getting error running 'make watch'

I get the following running 'make watch' on a Ubuntu VirtualBox VM with io.js v1.6.1

...
webpack: bundle is now VALID.
Hash: 7a439141e7093b062723
Version: webpack 1.5.3
Time: 7111ms
Asset Size Chunks Chunk Names
app.min.js 316521 0 [emitted] main
+ 224 hidden modules
nodemon lib/server/app.js
26 Mar 15:28:22 - [nodemon] v1.3.7
26 Mar 15:28:22 - [nodemon] to restart at any time, enter `rs`
26 Mar 15:28:22 - [nodemon] watching: _._
26 Mar 15:28:22 - [nodemon] starting `node --harmony lib/server/app.js`

/home/johnsz/shared/code/react/flummox-isomorphic-demo/node_modules/koa/lib/application.js:174
function *respond(next) {
^
SyntaxError: Unexpected token *
at Module._compile (module.js:439:25)
at Object.Module._extensions..js (module.js:474:10)
at Module.load (module.js:356:32)
at Function.Module._load (module.js:312:12)
at Module.require (module.js:364:17)
at require (module.js:380:17)
at Object. (../../src/server/app.js:7:11)
at Module._compile (module.js:456:26)
at Object.Module._extensions..js (module.js:474:10)
at Module.load (module.js:356:32)
26 Mar 15:28:22 - [nodemon] app crashed - waiting for file changes before starting...