Truth: Billy Mcfarland, Fyre Festival, Magnises, & The Real Numbers

Truth: Billy Mcfarland, Fyre Festival, Magnises, & The Real Numbers

Photo: Christian Johnston

We wrote about Magnises a few times when it was popular 3 years ago, but currently over on reddit there’s an as me anything, with one of their former employees, /r/mr_matzoball.

There’s some fascinating news that comes out of it including the real Magnises membership numbers, which if you remember from our article was quite the guessing game depending on who you would hear them from.

Turns out, they did inflate the numbers to lie to investors:

How many paying members did Magnises have? did they inflate the numbers?

Billy would go into media interviews, VC companies, (and the current board I believe) claiming that we had over anywhere between 10000 and 25000 members.

The actual number of this was closer to 4000.

Was there vibe or talk around the office that the product was bad/a fraud? Why’d you leave?

Financial fraud was pretty visible from where I was while they sold tickets to 3rd party events. Our comptroller was counting the ticket sales as earned revenue rather than accounts receivable prior to actually providing our customers the tickets themselves (big no no). At one point management was claiming $1mm in ticket revenue (despite not actually coming through on goods sold).

Operationally it was a complete disaster. Grant and Billy both told us a ticket price and a cap. He told us that the tickets came from a verified source who’d secure them below that price up to the volume cap. Billy would then send us the ticket pdfs and we’d allocate them out.

We learned that they weren’t coming from a source at all — Billy was buying them from 3rd party sites like ticketmaster and stubhub on his own personal credit cards (major laughs here when we had to purchase them on his behalf his cards consistently were declined). Jokes on him though because he’s literally drowning in debt now.

They f’d up big and owed money to our health and payroll provider Trinet, ($88k worth). Trinet cut us from the platform and dropped everyone’s health insurance (without telling us) and we lost it.

Billy acknowledged he fucked up and realized that people were unhappy. Gave us the option of a 6 week severance package (right at the end of the pay period too) but we had to make the decision in the next 2 days. The choice was pretty obvious at that point.

Wasn’t til afterwards that we realized this with the separation agreements was basically hush money. We’d have had a pretty strong case of breach of contract.

There seems to be quite a lot of reasons why Billy should be and will hopefully always be seen as a faux-entrepreneur.

[Source: I worked for Magnises and briefly for Fyre in 2015-2016… AMA!]

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Walter Marrero 228 posts

An executive analyst at an elite technology & business focused publication.

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