small Miracles so it was like
36:12basically just me trying to climb a
36:13mountain with a thousand people cheering
36:15me on and me not understanding that my
36:18downfalls at that point were attracting
36:20other you know bad people too so it was
36:22a mess you know we call this DIY
36:24syndrome and DIY do it yourself is a
36:27skill set for Founders and you were
36:30rewarded early in your career so I can
36:32actually
36:33who knows like maybe you're a complete
36:35sociopath and you're snowing me on this
36:36interview but I'll put that aside
36:38because probably some people are
36:39thinking that right now we'll get to
36:40that at the end like is this all a put
36:42on but knowing what I know about
36:45entrepreneurship and the specifically
36:46hacking culture I was a did some hacking
36:49and phone freaking and you know and
36:51breaking into I should say breaking into
36:52I will just say exploring online
36:54services when I was younger exploring
36:57this year we were exploring things that
36:59you know people maybe had used the
37:00password password on or yeah uh first
37:04name understand the world that's their
37:05password or their dog's name so
37:07um what hackers do sometimes is uh they
37:11figure out how to hack things together
37:12and that is a huge dopamine Rush when
37:16you're able to hack something together
37:18and you came up with this brilliant you
37:21know fire tiles you came up with this
37:23brilliant uh location uh which has
37:26limitations but it was also quite
37:28captivating on the video you figured out
37:30so many things then you hire people who
37:32are not bar raisers they're actually
37:35completely inexperienced and now they're
37:37a liability because you don't have time
37:39when you're short on time you need
37:41people who are bar raisers you need
37:42somebody who did Coachella who worked at
37:44Coachella and saw Coachella fell these
37:47three ways so they can tell you like hey
37:48don't take this turn at 100 miles an
37:50hour you'll flip the car and then that's
37:53just another massive strategic strategic
37:56era
37:57um but
37:59we've seen a lot of entrepreneurs who
38:01DIY it change the world we've seen
38:04people who cut Corners
38:06um make mistakes but there's time to
38:08correct the mistakes so I don't think
38:10actually the strategy of hiring young
38:13inexperienced people and trying to
38:15figure out things in a new way is bad
38:18unless you happen to be making a blood
38:20testing machine managing people's money
38:22or you're going to fly them halfway
38:24around the world and charge them ten
38:27thousand dollars for a tent and a slice
38:28of cheese or whatever that famous photo
38:30was for a sandwich yeah like there when
38:33people get hurt uh financially or their
38:37health or whatever the stakes are that's
38:38when you get yourself in a little bit of
38:40trouble I think you know I'm trying to
38:42parse here what are what are good
38:44entrepreneurial lessons there are some
38:46things that you did if I'm being honest
38:47that are great entrepreneurial
38:49achievements
38:51your ability to hire great people and
38:54listen to them was your downfall
38:56as well as
38:58you know just abusing the trust of these
39:00investors as far as I can tell
39:02yeah I think the the trust issue is is
39:04what hit me alive when it most mattered
39:06and I think both like selfishly and in
39:10every other way because like selfish
39:11when you're alone and you just need that
39:13human interaction and you've severed
39:16ninety percent of the relationship
39:17you've had like you just feel alone that
39:19sucks and you start like realizing like
39:21how could I not feel alone and like wait
39:22why do I feel alone you start analyzing
39:24the situation
39:28okay everybody are you sore and tired ah
39:32it's hard to keep this Peak Performance
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39:54and ah oh I feel so good takes out all
39:57those knots loosens my muscles and
39:59generally it's gonna make you feel good
40:00throughout the day hyper Revolt comes
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40:46or more sincerely my wife got me into
40:48this and then all of a sudden they
40:50showed up to be partners on this program
40:51I was like I use that product what so
40:54it's amazing you're gonna love it
40:58get out of get out of jail two years
41:00early they let you out for good behavior
41:02or covid how'd you get out early so
41:04um Everybody in the federal system gets
41:0615 of their time off it's called a you
41:09know good time so six years becomes five
41:11and then there was Trump passed a bill
41:14at the end of 18 called the first step
41:17Act
41:18and that essentially allowed non-violent
41:20offenders to earn up to one year off
41:22their sentence for doing programs in
41:24jail so I I earned a year off through
41:27you know basic jail programs and classes
41:32take me to
41:34uh what do they call the day when you
41:37leave prison your wake up it's like you
41:38got 10 days and a wake up that's how
41:40they say it in the military what do they
41:41say in prison for the day you get
41:42released
41:45I had five months of halfway house slash
41:49home confinement at the end so my last
41:51facility was outside of Detroit in
41:53Michigan and my family you know flew in
41:55rented a car and picked me up to bring
41:57me to the Brooklyn halfway house so it
41:59wasn't quite free yet and it was like
42:00the 12 hours question right or whatever
42:02it was to but you're in prison but
42:04you're out of prison and
42:06at that point so many things have gone
42:08wrong in jail it's keep getting in
42:09trouble I'm in solitary confinement I'm
42:11getting transferred you know across the
42:12country to worse and worse prisons I
42:14just kept thinking that there would be
42:16some player like hey Billy this is a
42:18joke like back to your cell so I
42:20literally did not believe it was real
42:21until I have my mesh bag over my
42:23shoulder in the parking lot like running
42:25towards the rental car and I was just
42:27convinced there'd be somebody there
42:29saying ah get back like you're not going
42:31so you had a fear that hey it's not
42:34gonna actually happen but take me to the
42:36moment you're walking
42:38I guess there's this moment we see in
42:40movies where they're handing you back
42:41your watch and your keys and you're
42:43putting on civilian clothes is that
42:44literally what happens and they give you
42:45100 bucks for a sandwich and a bus ride
42:47I think I had like 17 left in my
42:50commissary account they've been on a
42:51debit card and I'm in my prison gray
42:54sweat pants and sweatshirts with all my
42:55belongings which were essentially
42:57journal entries I'd written for four
42:59years over my shoulder and ran to the
43:01car and wanted to spend you know the
43:04first five or six hours talking with my
43:06family and then my next like need after
43:08that was getting back on the phone it's
43:10like reconnecting with friends who
43:12hadn't seen and heard from in years
43:13what's it like to see your parents after
43:15all that because you obviously you must
43:18feel some shame or feel bad for the fact
43:21that hey they're promising son
43:24uh from Shore Hills
43:26uh who were they were so proud of it was
43:29a great hacker and had to spray and
43:31raise money
43:32how do you how do you deal with that
43:35relationship with the parents so it
43:37sounds cliche but it's totally true that
43:39the punishment is worse on the family
43:41than it is on you I think anybody's
43:43probably gone through something
43:44traumatic themselves would probably
43:46agree with that and when you're going
43:48through something really bad you at
43:49least know what's happening in real time
43:51but your family doesn't know what's
43:53happening in real time I think it's like
43:55human condition to assume the worst so
43:57for four years they're assuming the
43:59worst is happening whether it's getting
44:00raped you're getting killed or spending
44:02your life in jail and while it seems
44:04silly like now looking back that's where
44:06their mind goes so
44:08you just like trust me 100 of people who
44:10are listening to his interview are
44:11thinking that were you raped or beaten
44:13in jail you're like considered this like
44:16white white collar criminal you're
44:17highly notable what was it like were
44:21people gunning for you or did people
44:23want to be Pals with you because you had
44:26a little micro celebrity and
44:28listen you're not a murdering isn't
44:30child abusing person uh or you didn't
44:33kill a woman all those things that they
44:35will kill you for in prison yeah
44:37so did people embrace you or did I'd be
44:40unrolled I think really helped is that
44:42like a lot of people go to jail they try
44:44to make money in jail and my entire rule
44:46was all my entrepreneurial Pursuits will
44:49be stuff that happens outside of jail
44:51and I'm not going to make a single
44:53dollar off anybody in prison so whether
44:56it's cooking for them or cleaning for
44:57them or cutting hair like I'm not going
44:59to do anything I'm not that allows me to
45:01charge anybody so I stayed out of the
45:03way at people's hustles as they called
45:05it which I think really helped they also
45:07think which is interesting is that the
45:08people who are leading gangs while on
45:11paper are bad people doing bad things
45:14some of them if they had different
45:15exposure they would be leaders in
45:17different sense
45:18what I'm trying to say is like they sent
45:20the opportunity and at the end of the
45:22day if you know you are in a gang in
45:24Detroit and never left Detroit and
45:26you're meeting someone who's you know
45:27done something in meteor entertainment I
45:29can provide a level of exposure possibly
45:31one day that they don't have so I felt
45:32like the higher ups in the underground
45:35prison culture saw potential opportunity
45:38post jail so generally people were you
45:41know fair I would say ah so they were
45:44like oh this could be a this is a
45:46connection for me this is like a
45:48networking opportunity that I that could
45:50level me up so you you kind of got
45:52looked after in prison or you were able
45:55to buy some protection essentially it's
45:57basically like you know a guy who leads
45:59the gang is like wait now I can know
46:00someone in New York and like maybe we
46:01can like you know maybe you can
46:03introduce me to someone in music one day
46:04like I don't know how to do that and
46:06it's like that was an opportunity I
46:08think for for some of the more like
46:09ambitious people who were there so yeah
46:12generally met a couple of like closer
46:14friends and luckily did not have any
46:16physical issues it was more just like
46:17the mental you know
46:20ties from family
46:21so the month leading up to the fire
46:24Festival like 30 days out
46:27at some point you realize you're not
46:28going to pull this off so at four months
46:31you're diluting yourself you're climbing
46:33lcap without a rope
46:35going spectacularly you feel like your
46:37Midas Everything You Touch turns to gold
46:40celebrities money pouring in yeah you're
46:43breaking the rules you're lying you're
46:45fraught you're committing fraud but
46:47things are check boxes are getting
46:49checked
46:50at what point did you realize I'm not
46:52pulling this off how many days out was
46:54it when you realized no chance I think
46:56this makes me look worse but I truly did
46:58not know we were screwing until the
47:00night before the festival and the last
47:02the last 30 days for the worst 30 days
47:04of my life we had a system called The
47:07Daily urgent payment sheet and I had a
47:09full-time employee it would assemble all
47:11the vendors who had invoiced us and sort
47:13them based on urgency and like the least
47:16level of urgency was like extreme urgent
47:18and like the highest level was like
47:19we're all gonna die if we don't pay this
47:21you know by tomorrow
47:22and I'd wake up every morning and have
47:24until two o'clock to raise that dollar
47:27figure in so we can get the wires out by
47:28the four o'clock deadline so some days
47:30it was undergrad and some days it was
47:32three million dollars and basically I
47:33lived 30 days were essentially raised
47:35the equivalent of a small seed round
47:37five days a week and that was just the
47:40worst period so literally every day
47:41you're raising a half million yeah it
47:43could have been like seven days 100
47:44Grand and some days there's a couple
47:45million dollars and like anything in
47:46between and it was when you interpret
47:48your prowess at raising money
47:50your ability to get people to give you
47:53money what what do you think the key is
47:55to getting people to wire you money
47:57for your crazy Festival why do people in
48:01your mind do it and then what what did
48:02you exploit when you look back on it to
48:05get them to make those wires so I think
48:07I was beyond the lies which were
48:09unforgivable I think I was very good at
48:12giving people access to something
48:14outside of the ordinary and
48:16whether that was an island whether that
48:19was a finance guy meeting you know a
48:21media Mogul or a media Mogul meeting the
48:23fashion Mogul so I think a lot of the
48:25investors were buying into either the
48:26experience or to have a seat around the
48:29table and it really struck me and like
48:31for better or worse like I utilized that
48:33and struck me a couple weeks before the
48:35festival when one investor who is a huge
48:38name in his career but is all in in one
48:41industry and you know has in my mind a
48:43limited money and limited access limited
48:45resources he sits down to me and goes
48:47like hey Billy can you help me meet
48:48these people I'm like I'm looking up at
48:49him like this guy's a billionaire like
48:51why does he need some 25 year old to
48:53make introductions is it public who that
48:54person is can you say uh it's not public
48:56who he is but he's he's someone that you
48:59know most listeners will probably have
49:00heard of and a finance person
49:02yeah like a Wall Street not a venture
49:05capitalist no he runs a hedge fund and
49:06it doesn't do Tech investing it's a you
49:09know it's it's traditional fine
49:10intention I'm like wow like this
49:12person's getting beyond the couple
49:14million dollars you know he invested
49:16he's getting value out of having the
49:18seat around the table so I think it all
49:20kind of came down to providing these
49:22experiences where like you know this guy
49:23works 90 hours a week he goes between
49:25his you know office building that he
49:26owns and his townhouse that he owns and
49:28now he can come to this island and meet
49:29all these people I think there was there
49:31was like value in that for a lot of the
49:33investors what you learned uh is you
49:36built an incredible Network and you
49:38learned that the person who throws the
49:40party and that people covet affiliation
49:44and access and I can tell you this is
49:47incredibly powerful
49:49not to make it about me but I did this
49:51my whole life I threw events I hosted
49:53dinner parties I had launch festival and
49:56Gadget would have events all in Summit
49:58uh my angel assignment I've always
50:01brought people together because if you
50:02bring people together introduce them
50:03they always remember hey who introduced
50:06you know this person to this person like
50:08oh that was Jake out we had dinner one
50:09night and that currency uh
50:14led to an article in the New Yorker that
50:16was written about me named the connector
50:17because I was so famous in the 90s for
50:20connecting people when you were 10 years
50:21old and you just happened to use that
50:23superpower on a project uh that didn't
50:27work out and uh to do
50:30criminals uh felonious I guess is the
50:32word activities
50:34but again you you had a lot of great
50:38entrepreneurial skill and you just chose
50:40the dark path let's talk about today how
50:44do we know
50:45that the Billy McFarland 2.0 we're
50:48talking to here on the program
50:49it's not a complete other social utter
50:52sociopathic individual who is not trying
50:55to raise money but is
50:57you know basically doing this all over
50:59again because you want to do fire
51:00Festival too so how do we know no you're
51:02sincere how do we know that you've you
51:05know if listen we've been talking for 40
51:07minutes here on this podcast I I don't
51:09know if you're sincere if you're
51:13actually going to do fire Festival too
51:15uh for the right reasons and try to make
51:17this happen or if this is all a put on
51:19and you learned the wrong lessons in
51:22prison and now you're just an you're a
51:24criminal mastermind and you're Alex
51:25Luther right now how do we know
51:28so I think what makes my actually crime
51:30from five six years ago more heinous but
51:33also as eye-opening is at this Detroit
51:35prison there were very few people there
51:37for financial crimes there is a Harvard
51:39guy who's in finance who had you know
51:41similar dollar figures to me similar
51:43sentence lengths of millions yes and
51:46like he was the guy had the World by the
51:48balls and you know at a higher scale
51:50than me we're walking on the track and
51:51he just goes to me look at all these
51:53idiots how are we here and I'm like I
51:55kind of like don't say anything but like
51:56stop and look at him it's like
51:58the majority of the guys there don't
52:00know anybody in their life who hadn't
52:01gone to jail and both of us didn't know
52:03one person who had gone to jail it's
52:05like no like we are the idiots right we
52:06get every opportunity and sure we might
52:09not have
52:10stolen 10 million dollars you might have
52:12just been like a regular person but we
52:13had every opportunity in the world to
52:15not be here and they had zero
52:17opportunities to not come here for the
52:18most part so it's like I think that made
52:20the actions more heinous and I know I'm
52:22just like talking down on myself now but
52:23that was kind of a one of the
52:25eye-opening experiences that it's like
52:28look at the exposure and the access we
52:30have and the opportunities we have and
52:31For Better or Worse the attention in the
52:34storyline of fire Festival too just
52:36opens an incredible number of doors for
52:38me and I'm just like lucky to have a
52:40chance to do the right thing here I know
52:42there are 50 000 guys coming out of jail
52:44this year with no work prospects and the
52:47fact that I could email someone or get
52:49my phone calls picked up and I have a
52:50chance to work and do right with it it's
52:52something that I don't take lightly
52:54so you're going to do fire Festival too
52:57not on the same island I hope
52:59uh or are you planning on doing in the
53:01same location yes I think overall it's
53:03like I need to pay everybody back and I
53:06still need to do something incredible
53:07while doing that I've just been like
53:09doing a lot of marketing work for
53:11venture-backed startups as a way to get
53:13the lights on doing a ton of Media stuff
53:15consultant right now Consulting you're a
53:17marketing consultant yeah marketing
53:19consultant halftime other half time and
53:20filming a number of TV shows working on
53:22you know a movie project and throughout
53:26all these media projects I've been
53:28pitched on every iteration of a fire
53:30Festival from a local nightclub to
53:33making it a Broadway musical to a
53:36sovereign wealth fund that I'm sure that
53:38you're familiar with and it's been
53:40really interesting to see all these
53:42partners and see all these deals and I
53:43think for me it's like how can I use
53:45what I'm good at which I believe I'm
53:46good at marketing and I believe I'm good
53:48at bringing people from different worlds
53:49together through experiences and just do
53:51that and find Partners to make
53:53everything else a reality so any kind of
53:56iteration of fire Festival too whether
53:57it's a Broadway musical or whether it's
53:59a festival in each somewhere will be
54:01fully executed by a partner who
54:03specializes in that and I'm just going
54:05to live and breathe the marketing and
54:07bringing people together to what do you
54:09charge as a marketing what do you charge
54:11as a marketing uh consultant
54:13literally I'm totally hacking Bare Bones
54:16I have a calendly link where I charge
54:17each ten dollars an hour so yeah how
54:20much an hour 1800 1800 an hour to get a
54:24billy McFarland idea for your startup
54:26and people have paid this pays my
54:29content team and pays pays my office
54:31rent pace and restitution so so you're
54:33literally have had people pay this 1800
54:35bucks and yeah uh you've just riff with
54:38them on ideas yeah I'm not I'm not doing
54:41crazy I'm doing anywhere between like 70
54:43and 120k a month since they got out of
54:44jail and like
54:46business expenses of course so you're
54:48making a million dollars a year as a
54:50marketing consultant yeah and then you
54:53have employees and salaries and
54:54volleyball so it's like it's not yeah
54:56not not living the high life and
54:57restitution's killing me so
55:00does that work
55:01restitution percentage of all my all my
55:03personal income go through rest Edition
55:04so you know
55:07it actually varies based on how it's
55:09earned
55:10um if it's basically if it's like a
55:12travel opportunity it's pretty much all
55:13of it if it's like summer thing I don't
55:15have to travel and it's like less of it
55:17but and I'm just trying to find a
55:18Cadence like with you know the system
55:20too to make it fair so I can survive you
55:23know pay my team but also pay back to 30
55:2540 of whatever you make something like
55:27that it's just a barriers to depending
55:28on the opportunity and the issue is like
55:30it's not it's not tax deductible so like
55:3240 restitution is really like 80 of your
55:34income
55:36so and the hill you have to climb for
55:39restitution is how big
55:40uh it's 27 ish million
55:44so and yeah and I think like
55:47let's say it's not going to happen by
55:49doing calendar Consulting calls and I
55:50think like if I can pay back every three
55:52or four weeks give a check that's a
55:54really great step but it's going to take
55:56you know owning a business and and doing
55:58that properly this is a 10 15 year
56:00Journey
56:01and you're committed to making sure
56:02everybody gets every dollar back yeah it
56:04needs to happen like I can't stop until
56:06it happens I think the hardest part for
56:08me Jason like this is so crazy it's like
56:10whenever I try to work and people are
56:11like how can you be allowed to work
56:13unless you pay people back and
56:15unfortunately I don't have 27 million
56:17dollars under my mattress I'm like I
56:19came out of jail my family gave me 200
56:21in a Timberland wallet and said you know
56:23good luck so right I literally started
56:25from started from ground zero here so I
56:27think I paid back close to 40K now in
56:29eight months and like it's something but
56:31it's not enough and I understand that
56:32it's just gonna take time and so there
56:35is some mechanism for this in the world
56:37for you to pay that restitution you just
56:39send it to a bank account somewhere
56:40there's a some auditor or some
56:43accountant who manages this restitution
56:45and then the people who you owe money to
56:47are in some order uh and they get paid
56:50back or they or they each get Pennies on
56:52the dollar every couple years
56:55so every 30 days I disclose all my
56:57finances like all my accounts every
56:59dollar where it came from and like what
57:02all our revenue is and then I was
57:04literally going to the southern district
57:05of Manhattan's Courthouse every three
57:07weeks and giving the physical check but
57:09I finally got set up online so I can I
57:11can send it by ACH now oh it was sdny is
57:14who pinched it yeah yeah so literally
57:17was physically they're like the hardcore
57:21prosecutors in the country yep they
57:24don't play games no and I think my case
57:26was super easy no matter who took it
57:28right I was like I was black and white
57:29guilty there was there was nothing there
57:30was nothing to fight did you wind up uh
57:33uh just settling and just uh doing a
57:37deal you did a deal right I think I took
57:39a plea deal yeah yeah took a plea deal
57:40and then you have to do that attestation
57:42where you just tell them everything
57:47wow yeah uh well I think the way to
57:51judge you is you know how much you pay
57:54back over what period of time and how
57:56serious this is
57:57um you know what you did is terrible but
58:00you seem to be owning it uh it's a
58:02little crazy to do the fire Festival
58:04again I understand the media
58:06opportunities you must get paid to speak
58:08at stuff and sure uh and doing
58:10consulting works it's a little crazy to
58:12do a fire Festival again
58:14but that is the asset you have is
58:16notoriety and the name fire Festival
58:19so if you were to pull off one that was
58:21modest but made a million dollars or a
58:23half million dollars and it went to
58:25restitution and it became a thing
58:27fate loves irony and it would certainly
58:29be quite paradoxical for fire Festival
58:32too to be awesome
58:34uh and for you to pay everybody back so
58:38um I I was really struggling with having
58:41you on the podcast I think this is been
58:43useful for everybody who listens and um
58:47you know I wish you luck in paying
58:49everybody back and I hope you learned
58:51the hard lessons and I hope
58:53you know there you want to think there's
58:55a path for people to come back when they
58:58do stupid [ __ ] in the world criminal
59:00stuff and uh maybe you can be example of
59:03that and maybe that could be your legacy
59:05is just owning just how stupid this
59:08lesson was for entrepreneurs and maybe
59:09you write a book about it you know uh
59:11I'm sure you got all those things you
59:13wrote in prison but where you could
59:15really help entrepreneurs is
59:17I think which we we kind of teased out
59:19in this podcast which is unique because
59:21it's a startup podcast but we teased out
59:22what you were good at
59:24and we teased up all of those
59:26superpowers you have and then you said
59:28it yourself when walking with that
59:29douchebag from Harvard
59:32was like look at all these idiots and
59:34you had the realization that you in fact
59:36are the idiot because the
59:39entrepreneurial system is set up so a
59:41kid from Shore Hill who's just a good at
59:43executing and writing code can have
59:45unlimited opportunity
59:47and you [ __ ] it
59:49you had a clear path to success and just
59:52because you didn't have the presence of
59:55mind or mentorship where you were high
59:57on your own Supply whatever combination
59:58of things happened
1:00:00you just didn't put it off for 14 months
1:00:02or say you know what we're not going to
1:00:04pull this off I got to give you your
1:00:05money back and just be honest with
1:00:06everybody about the State of Affairs
1:00:08it's an important lesson for
1:00:09entrepreneurs
1:00:10um you know and you didn't have any
1:00:12co-founders I guess in this Enterprise
1:00:14to check you
1:00:16by yeah my co-founder was the uh was the
1:00:19rapper Ja Rule so we were you know so
1:00:21yeah The Benchmark was kind of low in
1:00:23terms of it didn't have the operational
1:00:24yeah great yeah great great salesman and
1:00:27I think we we shared some similar
1:00:28positive traits we just didn't have the
1:00:30operational experience yeah no I know no
1:00:32dick to Ja Rule I mean I'm just saying
1:00:33he wasn't the VP of Ops at square or he
1:00:37didn't work in an operational rule at uh
1:00:40it wasn't like an Ops at Salesforce for
1:00:42six years before that you know he was
1:00:43doing music festivals so in in a way it
1:00:45was almost like enabling you had just
1:00:47two people who were great sellers what's
1:00:49the relationship with Ja Rule like you
1:00:50guys talk or no we have why didn't he go
1:00:53to jail why didn't he go to jail I think
1:00:55I was definitely the one who was uh I
1:00:57was the one who was pushing you know the
1:00:59illegal financial reporting for sure so
1:01:02it was about it all right well listen
1:01:04this is important lessons for everybody
1:01:06I hope you uh did you get a book offer
1:01:09yet have you considered that yeah
1:01:11working on it I think but what's also
1:01:13interesting is I come back in 15 years
1:01:15when everybody's paid back I'd be like
1:01:17it was so hard like that's almost like
1:01:19more of a cautionary tale right like the
1:01:20last six years have been held but the
1:01:22next 15 are going to be held too and
1:01:23hopefully they'll learn more along those
1:01:25ways
1:01:26you know it sounds crazy but given your
1:01:30skill set which is undeniable in
1:01:32marketing
1:01:33now you're going to be able to think of
1:01:36a product eventually and if some number
1:01:38of people
1:01:40you know find you credible enough uh
1:01:42because of your charisma and your
1:01:44superpowers who knows maybe you build a
1:01:46100 million dollar company and you just
1:01:48give 26 million of your Equity to these
1:01:51folks and they get back double their
1:01:52money eventually and uh I wouldn't say
1:01:55all's well that ends well but at least
1:01:57those people will be made whole and
1:02:00maybe you can be an example for people
1:02:02of what not to do
1:02:03uh on their entrepreneurial Journey
1:02:05which is why I wanted to have you on
1:02:06here to see if you could actually be
1:02:08honest about the superpowers the skills
1:02:10you have and then maybe
1:02:12uh you know what what you would have
1:02:14done differently I think you did a good
1:02:15job explaining that
1:02:17having co-founders like legit
1:02:20co-founders would have solved this
1:02:21problem as well if you had two
1:02:23co-founders
1:02:24then somebody would have said you know
1:02:25what
1:02:26you would have went to the board and
1:02:27been like and this isn't going to happen
1:02:29we don't have the ability to pull this
1:02:31off and you would have had some chat but
1:02:33you know this is the problem with solo
1:02:34Founders especially you built all that
1:02:36credibility and then you you weaponized
1:02:39it against your investors and that's
1:02:40another I think thing you have to live
1:02:42with and ultimately
1:02:44uh you know I feel like
1:02:48gosh I don't know if you're sincere or a
1:02:50sociopath but I'm gonna go with my gut
1:02:52and say you're sincere and that you want
1:02:54to do this restitution uh and so I'm
1:02:57going to pick
1:02:59uh the side of uh sincerity here and I
1:03:02wish you well and I hope that you uh get
1:03:05everybody their money back and that you
1:03:07uh you learn to live with you know the
1:03:10mistakes you made so I wish you luck
1:03:11Billy McFarland yep thank you Jason
1:03:13appreciate it and uh
1:03:16for people who are going to say why did
1:03:18you give an hour to this guy and not
1:03:20another entrepreneur because maybe
1:03:22maybe there's somebody listening who's
1:03:24bending the rules right now and they are
1:03:26about to break it and I can tell you
1:03:29those four years you're not getting back
1:03:31and it does not feel good does it that
1:03:34you're not getting those back the four
1:03:35years and the 15 ahead of you after that
1:03:37it's it's not worth it and the person
1:03:39who's afraid to go for it if you fail
1:03:41honestly you're gonna be okay too so I
1:03:43think there's both the cautionary tale
1:03:45and hopefully the motivating tale from
1:03:46the person afraid to pull the trigger in
1:03:48an honest and ethical method
1:03:50all right there you have it folks some
1:03:52advice from somebody who screwed it up
1:03:54and is trying to fix it just fail
1:03:56honorably nobody has a problem failing
1:04:00honorably don't break the rules you will
1:04:03pay the price okay I will see you all
1:04:05next time on this weekend serves

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