Not everyone can toss a festival in the middle of the desert and make it work. It takes a special  type of person to do this. There are festivals that have been around for years, such as Burning Man and Coachella. They built out their businesses decades ago and have continued to flourish.

But could a new player step in and take a portion of the market? 

It may seem intimidating, as tickets for Coachella sell out within the first few hours of release. The desert is hot and deserted, and no one wants to really be there. Plus, it's in the middle of nowhere.

Tyler McLean wanted to take on the challenge to see if he could do it--and in the past four years, he has succeeded. Tyler runs a festival called Splash House. It has two weekend events each summer, and this year, 5,000 people show up each day. 

For a Millennial who tossed his first festival at the age of 21, three months after graduating from UCLA, because of a desire to do an event in his hometown, that kind of attendance is quite impressive. Many Millennials may want to do the same thing but are scared of the big players. Tyler feels that anyone could do it with the proper research. 

These are the five things Tyler did that boosted his festival onward to its fourth year:

1. Know your market

Tyler tosses his festivals in Palm Springs. He knows the market, because his family has worked in the tourism industry doing vacation rentals for the past 30 years. Owing to the business his parents were in, Tyler was able to understand the market. He knew that since Palm Springs is a seasonal destination, hotels would cost $300 to $400 a night in the winter, but when summer came, the prices would drop to around $100 a night.

There was low demand to be in the city because of the heat. With this inside knowledge, Tyler knew he could get property that was undervalued and affordable. He took the opportunity to lease out multiple hotel complexes specifically for his festival.

2. Know your client

During the summer, Millennials in the same age group as Tyler want to get away. Las Vegas can be far and expensive. From Los Angeles, Palm Springs is less than half the distance. Tyler grew up in Palm Springs and knew how great the area is. He knew people would be willing to drive out to the desert for an event, but no one was doing anything. Since no one else was, Tyler figured this would be the perfect opportunity to do a festival.

3. Gather your assets

Tyler knew that in order to toss a great festival, he needed to have the hotels secure contracts. Since his parents dealt with vacation rentals, they helped him talk to and facilitate deals with the local hotels that acted as stages. He knew he had to get talent. So he scouted the best he could find within his budget. He had to get the shuttles coordinated to bring guests from one stage to the next. He needed to get the website up so people could buy tickets. 

By gathering all his assets, he was able to have the infrastructure he needed to properly toss the event. 

4. Stand out

Tyler knew his festival couldn't be like the others. 

He saw things that could be improved:

There was something he could do differently with Splash House. By having the festival at a resort, Tyler was able to create a new experience for attendees.

They would be able to:

By sticking out, Splash House attracted 1,000 people to its first event, in 2013, and created memorable experiences, catching the attention of Goldenvoice, which runs Coachella and many other concerts in California, Hawaii, Nevada, and Alaska. Goldenvoice has been doing events since the '80s and knew that people just don't toss festivals in the summer in Palm Springs. But since Splash House had such a strong initial turnout, Goldenvoice was impressed enough to enter into a partnership with Tyler.

5. Learn from your mistakes

In 2014, Tyler and Goldenvoice decided to go above and beyond for their festival. They expanded from one event to two. They invited the best talent they could. They put a lot of money into creating the ultimate Palm Springs experience. 

Festivals make money in two ways. One is from the sale of tickets. The other is booking rooms. Tyler thought it would be a good idea to try to make money off the rooms that year, so he raised the price. This caused a huge fall in ticket sales, turning off potential buyers, particularly with Airbnb on the rise. And he slowly began to realize that selling rooms is a lot more difficult than selling tickets to a festival.

Because ticket sales fell from pricing out his target market, Tyler took a pretty significant loss and had to recalibrate his strategy for future festivals, deciding to pass through the bulk savings he got from buying out the resorts directly to the consumer. This was a costly and valuable lesson for him to learn. 

Regardless, since the event had such strong talent, the people who did go started to rave about it. This fueled the steam that now brings Splash House 5,000 attendees per day. 

Tyler is excited that his festival is still an intimate size and plans to continue to grow it. He feels that since he was able to identify a gap in the market, other entrepreneurs shouldn't be scared to go out there and give it a try.

Do you know anyone else who has successfully started an event-related business? I'd love to learn more! Comment below. 

Published on: Aug 7, 2016