What marketers can learn from Theranos and the Fyre Festival
Recent documentaries about business scandals are captivating audiences. Take, for example, the behind-the-scenes looks at the infamous Fyre Festival disaster and the disgraced Theranos that have set social media ablaze with commentary and memes. Each company was founded and led by charismatic, well, liars who were convincing enough to dupe unwitting investors (and in Theranos founder Elizabeth Holmes’ case, even some former secretaries of state) out of millions of dollars. Both companies marketed themselves to fame—and then fell apart when they could no longer keep up the charades. And both are cautionary tales.
As agency leaders and as marketers, we can learn a few things from these two massive failures.
It’s OK to try
Holmes famously had this quote from Yoda emblazoned on the walls at Theranos: "Do or do not. There is no try." You know what? Yoda was wrong! There’s tons of value in trying. Trying means you are taking chances without 100 percent certainty of success. Trying means experimentation and learning. It’s the essence of innovation and of breaking new ground. Ironically, trying and testing new solutions is how medical research works, which, in hindsight, is a pretty clear indication that Holmes was in the wrong business.
There is no pre-ordained solution. You don’t have to plow ahead, no matter the costs. Goal-setting, of course, is critical to any organization’s success, but I’m more of a “measure once, cut-twice” guy than “Cortes burning the ships when he reached the New World.”
Do not problem-solve your way into an unmitigated disaster. Employees at Fyre and Theranos were repeatedly told to “figure it out” and to be “solution-oriented”—or they would be replaced. For years, Silicon Valley has held up this idea of being solution-oriented to encourage big thinking and innovation. The problems that these particular employees were raising, however, were not ones that could be figured out—they were hurdles steeped in reality versus the founders’ lofty, unrealistic vision that often defied biology and physics. It’s incredibly important to know the difference.
As marketers, too, we need to consider this when looking at how our campaigns are performing for clients. When an issue arises—perhaps, online engagement is low or consumer reaction is negative—we need to listen to what the data is telling us about a particular idea or piece of content that’s not cutting it, and adjust accordingly. This is true even if we were excited and had high hopes about that piece of content. Maybe it’s something we’ve fought for to include. Rather than find a way to make it work—perhaps by interpreting the data in a more favorable way or doubling down on media spend—we need to open ourselves up to the possibility that our first instinct was wrong. Then, we need to adapt accordingly to ensure that we are on the right path to positive results.
Align your marketing with the reality of your product
As the adage goes, nothing kills a bad product faster than great advertising—so make sure your product lives up to and can handle the marketing or PR attention that you’re seeking. Although people are critical of the influencer marketing done by the Fyre Festival, that marketing worked extremely well. If only the Fyre Festival had a truly delivered on what had been promised (e.g., gourmet fare versus the infamous cheese sandwich), those marketing efforts would have been heralded as an achievement and studied in business schools. Likewise, Holmes’ high profile on the speaking circuit as an advocate for disruption in the healthcare space helped Theranos secure massive amounts of funding and a lucrative deal with Walgreens. The marketing itself was not the issue; it’s just that it was far superior to the real products and offerings.
While these are both extreme cases, it’s important for all brands—and, in particular, start-up and DTC brands—to ensure that they are able to support the customer growth they will experience when they launch their marketing efforts. Not all born-online brands are ready to support the influx of customers that take interest in their products. Marketers need to have an understanding of how many potential customers they may reach and make sure they are prepared to support all of this interest, with adequate product inventory and stellar customer service. And if they find themselves in a situation where demand outweighs supply, or that they are not able to properly handle customer service requests, they need to be transparent about it and communicate to customers that they are working to remedy the situation.
In every situation, it’s important to remember that trying—which is experimenting, admitting failures and adapting—is always better than lying.
Jeremiah Rosen is the CEO of Sundae, an influencer marketing agency.