The Fashion Magpie Deception Digital Age

Deception in the Digital Age: Theranos, Fyre Festival, and Skulduggery.

I have been puzzling over why I — along with everyone else in the world, it seems — have been so riveted and disgusted by the story of Elizabeth Holmes and her bogus blood test business, Theranos, as well as the saga of the the Fyre Festival scandal and the two dueling documentaries covering it. If you’re late to the game, please read Bad Blood — a wild, page-turning expose on a fraudulent start-up established by a 19-year-old Stanford dropout, though I don’t think it was the best-written piece of investigative journalism I’ve ever read, and then tune into Rebecca Jarvis’ excellent podcast on the same story. They cover much the same content and draw many of the same conclusions, but the modalities are compelling in different ways. (And it’s fascinating to hear the actual people interviewed in the latter!) As for Fyre Festival, both Netflix and Hulu have released documentaries on the story of a music festival gone very wrong owing to deceit and misrepresentation at the heads of a young, hubristic entrepreneur. I think I slightly preferred the Hulu one, which has actual interviews with the “mastermind” “visionary” (heavy, heavy quotations meant to be interpreted semi-ironically) behind the festival, Billy McFarland, though viewers should take each with a grain of salt. (Consider their production crews…! More on that below.)

So — why are these stories so fascinating to me and to this cultural moment more generally? I cannot talk or read enough about either of them, though the underpinning tale is as old as time. Ponzi schemes and duplicity in business have been around since the earliest economies; there is a reason why the phrase caveat emptor exists, and in Latin. But there are a few things that I find particularly arresting about these twin narratives:

First, we have the cult of personality at play: slick, deceitful individuals who were somehow able to charm even the (presumably) savviest, best-educated of the bunch. Dignitaries like Henry Kissinger and Bill Frist were on the board of Theranos; major, respected VCs invested tens of millions of dollars into McFarland’s outfit. In both instances, bystanders remarked on the energy and attractiveness of the “visionary” entrepreneurs behind these businesses and much was made of their youthful swagger and ambition. I feel that both McFarland and Holmes were able to “trade up” on their “smart kids with a big vision” appeal when presenting themselves in front of the old, established business set, many of whom likely saw their nephews, their daughters, their godchildren in the bright and ambitious faces of Billy and Elizabeth. These were entrepreneurs who knew how to brand themselves — even moreso than their ideas! — exceptionally well to their “target market”: older investors with deep pockets. In several of the entrepreneurship programs and boot camps in which I participated, instructors advised similar strategies: especially in the early days, they claimed, it was imperative that I design and promote a personal brand to amplify and communicate my trustworthiness and vision as an entrepreneur. I remember being counseled to buy a domain with my own name, have professional pictures taken, and use that space to market myself. This always felt like window dressing to me and I preferred to use my time and resources in the development of the business itself, but — this is the day and age in which we live! Investors, customers, and the like will use the web to figure out who you are and what you’re up to. And if you don’t have a sleek presentation, well — the odds may be stacked against you. Or so I was spoon-fed.

On the one hand, this access to information is liberating. We can use the Internet to evaluate for ourselves what we think about a business or an individual. But on the other hand, this context means that new businesses (especially in the tech world) are forced to “play the game” — investing early, scarce dollars into vanity sites for their founders and sleek holding pages for their companies when the truth is that everyone would be better served if every ounce of focus could go toward the development of the earliest iterations of the product itself. And it also means that “the cult of personality” is more heavily weighted than ever, and that fraudsters like Holmes and McFarland are becoming increasingly sophisticated about marketing themselves as Steve Jobs-like visionaries to the right set of people at the right time.

In short, when I look at both of these entrepreneurs, I see very successful attempts at branding, with little substance beneath. Both knew how to align themselves with celebrity and fame, and to burnish their images carefully, fashioning their own halos.

This brings me to my next (and bigger) point, which is all about the ethics of marketing in the digital age. What has struck me powerfully in both cases is that Holmes and McFarland invested heavily in marketing, PR, and promotion before they’d ever gotten to proof of concept. Holmes hired the creative agency that had worked with Apple to help with the branding and marketing of her lab test company, purportedly for a total of $11M. $11M! $11M!!!! And they did not even have operating machines — or, they did have a few machines, but they yielded erratic test results, and only a fraction of the tests they claimed they could at that. Meanwhile, McFarland hired the marketing geniuses at FJerry essentially on a lark, with nothing but Ja Rule’s name and the vague promise of having bought an island for a music festival to show for himself. He had no background in festival design/production and the most laughably arbitrary timetable for pulling it off. In both cases, the companies spent heavily on the marketing of products that were half-baked at best. Talk about putting the cart before the horse.

How do entrepreneurs reconcile honesty and brand aspiration in advertising a new product or business? Millennials and younger in particular have certain expectations for the look and feel of products they want to use. (Older generations are far more forgiving.) There is a greater emphasis on UX and visual design among our set; many of us are digital natives and have strong preferences and expectations when it comes to encountering and adopting new technologies, tools, and the like. And so young businesses are also forced to play this game: they are driven to ensure that there is a certain amount of “gloss” to even early MVPs, which, in many cases, leads to the generation of “vaporware,” or paper-thin technologies hidden behind a sleek UX. Many startups are actively encouraged to explore this kind of product development (or at least, I was, many times, by investors and experts). The thinking is that if you put something pretty up and then see where users go (“oh, they want to access THIS button” and “interesting, they are navigating over here”), you can then build out the technology, citing user behaviors as a validator for investing in the technology development. This is “lean start-up” speak. The concept is noble (why build something users don’t want?) but the experience is deceptive. You can still see this kind of approach if you poke around on certain sites — any time you click a button and see some kind of rote reply: “experience coming soon” or “beta!”, you’re probably part of an experiment. I’ve run into this many times on sites as well-known as Rent the Runway. No disparagement to that particular business intended; I think there are legitimate use cases for testing in this way. But, the truth remains: there are a lot of smoke and mirrors in the start-up world.

There was even a kind of meta marketing gameplay going on in the Netflix/Hulu documentaries, if you think about it. FJerry — the very marketing firm that helped McFarland pull off his ruse, even though their culpability in the affair is indeterminate — was involved in the production of the Netflix film, and the lawyers filing the class action lawsuit against McFarland were involved in the production of the Hulu film. In other words, both had (heavily) vested interests in portraying the stories in a certain light. FJerry sought to exonerate itself while showcasing its dazzling marketing genius; the lawyers wanted to ensure everyone knew just how psychopathic McFarland is. And so, at the end of the day, both films are essentially marketing tools in their own right, for different purposes.

All of this to say — I am bowled over by the pageantry, deception, and showmanship across the board in all of stories. It stuns me that people think they can get away with these schemes in this day and age. Maybe (giving them the benefit of the doubt) they truly believed in the vision of their businesses and were in denial as to the extent of wrongdoing they had gotten themselves into. Maybe they felt that if they just kept pushing and were able to pull things off at the last minute, all would be righted. (A reminder that hope is not a strategy…) But they had to know — both of them — that they were dealing in dark shades of gray. In my opinion, the fact that both were so quick to engage legal counsel in such early stages of business formation to issue cease-and-desists and threaten lawsuits speaks to the depths of their discomfort with their own actions. No honest startup needs that kind of defensiveness. In fact, most entrepreneurs and folks in the Silicon Valley scene roll their eyes when they hear about start-ups operating “in stealth mode” for fear of idea theft or any kind of employee “leaking.” (All startups do, however, need some level of legal support from day one. There are so many issues, from the proper formation of a company to the provision of company shares to employees, that require technical legal expertise.)

At any rate, how is it possible that McFarland and Holmes believed that they could get away with what they were doing?! Back in the pre-Internet days, you could skip town and move across the company and you might be able to outrun your reputation. It is flat out impossible nowadays, in our digital age. How could they think they wouldn’t be caught?! The magnitude of their hubris startles and disturbs me. Were they under the misapprehension that they could do whatever they wished with no repercussion? How?! This simply does not compute. Both seem well-educated, bright, driven. How could they be missing such a critical grasp on the real world?

More to the point: these are cautionary tales against letting the tools of the digital age enable skulduggery. They have certainly made me more leery of glossy startups. As one interviewee in the Jarvis podcast notes: “Any time I see nice furniture in a startup office, I’m skeptical.” Just so. Early days at a start-up aren’t exactly sympatico with window dressing.

What are your thoughts? Have you tuned in? What stood out to you as most arresting? (I found a lot of your comments on this post on Elizabeth Holmes fascinating.)

Post Scripts.

+Finished this and downloaded this immediately after Grace mentioned that it’s the best thriller she’s read in a long, long while.

+One of the tougher posts I’ve ever written.

+New Year’s Resolution: I have been trying to completely finish my current cosmetics before investing in new products in the same category. Or, if I have a legitimate reason for wanting to spurn the old in favor of the new, I throw away (or, if feasible, give away) the old version. #MarieKondoatWork. I am nearly done with my Diorshow brow styler and am already anxious for a replacement product. It’s really good at what it’s designed to do — enable you to draw super-fine hairs into place in a believable way! — but I’ve realized I’d much prefer a tinted brow gel so that I can get the job done with a few swipes. The Dior has an uber fine point and it takes me time and effort to touch up my brows in the morning. (I finish with this $2 wunderproduct.) I’m basically in the market for a BoyBrow on steroids — I like BoyBrow but the size of the tube is diminutive and I find the formula dries up in like a week or two. I am drawn to either Eyeko (reviews!!!) or Chantecaille, the latter of which blew me away when I tested it recently in-store. I love my clear gel but this is for more of an everyday full brow look, achievable with a few swipes.

+Ordered mini a last-minute pair of these in the pastel pink (precious with those heart cut-outs!) for our trip to FL tomorrow! Thank God for Prime. I’ve been a bit of a forgetful pregnant mama…

+An elevated way to get that tie-dye trend. I’d pair with a simple white or blush button-down blouse. (Or consider this bow-front blouse — $33!)

+Still swear by almost everything here.

+I have been so drawn to lavender lately. I saw it on the Zimmermann fashion week runway earlier this week and it gave me all the feels. I love this ribbed cashmere sweater (under $150), this $30 steal, these traditional pajamas (on sale!), and these lavender-trim Vejas.

+Ordered these as a special Valentine’s Day treat for myself.

+Into the colorway of this bra — love the heathered gray against the pink straps!

+CHIC storage solution.

+Micro-queries, micro-thoughts.

17 Comments

  1. I love this article, and the comments. Thank you for writing!

    I find the topic of ethics in influencer marketing so fascinating. Mainly because there are little to none. Influencers are allowed to write about anything, are *supposed* to put #ad #spon, but do they all the time?

    I think I’ll actually be writing my MBA dissertation paper on this topic, so thank you again for sharing!

  2. My two fav brow products are the Diorshow Brow Styler and…. the Chantecaille brow gel! Tint is sheer and natural, texture is awesome, gives plenty of control and volume and it’s forgivable. You can layer and reapply without making a complete mess of things. I like It better than the other twenty or so similar brow products I’ve tried. And it lets forever without getting dry and flaky (one reason I don’t like Boy Brow as much). The only other product I’m kinda interested in trying right – just in case it’s more perfect? 🙂 – is the Tom Ford brow gel. $50 is steep but it has great reviews and I always love that line!

    1. Thanks for weighing in on this!! Sounds like you’ve done your homework, and we’ve wound up thinking about the same products. TF products are always super spend-y but the quality tends to be top-rate. Will keep that one on my radar as well! xoxo

  3. Good thoughts, all. Never underestimate the power of good marketing/advertising! When I was growing up in the ’90s, my parents subscribed me to a kids’ magazine called Zillions, which was published by Consumer Reports. It was basically all about helping kids hone the ability to see through marketing/advertising nonsense, and become less susceptible to it. Which, honestly, is pretty radical! Can you imagine that today? I can’t, but lord knows we need it these days. And this was a magazine aimed at actual children, not even teens.

    Anyways, the Bad Blood author did a Reddit AMA and someone asked him if he thought the whole thing would have gotten off the ground if she had tried to launch it in the Boston area instead, it being a big biotech hub. His response? No way! There are too many actual scientists/doctors/medical experts in Boston and they would have seen through it in a second. Everyone in Silicon Valley is way too enamored with the idea of a Stanford dropout with a radical idea that can change the world that they didn’t bother to look any deeper. That made me lol a bit.

    1. Woah! The concept of Zillions is so interesting. I do think that digital literacies of various kinds will be ESSENTIAL to this generation — i.e., telling the difference between authentic and inauthentic content, identifying ads/marketing, and ferreting out fraud. There was an interesting podcast I listened to not too long ago that made the point that email could have gone by the wayside because it became so beleaguered by spam and fraud, but two things happened: first, we as a public became smarter and more aware of the old Nigerian Princess scam through public awareness campaigns and word of mouth; and second, the tech companies themselves figured out how to isolate and suppress spam before it even hits our inboxes. I find this heart-warming in a weird way. It makes me feel as though we will continue to evolve to check the bad stuff.

      AND — such a fascinating point about Silicon Valley being in part the “problem” behind Theranos’ temporary success. Right place, right time…

  4. As always, you’ve made such great points here.

    I honestly only have time today to discuss a few thoughts instead of delving in as I would like but here goes…

    I know less about Theranos than I do about FF but I 100% agree with you that they were probably both so “successful” because of their personalities – which brings up a whole new problem in and of itself. Investors seem to be falling prey to the shiny instead of the concrete. Mark Cuban, on Shark Tank, says it best, “I like you. I hate your product. I’m out.”

    I believe that FF was such a huge deal, and subsequently a huge letdown, because Millennials are so drawn to experiences, and even more so exclusivity. I do hate to speak for entire generations (and I myself am an older Millennial), but I think that deep down the attendees bought into this so intensely, and without questioning, because of the promise of extravagance but more so exclusivity to a “once in a lifetime event.”

    In regard to UX, I am without a doubt the model person for these modern preferences. I recently test drove a 2018 SUV. While I loved the car, there was absolutely no way I would purchase it having seen it now since the “command center” (radio/temp controls, etc.) was so out of date. Another example, awhile back we changed our cable provider and I was blown away by how old their user interface was. Physically watching a show was fine but as soon as I went to the On Demand section or even the guide, hello 2000! We ended up cutting the cord just a few months after and I’d be lying if I said my decision to do so wasn’t based 50/50 on cost and bad UX.

    Finally, please report back when you find a good tinted brow gel.

    Hope you have the best, most relaxing time in FL!

    1. Hi! Wow – thanks for these thoughts, especially your commentary on the distinctively millennial preferences for exclusivity and experiences. So astute! It made me think about “FOMO” as a condition of modern existence exacerbated by (or predicated upon?) social media. Thanks for weighing in on all of this!

      And — one thing I remember finding irritating about early-stage fundraising was how often investors told us that they invested in “people, not products.” Meaning that it was more important to them that they trusted the entrepreneur than it was that the entrepreneur had a saleable product. The philosophy was — if there’s a smart, honest, ambitious entrepreneur at the helm, he/she will evolve the product until it’s successful. On the surface of things, I liked the idea. It means that people are trying to vet the quality of the team over the strength of the idea. But what it more practically means is — how well networked are you? Who else can vouch for you? Do you fit the bill as to what a “smart, honest, ambitious” entrepreneur typically looks like? A few investors explained that there was “pattern matching” involved in this kicking-of-the-tires — code, in my opinion, for: does this person have all the standard trappings for success and connections? A top-tier MBA program, a name brand company or two on the resume, various well-known mentors.

      Anyway, I could go on and on when it comes to this topic…

      xoxo

  5. I really love how you tied these two deceptions — Theranos & Fyre Festival — together here. You’ve made me want to read Bad Blood (I haven’t yet) and mayyybe watch one or both of the documentaries. Something has held me back from watching them; maybe because I’ve read articles on FF and had learned that there are specific vested interests in the making of both films (as you note here)? I so rarely watch films & TV in general that when I do, I want to make sure it’s an experience I will fully enjoy. Ha! That said, I do enjoy films that make me think, so maybe one or both of these would be a worthy choice.

    I’m so on board the lavender train with you! I have a pair of coveralls (!) that I love, recently picked up a pair of lavender socks at Steven Alan in Tribeca, and am juuuust about to pull the trigger on a lavender cocoon coat on steep sale at Everlane. 🙂

    1. CUTE – LOVE that coat!! Lavender is out there in the ether RN, isn’t it? Love when it’s mixed in to a tie-dye look 🙂

      I do think one or both of these documentaries might be a good choice even for those who don’t care to watch much film/TV. Super interesting. Someone further down in the comments notes how especially the Fyre Festival ties into some interesting insights about our generation. There’s a lot to unpack/observe!

      xx

  6. Thank you for this! I watched only the Netflix documentation of the Fyre Festival and was left with the same big question in the end as you described above: HOW could this person believe he would get away with this? I can only assume that it has to be simultaneously overestimation of ones significance and complete denial of the reality (as in “if I close my eyes its not there”- kind of denial). But still, it is alarming. Especially since this kind of deception and showmanship seems to be working so well – leading to the conclusion that a significant amount of people are willing to believe such tales. And THAT is mainly what makes me worried about the direction we are headed for …

    1. Right? It’s absolutely shocking! I can’t tell if it’s some kind of situation where these founders have never heard the word “no” or have never had any serious repercussions to their actions (??) — i.e., something to do with their upbringing? — or if they share some kind of sociopathic egotism?? It is baffling.

      xox

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