Alameda-based company Vator put a number of exciting young companies on display at its Splash LA event held this Thursday at the Loews Santa Monica Beach Hotel. It was a full day of start-up frenzy, including appearances by Shark Tank star Mark Cuban, one of Forbes’ eight wealthiest self-made women and founder of NYX Cosmetics Toni Ko, and co-founder and CEO of The Honest Company Brian Lee. The event also featured eight exciting young companies competing for the approval of the judges and be declared winner of the Global Splash. Awards for the winner include 10 sit-down VC meetings and $15,000 worth of in-kind prizes.
At the close of the day, it was Industry, a professional network for service and hospitality workers, that took home the grand prize, with ArbiClaims, a website for doing binding arbitration online, as runner up.
Cuban on Trump and the State of Entrepreneurship
The morning kicked off with opening remarks from Eva Ho, managing partner of Vika Ventures, before moving on to a fireside chat with Nick Green, co-founder of Thrive Market. Lawrence Coburn, founder and CEO of Doubldutch, talked with the crowd about how he built his company, a difficult path that included having to start from scratch after Google’s (GOOG) Panda update devastated a previous business model, and how his company had to learn to work around some of the bigger entrants into the market like Salesforce (CRM).
Then, it was time for billionaire investor and owner of the Dallas Mavericks Mark Cuban to take the stage for a fireside chat with Vator founder & CEO Bambi Francisco. Cuban spoke for almost an hour, discussing his views on everything from how to hustle your way to a successful business venture. He also spoke on his role on the show Shark Tank and why he feels like it’s an important part of his work, even if the investments don’t offer returns on the same level as his Angel investments.
“I do the show not because it’s a great investment, but because it sends the message to kids 8 to 80 that the American dream is alive and well,” Cuban said. “You can watch the show and come to realize that somebody out of Iowa or the middle of nowhere Texas can start a company and turn it into something special. So many families watch the show together that it’s just – really in this day and age, when so many people are saying what’s wrong with this and what’s wrong with that and what’s wrong with America, it just really reinforces that somebody with an idea can go beyond just an idea to a company phase, and really work to make something special happen. Just reinforcing that idea is really important. … Every episode reaches at least 20 million people over its lifetime and reinforces to those 20 million plus that the American Dream is alive and well.”
Cuban also didn’t shy away from expressing his continued objections to Donald Trump’s candidacy, using what he perceives as the failings of Trump’s business career to argue for why he’s not the man for the highest office in the land.
“Look at his track record,” Cuban said. “He’s been through three different campaign managers. There’s been nobody, not one single person who stood up to say ‘Boy, I worked for Trump forever. He’s been a great mentor to me.’ Has anybody heard one? ‘Boy, Donald Trump invested in my company, what a great entrance.’ Have you heard of one investment he’s made with one entrepreneur? Not one. ‘Boy, Donald Trump made me a s---load of money.’ Words no one has ever said.”
Fitbit for Skateboards and Female Ambassadors
Cuban ducked out to appear on Power Lunch on CNBC, but it wasn’t long before he was back onstage to judge the Global Splash competition, watching as founders took their turns stepping before the panel of judges and running the gauntlet of probing questions about why their business is built to last. Joining Cuban for the first four company presentations were judges Brian Lee, Michael Jones, co-founder and CEO of Science, Dana Settle, co-founder & partner with Greycroft Partners, and emcee Mark Goldstein, managing partner of Efficient Capacity.
The presentations demonstrated why Los Angeles is quickly gaining a reputation as a city with a landscape of innovative start-ups that could rival almost any other city in the US. The presenters were well-prepared, poised, and took the heat from the judges in stride. What’s more, as several people pointed out, Vator actually pioneered the sort of start-up competition on display, with later iterations from outlets like Shark Tank and Techcrunch following Vator’s lead.
First up was RideBlock, a fitbit style motion sensor that can be attached to the truck of a skateboard and allow skaters to track, record, and log their tricks automatically as they ride. Then came Reely, a cloud-based program that watches sports programming and auto-generates highlights packages much faster than human editors could possible produce them. That was followed by Discotech, a booking app dedicated specifically to the nightclub crowd. Finally, Oper, a mobile payment and ordering system designed to help reduce the burden credit card fees place on restaurants, gave the last presentation of the first block of companies.
After a short break, the second set of companies presented to a new panel. While Cuban remained on stage, he was now joined by Erin Flynn, managing partner of the Vator Investment Club, Shamin Rostami, partner with TYLT Ventures, Noah Doyle, partner at Javelin Venture Partners, and Binti Yost, principal economic and valuation services at KPMG.
The second block of companies again featured some innovative and exciting ideas for potentially disruptive entries into their industries. It kicked off with ArbiClaims, the online platform built to provide binding arbitration and help users avoid the tremendous cost and inconvenience of going to small claims court that would eventually finish as the runner up. Eddily took the stage next, presenting about how the EdTech start-up intends rebuild the connection between college learning and campus recruiting. Kate Edwards of Heartbeat, a network for female millennial ambassadors, described how her company intends to change the landscape of marketing to that demographic by utilizing peers to communicate. And last but clearly not least, Industry’s founder and CEO Cody Barbo took the stage to describe his service, a “LinkedIn for the service and hospitality space.”
“I remember… working at a bar back in the day,” said Barbo. “The problem is, it’s a pain in the ass to get a job. There’s paper resumes, there’s Craigslist, still the most commonly used tools in the service model. And on top of that, there’s a 72% turnover across the country in addition to over 78 consecutive months of job growth.” This is all in an industry where the quality of one’s cooking or drink mixing is what really matters, making a better means for connecting businesses with quality employees something that could have huge potential.
With that, the conference broke for lunch, leaving a sense of suspense as to which of these companies would be announced the winner after the afternoon session.
Breaking into the Billion-Dollar Cosmetics Space
The afternoon session brought a series of fireside chats with a number of successful entrepreneurs and investors that provided a fascinating look into the world of seed funding and venture capital. It was a packed slate, including sit-downs with Mike Jones, Hardeep Walia, founder & CEO of Motif, Tri Tran, founder & CEO of Munchery, and Andre Haddad, CEO of Turo.
One of the most interesting events of the afternoon though, was the chat between Toni Ko and Birdies Founder and President Bianca Gates. The two delved into Ko’s personal story, immigrating to the United States from Korea at age 13 and then starting NYX Cosmetics at age 25, as well as her approach to business that allowed her to build a $250,000 loan from her parents into a cosmetics company that she ultimately sold for $500 million to L’Oreal (LRLCY). She also discussed how her initial retirement made her discover how important work was to her life, as well as how she settled on entering the realm of sunglasses with her new venture, Perverse Sunglasses given that her sale to L’Oreal included a non-compete clause that kept her from re-entering the familiar terrain of the cosmetics industry.
“I looked for a business where I could sell a product to women,” said Ko. “Women are the ultimate consumers... I looked for a space with a high mark up, because if you don’t have a high mark up, you don’t have the marketing power and you cannot grow your brand. And then I looked for a space where there is no expiration or there’s a really long shelf life. And you have to have a passion for what you do, so I listed the items of products that I have a passion for…”
Tech is Skipping the Valley for the Beach
Finally, at the close of the day, Bambi Francisco announced Industry as the winner, and the party moved upstairs for cocktails on the rooftop deck at Wavemaker. The event, held on a sunny, clear day mere blocks from the beach, along with the recent news that local startup Snapchat was planning a $25 billion IPO, is another reminder of Los Angeles’ rapidly growing place in the startup economy. Silicon Beach is quickly asserting itself as the next iteration of what has become an increasingly saturated market in the Bay Area, and anyone interested in the next wave of tech innovation would be well served keeping a close eye on the Southland for what’s coming next.
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