Weathering the Bubble by Ben Larson
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Transcript of Weathering the Bubble by Ben Larson
BUBBLEBen Larson @blars0n
in.blarson.com
Weathering the
#VIB2015
@pitchcoacher www.pitch.coach
HQ EU+ SF/SV
BUBBLE OR NO BUBBLE?
in.blarson.com @blars0n #VIB2015
WHAT IS A BUBBLE?
in.blarson.com @blars0n #VIB2015
DEFINITION OF A BUBBLEa pronounced and unsustainable
market rise attributed to increased speculation in technology
stocks. A bubble is highlighted by rapid share price growth
and high valuations based on standard metrics like
price/earnings ratio or price/sales. in.blarson.com @blars0n #VIB2015
SO. BUBBLE? NO BUBBLE?
in.blarson.com @blars0n #VIB2015
Bill Gurley of Benchmark addresses early fears over a tech bubble and suggests the correct investment temperament for taking advantage of the situation. [1/24/14] Kanyi Maqubela of Collaborative Fund re-evaluates the meaning of "tech" in discussing whether we're in a bubble.
[3/31/14] Dave Crowder argues why it's not like 1999. [4/7/14] EquityZen's Phil Haslett discusses the slump in public tech stocks and its implications for private markets. [4/18/14] Sam
Altman (Y Combinator) examines the potential pitfalls of high valuations and gives founders advice on managing their behaviors in light of the increased availability of capital. [6/20/14] Bill
Gurley suggests that we are not in a valuation bubble, but in a risk bubble. [2/25/15] Lou Kerner of the Social Internet Fund weighs in on the tech bubble debate by comparing and contrasting
data from the ’99-’00 tech bubble with today’s data. [March, 2015] We're in a bubble worse than 2000, according to Mark Cuban. [3/4/15] Bill Gurley gets back on the "risk bubble" soap box at SXSW. [3/15/15] Academic Aswath Damodaran tests Mark Cuban's bubble thesis. [3/20/15] A
data-driven counterpoint to Bill Gurley is proffered by Ben Narasin of TriplePoint Ventures. [3/21/15] Sam Altman chimes in with some thoughts and a wager on his YC portfolio. [3/24/15] Sam Altman takes his message to the masses on CNBC. [3/25/15] Brooklyn Bridge Ventures’
Charlie O’Donnell maintains that, if we are in a tech bubble, many of today’s unicorns would survive through the inevitable downturn. [3/30/15] Dave McClure of 500 Startups focuses the
discussion on public company Dinosaurs and how Unicorns will eat their lunch. [4/11/15]
in.blarson.com @blars0n #VIB2015
in.blarson.com @blars0n #VIB2015
in.blarson.com @blars0n #VIB2015
NO BUBBLE…valuations for tech companies don’t look any higher than other
stock valuations…price-to-earnings ratio…is in fact lower than for the
index as a whole. Sam Altman, Y-Combinator
in.blarson.com @blars0n #VIB2015
NO BUBBLE
Steady growth in funding reflects the scale of opportunity.
Bender, Evans, and Kupor, Andreessen Horowitz
a16z 53 pg slide deck linked @ bubble.blarson.com
in.blarson.com @blars0n #VIB2015
BUBBLE
The tech sector is making a huge mistake in thinking that they know their companies
and how to value them better than Wall Street.
That kind of thinking is arrogance and pride comes before the fall.
Fred Wilson in.blarson.com @blars0n #VIB2015
in.blarson.com @blars0n #VIB2015
Displacement
in.blarson.com @blars0n #VIB2015
BoomEuphoria
Hyman Minsky
in.blarson.com @blars0n #VIB2015
Hyman Minsky
Displacement
in.blarson.com @blars0n #VIB2015
BoomEuphoria
Profit TakingPanicHyman Minsky
BUBBLE
When the market turns, M&A mostly stops. Nobody will want to buy your cash-incinerating startup. There will
be no Plan B. VAPORIZE.Worry.
Marc Andreessenin.blarson.com @blars0n #VIB2015
DOES IT MATTER?
in.blarson.com @blars0n #VIB2015
in.blarson.com @blars0n #VIB2015
HISTORY OF U.S. ECONOMY
Manage what you can control:
spendinggrowth assumptions
earnings assumptions
Focus on QualityLower Risk
Reduce Debt
Sequoia Capital, Oct 2008
◻ MUST-HAVE PRODUCT◻ ESTABLISHED REVENUE MODEL◻ UNDERSTANDING OF MARKET UPTAKE◻ CUSTOMERS ABILITY TO PAY◻ ASSESSMENT vs. COMPETITORS◻ CASH IS KING◻ NEED FOR PROFITABILITY
GET REALOR
GO HOME
Sequoia Capital
in.blarson.com @blars0n #VIB2015
You only find out who’sswimming nakedwhen the tide goes out.
Warren Buffett
@pitchcoacher @blars0n
A t s o m e p o i n t y o u h a v e t o
build a real business,
generate real profits, sustain the company without… investor’s capital, and start
producing value the old fashioned way.Fred Wilson
LET’S BUILD A REAL BUSINESS!
in.blarson.com @blars0n #VIB2015
@pitchcoacher @blars0n
REAL PROFITS
@pitchcoacher @blars0n
SUSTAINABLE GROWTH
@pitchcoacher @blars0n
PRODUCE VALUE
Helping to launch enduring & meaningful
companies worldwide.
in.blarson.com @blars0n #VIB2015
SECRETS TO SUSTAINING SUCCESS?
Be Smart.Be Frugal.
Have Revenue.Adeo Ressi
in.blarson.com @blars0n #VIB2015
SUMMARY TIME: Market is Good
1) Scale Quickly2) Be Smart3) Be Frugal4) Have Revenue
in.blarson.com @blars0n #VIB2015
SUMMARY TIME: Market is Bad
1) Have Revenue2) Be Frugal3) Be Smart4) Scale Quickly
in.blarson.com @blars0n #VIB2015
in.blarson.com @blars0n #VIB2015
in.blarson.com @blars0n #VIB2015
in.blarson.com @blars0n #VIB2015
BUBBLEBen Larson @blars0n
in.blarson.com
Weathering the
#VIB2015
fi.copitch.coach
blarson.com
Find deck and article atbubble.blarson.com