
YC Demo Day Session 2 - xpop2027
http://techcrunch.com/2014/08/19/yc-demo-day-session-2-helion-bitaccess-ubiome-fixed-and-more/
======
nichodges
> Sliced democratizes access to hedge funds. Even though hedge funds have
> outperformed S&P 500 over the past decade, very few investors have access to
> them.

Hedge Funds on average do not outperform market indices such as S&P 500. I'm
curious as to whether this was TechCrunch's take on the problem, or the
startup's?

~~~
jayp
Interesting. If Hedge funds can't event beat a vanilla S&P500 index fund, why
would any one want to invest in a hedge fund?

[http://longbets.org/362/](http://longbets.org/362/)

Buffet (S&P500) is leading against hedge funds on the aforementioned long bet:
[http://fortune.com/2014/02/05/buffett-widens-lead-
in-1-milli...](http://fortune.com/2014/02/05/buffett-widens-lead-in-1-million-
hedge-fund-bet/)

Disclaimer: I am on Buffet's side on this long bet. Management fees are the
devil. I am all-in for low-fee index funds.

~~~
bjterry
It can make sense to invest in hedge funds even if you don't expect your hedge
fund portfolio to beat the market on average, if the hedge fund is
uncorrelated with market returns. This is a basic result of Modern Portfolio
Theory, but the intuition is that sometimes with the stock market down you
will have better performance in your hedge funds (and vice versa), so your
account will be less risky in the sense of having shallower troughs. If you
want to take on the same risk (i.e. have troughs that are the same depth as if
you just held stocks) you can invest more of your capital in stocks/hedge
funds vs. bonds/cash, which means you are making better returns. It should be
noted that the hedge fund universe is extremely broad, and different funds
have different risk/return characteristics.

Venture capital is different because it is both correlated with market returns
and the average fund significantly underperforms the market,[1] so getting
good returns in venture capital is pretty much a question of getting
allocations in the top 20 funds, which are persistently the best. They have
the best returns in part because they have the best reputations and thus
access to the deals that provide the highest returns (top entrepreneurs would
take Andreesen Horowitz's money over money from Unknown Partners on the same
terms).

1:
[http://www.kauffman.org/~/media/kauffman_org/research%20repo...](http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2012/05/we%20have%20met%20the%20enemy%20and%20he%20is%20us%281%29.pdf)

~~~
foobarqux
A recent FT AlphaVille article described research which showed that Hedge
Funds aren't even uncorrelated from the market, only levered or delevered.

~~~
GregorStocks
Here's the link: [http://ftalphaville.ft.com/2014/08/01/1914342/the-hare-
gets-...](http://ftalphaville.ft.com/2014/08/01/1914342/the-hare-gets-rich-
while-you-dont-back-the-passive-tortoise/)

And here's the best part: [http://ftalphaville.ft.com/files/2014/08/Screen-
shot-2014-08...](http://ftalphaville.ft.com/files/2014/08/Screen-
shot-2014-08-01-at-10.19.47-AM.png)

------
seren
Helion seems unreal. I am not ready up to date with fusion research, but as
far as I know there was not even a demo or prototype in lab producing energy
for a few seconds (or minutes), and they claim to have a product in 6 years.
Can someone tell me what I've missed ?

~~~
adwf
You're probably not missing anything. By my (limited) reckoning, even if they
can get their design to work in theory, I think they're grossly
underestimating the materials requirements for the fusion reactor.

From what I recall, one of the big problems that any reactor project has is
that the reaction has a tendency to destroy the reaction chamber. Not just the
heat, but the neutron radiation can completely screw up the reaction chamber
walls, which then need replacing. It's one of the reasons the ITER project is
so large, to make it relatively robust in the face of such destructive power.
I also remember reading a while back that the force from the electromagnets in
the ITER project is sufficient to launch the entire reaction chamber off the
ground, something like 5000 tons...

Having said that, I think it's cool that they're attempting it and I think
that fusion projects have been grossly underfunded in the past. The reason why
it's always 30 years away is because they're always cutting the funding!

I'd love to be proven wrong on this, but I imagine they'll have unexpected
escalating costs surrounding the actual building of a working _durable_
reactor and the company will die before it gets off the ground.

~~~
idlewords
It seems like the kind of high risk thing VC money should be thrown at. It
would be cool to see more research into cold fusion, too. The well was
poisoned back in the eighties and the field never recovered.

~~~
seren
This is definitely cool, and "if" something come out of it, it will be huge. I
am a bit skeptical they'll have a product in a few years, but it is possible
that they can find important pieces of the puzzle, that could later be sold
and reused by another company.

------
tptacek
"Death begins in the colon" seems to be attributed to an expert (albeit an old
one), but unfortunately the adage is mostly associated with "wellness"
practices on Google; it seems to be a shibboleth for things like colonics.

------
dr_
I realize it's hard to predict what direction a company will take in the
future, but is it YCombinator's policy to incubate companies that from the
start seem to be competing against each other? It seems to me that ListRunner
and Medisas ([http://www.forbes.com/sites/alextaub/2014/04/24/meet-
medisas...](http://www.forbes.com/sites/alextaub/2014/04/24/meet-medisas-the-
company-that-saves-peoples-lives/)) do pretty much exactly the same thing.

~~~
argonaut
YC has stated several times that often companies will change ideas after they
get into YC. YC thus isn't going to tell them to not do something just because
it competes with another YC company.

------
kyro
uBiome may be onto something. I read a study the other day that said obesity
may actually be linked to gut flora, which I found very interesting. Excited
to see what comes of this.

------
dkyc
Flynn could really make a dent in the PaaS space, although they seem to have a
problem communicating their value proposition. I understand it's something
like an open-source version of Heroku? If they take all the hassle out of
deployments (everything that happens between git push and bare metal), I see a
_lot_ of Heroku users that are sick and tired of paying outrageous 35$ a month
could flock over to them.

~~~
archseer
One of the maintainers here, we do agree that documentation and getting our
message across a bit more clearer is our primary priority.

One of our major advantages is that we're a bit more ambitious about deploys
and we try not to limit you to a certain format: you can deploy any type of
application on Flynn, not just web apps, but regular applications and services
like databases, mail servers and so on. We then let you connect all of these
together via service discovery. Meaning that instead of limiting you to a
plugin system, Flynn allows you to write your own "plugins" that behave just
like regular apps.

------
rdl
I'm really excited about some of these, but particularly ubiome. It's pretty
"ew, gross" to think about, but it does seem like an area of medicine and
diagnostics which is open for deeper exploration, finally. (disclaimer: I met
the team a couple times before in bay area tech contexts and like them)

------
parennoob
Love the idea of Fixed, specially if it spills over to healthcare charges.

I have observed that hospitals invariably manage to saddle me with ridiculous
"processing fees" and suchlike and add around $100 or more to my expected
charges every time I visit them. I usually just pay up to avoid the nuisance
of dealing with administrators who cannot seem to be able to communicate over
email, and possible damage to my credit if I try to challenge it. I strongly
suspect this is the case for a lot of middle-class Americans.

I'd gladly pay the same amount to Fixed to act as an intermediary between me
and said 70s-era administrators, if only to let them know that someone is
looking carefully at their exorbitant charges, and possibly even contesting
them.

------
cm2012
Uber for bodyguards and uber for lawns. Neat!

------
conorgil145
Couldn't Square or some other "big" player come in and implement payments via
bank account and simply put Kash out of business? I know nothing of the
domain, but it seems relatively straight forward to do, no? PayPal already
let's me send money to any individual with an email address (and maybe a
PayPal account?), so couldn't they just change their fees to 1% flat for
businesses tomorrow?

What am I missing? Thoughts?

~~~
maxbrown
Sure, a big player could implement this model, but they may not take the risk
or make the investment if their current model is successful.

Also, it certainly doesn't mean they'll put Kash out of business if they do
(and if the Kash team succeeds). For example, I don't expect Amazon Local
Register to put Square out of business.

~~~
conorgil145
Fair points. I guess I struggle to see the benefit as a user. I just glanced
at their site and they do list a few benefits for users including "fast and
easy payment, perks and rewards for using Kash, manage spending better with
daily limits, no bank fees or interest charges". These could be interesting,
but as a user I don't know that the incentives are there for me to stop using
my CC which I am already accustomed to. I get points from CC purchases, use
Mint to set budgets, and do not see bank fees or interest charges because I
pay each month in full. I guess I am just not the target market for Kash.

However, I clearly see the many benefits for the retailer. They are saving
money on transaction fees, avoid charge backs (maybe?), get paid more quickly,
and is free for businesses charging under $100k.

I think in the back of my mind when I posted my previous comment was the
classic chicken-and-the egg problem. Lots of benefits for retailers, but only
if customers use it. Possible benefits for customers, but only if retailers
accept it. I think that many of the other larger existing players in this
space already have most of the infrastructure in place (eg, Square) and have
brand recognition to boot. So, I see a very large uphill battle for Kash in
this space with their business model. However, as you point out, it isn't
necessarily a zero sum game and Kash could exist along side competitors. It
will be interesting to see if they can differentiate themselves in some way
and/or execute better in some way.

------
huhtenberg
uBiome looks interesting. Has anyone tried them?

[http://ubiome.com/](http://ubiome.com/)

------
GregorStocks
> Sliced democratizes access to hedge funds.

To be clear, Sliced is open only to accredited investors and has a minimum
investment of $20,000.

------
Jemaclus
Will uBiome run into the same FDA regulatory issues that 23andMe did? If so, I
hope they have a great legal team...

