To the average viewer, the story of Fyre festival – the disastrous luxury music festival narrated in two recent documentaries – seemed like an extreme example of incompetence and greed.

But there are many, many companies like Fyre out there. And for those of us who have worked for one of them, the films offer a depressingly familiar depiction of the smoke-and-mirrors nature of the entire industry.

The tech startup and digital media world is a place where talking a good game can get you a long way. The most memorable examples are the most extreme: remember Theranos, whose “revolutionary” blood-testing equipment promised to run a suite of tests on a single drop of blood, but … didn’t? Or Juicero, whose fancy juicer proved superfluous once an enterprising journalist realised you could just squeeze the packs of crushed fruit yourself? Or Clinkle, a company lampooned for raising an astonishing amount of money on the basis of one promotional video (sound familiar?) – despite nobody knowing what its app actually did?

But even beyond the extremes, in which the incompetence (or fraud) is so blatant that someone ends up in jail, there’s a pattern: some smooth-talking “visionary” manages to convince some VC people to turn on the money tap. A bunch of staff are hired, worked to absurd schedules on promises of “changing the world”. Any problems are met with aggressive, borderline-delusional positivity. And eventually, all the manifesting and mindfulness and life-coaching in the world can’t mask the fact that the “revolutionary” blood-testing apparatus doesn’t work, or the payment app does precisely nothing that other payment apps don’t do already, or the festival doesn’t have any bands. Or accommodation. Or food. (Or water.)

From 2013-17, I worked for another NYC-based digital media startup – and watching the Fyre documentaries filled me with a sort of shudder-inducing deja vu.

I recognised the hangdog, beaten-down expression of all of founder Billy McFarland’s employees: the creeping realisation that we were working ourselves to death for a company whose business model simply didn’t work.

The Soho loft-style office we inhabited was renovated at great expense by the company, which didn’t own the space – which, well, I’ll leave you to think about the financial wisdom of that. It turned out to be much too big for us, so we shared it with various ill-fated startups, which meant we got to watch the boom-and-bust cycle play out time after time.

Perhaps the most memorable of these doomed startups sticks in the mind for one reason: its icon. Dear god, the icon. Today – in a development that is perhaps the best for all concerned – it is nowhere to be found on the internet, so I’ve had to draw it from memory. It looked like ... this:

It was supposed to look like someone holding a phone to their ear, I guess? The app launched with much fanfare, and sank with little. At the time, it seemed perversely reassuring for our own business: we might be flying by the seat of our pants, but at least we hadn’t launched an app with a logo that looked like a man either vomiting into his own lap, or performing an act that, according to legend, requires the removal of several ribs.

Unfortunately it transpired that we had more in common with our office-mates than we thought. Of course, this is the fundamental problem with digital media: nobody knows how to make any money. Traditionally, media has profited by selling its product to either customers or advertisers, and preferably both. Digital media does precisely none of the former, and increasingly little of the latter. It’s a worry: as print media declines, digital media becomes more and more the place we turn for journalism. And journalism isn’t profitable.

This means digital media companies end up staying afloat the same way tech startups do: with, ahem, innovative business models. They guzzle on VC funding in the hope that it’ll keep the lights on long enough for them to a) finally work out how to make the whole thing viable, or, more likely, b) be sold to a larger, more profitable company. Ideally the sale happens when the company is at its peak, allowing the owners to cash out handsomely – like when Facebook bought WhatsApp. Failing that, a sale can still happen when the company is nearly (or actually) bankrupt – one example here is Gawker, and another my former employer.

Either way, the transaction is usually followed by a round of layoffs, and the discovery by the remaining staff that they suddenly have a whole lot more work to do and a whole lot less time to do it. (Employees of Mic, most recently, are nodding forlornly at this point.)

There’s a bit at the end of the Netflix Fyre festival documentary where McFarland tells his staff that they’re not going to be laid off; instead, they’re just ... not going to get money for a while. “So,” marvels one of his long-suffering employees, “you’re not going to lay us off, which [would] allow us to apply for unemployment benefits. You just aren’t gonna pay us any more, making us quit ourselves.”

McFarland stutters for a moment, then replies, “I’m not aware of how this impacts employment benefits.”

You couldn’t ask for a more perfect summary of the divide that lies at the heart of digital media, between the fairyland of marketing videos and investment decks and the very real effect that the reams of bullshit therein have on people’s lives. Fyre was particularly objectionable because of the way its failure’s effects extended to those even less able to carry the can for a terrible idea: the Bahamians left unpaid and out of pocket.

But even in less extreme examples, the pattern remains: the owners fail upwards and everyone else is left to clean up the mess.

• Tom Hawking is a freelance writer based in Melbourne