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?


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?


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]


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


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


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

Displacement


BoomEuphoria

Hyman Minsky


Hyman Minsky

Displacement


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?



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


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!



REAL PROFITS


SUSTAINABLE GROWTH


PRODUCE VALUE

Helping to launch enduring & meaningful

companies worldwide.


SECRETS TO SUSTAINING SUCCESS?

Be Smart.Be Frugal.

Have Revenue.Adeo Ressi


SUMMARY TIME: Market is Good

1) Scale Quickly2) Be Smart3) Be Frugal4) Have Revenue


SUMMARY TIME: Market is Bad

1) Have Revenue2) Be Frugal3) Be Smart4) Scale Quickly


BUBBLEBen Larson @blars0n

in.blarson.com

Weathering the

#VIB2015

fi.copitch.coach

blarson.com

Find deck and article atbubble.blarson.com

Weathering the Bubble by Ben Larson

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Transcript of Weathering the Bubble by Ben Larson