Highlights from Day 1 @ LAUNCH Festival

Jason Calacanis talks with Adam Nash from Wealthfront

Day 1 of LAUNCH was amazing. Jason kicked it off with sharing his vision for the conference; when he was trying to make it the tech industry 20–25 years, he couldn’t afford the four figure passes to hear from and meet the titans of industry. He told himself that when he “made it,” he would ensure that up and coming founders wouldn’t face the same hurdles. Thankfully, he came through, and I, along with countless others, are immensely grateful for the (free!) opportunity. Let’s get to the highlights!

VC Panel: Aileen Lee, Cowboy Ventures; Jed Katz, Javelin Venture Partners; Hunter WalkHomebrew

The morning panel got right down the issue on the minds of many: valuations. Predictably, the VCs placed some of the blame on seed stage investors (especially venture funds simply throwing around $250–500K checks because they were drops in the bucket), overzealous entrepreneurs, and lazy diligence (investing on the back end of innovation rather than the front).

Another issue Aileen raised is that entrepreneurs are still valuing their companies at the valuations of one or two years ago. As Hunter said, the landscape has changed in a similar way to the transformation of the Republican Party; that is, a paradigm shift.

All the panelists briefly touched on the “poisonous” demo day culture. Obviously, VCs prefer more time rather than less when making an investment decision, but Jared mentioned this is not a completely selfish perspective. An investor/entrepreneur relationship can last as much as 1o years (it always jars me to hear this); it’s better to think of it more as a marriage than a business relationship.

Heart of the hustle: The Demo Pit

George Zachary, CRV & Sebastian ThrunUdacity

This was one of the more fascinating panels of the day. Some felt it veered off course with talk of currency devaluation, GDP growth, inflation, etc. but I thought it was highly relevant. George and Sebastian discussed the future of work with Jason, and noted how full time work will decrease with the on demand economy; the flip side of this is people may find themselves working well into the 70s. Sebastian noted how traditional colleges are failing the students of today, which I wholeheartedly agree with. As a sophomore at UC Berkeley, I’ve seen first hand the misaligned incentives that our education system consists of. Professors are paid for research, so they pursue grants rather than teaching, administrators pad their own salaries, politicians make empty promises, all the while that students rack up more debt.

I believe education is still ripe for significant further disruption.

Adam Nash, Wealthfront

I only caught the last portion of Jason’s talk with Adam, but enjoyed it immensely. Some takeaways:

  • be careful who you take money from (both potential customers and investors)
  • emotions are still the biggest hurdle between investors and achieving their goals (that’s why Wealthfront users can only change their risk tolerance on a desktop, so no drunken 2 AM adjustments)
  • Schwab also started off with a specialized service (low cost retail trades) and then expanded to a plethora of financial services
  • Vanguard and the like banked on the boomer generation; Wealthfront, Betterment, etc. are all in on the millennial generation, for better or worse.

Wrap Up

Companies to watch for:

  • Chariot: the vanpool company has ingeniously wriggled around local regulations, and has a key partnership with a Fortune 500 company for renting out its vans (anywhere in the world!) that allow for excellent margins
  • Stay Wonderful: disrupting the Expedias of the world by incentivizing travelers to book directly on hotels’ websites; I don’t how successful they’ll be, but it was one of the best pitches I’ve ever seen.
  • CafeX: Robot. Coffee. Makers.
“The end of hipster baristas everywhere” — jason