Israel Innovation 2.0

TechAviv, a global organization that brings together Israeli hi-tech founders and investors, held its final event for 2010 in Herzliyya last night. The event began with Michael Eisenberg of Benchmark Capital discussing his Hummus Manifesto – the problems facing Israeli success in the Internet industry and some solutions. Following the presentation, he and six other VCs took seats on stage and participated in an open discussion with the 200+ members in the audience on everything from grievances with VC funding and finding funding in general to problems with product design and solutions for all of these.

Here is a video of the VCs giving their predictions for 2011 at the end of the event:

The full panel was made up of Eisenberg, Scott Tobin of Battery Ventures, Adam Fisher of Bessemer, Noga Kap of BRM, Adi Pundak-Mintz of Gemini Israel Funds, Avi Zeevi of Carmel Ventures, and Yoram Snir of Greylock Partners.

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If you ever wonder what the most important networking website in Israel is for Israeli startups, it seems that Meetup.com might have more impact on a company’s success than LinkedIn or Facebook. Or at least in the initial stages of forming the startup. Without Meetup.com – which helps groups of people with common interests plan meetings - there might not be as many startups in Israel as there are right now and they might not be as successful or as promising as they are without the networking and fundraising opportunities that the different groups that have popped up on Meetup.com in recent years have offered them.

Almost certainly there wouldn’t have been the unique opportunity to create a networking group focused on encouraging and empowering female entrepreneurs and aspiring female entrepreneurs in Israel to succeed. There also almost certainly wouldn’t have been a new annual event that allows some of the most promising startups founded by females to present to a room full of venture capitalists and angel investors and to meet with them afterwards. Thanks to Meetup.com though, there’s Yazamiyot. And all this and more has become possible.

A year after Gemini Israel Funds Associate Einat Metzer started the group, Yazamiyot – which is the Hebrew plural for “female entrepreneurs” – has over 200 members and holds monthly meetups and additional activities to inspire female entrepreneurs, help them grow as business people, and give them opportunities such as today’s FundHer competition.

Ilana Jucha of Stat-Market

At least fifteen startups founded by women were in attendance at the event and five of them -Flakkes, Yubitech, Stat-Market, microSteps, and Brandsforce – presented. Aside from Yazamiyot members, the audience was primarily made up of investors who had the ability at the end of the presentations to vote for which company they liked the most.

The winner, microSteps is an educational technology company that currently provides the private school market, specifically preschools, with a web portal that manages all of the school’s communications it has with parents. One use of the portal is removing the need the need for those notes that used to be sent home with kids only to be thrown out without reading after they got crushed in the kids’ backpacks. Founded by Elanit Halevi-Yariv and Yael Goshen in 2007, the company currently has a presence in Atlanta and New York and over 50,000 registered users in 28 states across the US.

Here is a demo of microSteps solution:

The runners-up of the competition were Yubitech and Brandsforce. Founded in 2009 by Danny Weissberg and Nili Shohet, Yubitech mobilizes any enterprise application into an application that can run on any smart-phone in just a matter of days. Brandsforce, founded by Nili Goldberg-Levi, offers marketers and advertisers a social media recruitment solution that identifies relevant opinion leaders and recruits them to help promote a company’s brand and enhance brand engagement on social networks.

Here is a video of YubiTech’s solution:

Stat-Market was founded by Ilana Jucha and offers real-time analytical software that can predict customer behavior and help maximize customers’ lifetime value (LTV). Founded by Ruth Polachek in 2008, Flakkes bridges the gap between users and advertisers by enabling users to provide direct feedback on what they think of a company’s online ads. See the video below.

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SecondMarket, a centralized marketplace for the buying and selling of alternative investments, such as shares in private companies, announced earlier today the launch of its operations in Israel. An Israel-specific site that the company set up will provide Israeli companies with the ability to access capital and to facilitate secondary liquidity for shareholders.

According to Ranan Lachman, Vice President at SecondMarket who will oversee the company’s Israeli efforts, “SecondMarket’s private company market complements traditional financing methods and allows employees of Israeli start-ups to realize some of the value they’ve helped to create in their companies.”

The announcement points out some fascinating figures about Israel’s technology industry and SecondMarket’s network. According to it,

“There are approximately 300,000 technology employees in Israel, many of whom have worked for multiple companies for which they hold stock options. SecondMarket’s introduction into the Israeli market allows these employees to sell shares in a company-controlled environment prior to an IPO or M&A transaction.

SecondMarket has built a global network of over 20,000 market participants, and has completed more than $350 million in transactions in some of the world’s leading venture-backed private companies, including Facebook, Twitter and LinkedIn. SecondMarket’s private company model also provides Israeli venture-backed private companies with an opportunity to access capital through a cost-effective and efficient auction platform.”

This move is unlikely to change the Israeli tech scene much though. The third quarter saw an overall increase in VC funding in the Israeli companies that SecondMarket is interested in attracting, the already established ones. In addition, 2011 is expected to see a revival in Israeli companies going public, other companies that SecondMarket tries to attract.

That said, the SecondMarket concept does offer another exit solution for VC-funded companies, which Israel’s struggling VC funds could push for. It also wouldn’t be surprising if employees who have been at a few companies and have shares in them use SecondMarket to sell those shares, especially entrepreneurs who will use that money to build startups.

::BusinessWire

In 2011 Verizon Wireless will start carrying the iPhone adding another level of competition in the iPhone-Android wars.

AT&T announced on Thursday that it is opening three innovation centers, including one that will  be in Israel.

The move will give mobile application developers the chance to present their app ideas and develop them at these labs and then to get them out to market fast. Through a fast (“speed-dating”) approach, AT&T hopes to review up to 400 proposals a year.

The company plans to work with Alcatel-Lucent, Amdocs and Ericsson, to locate innovation centers in Palo Alto, CA, Plano, TX, and Ra’anana, near Tel Aviv, Israel, and with Cisco and Juniper Networks as infrastructure providers and collaborators in the centers.

According to the press release,

AT&T and its industry collaborators selected participants are working in three key areas:

• Connected-health applications that could help identify health concerns earlier and dramatically improve the quality of care
• HTML5 applications that will revolutionize the online experience, and
• Machine-to-machine mobile applications that will help people interact with their environment in meaningful new ways.”

“The innovation centers will help us enhance collaboration and dramatically accelerate the velocity of innovation, taking ideas from concept to reality in mere months as opposed to years,” said John Donovan, AT&T’s chief technology officer. “We’re tapping into cutting-edge design expertise in Silicon Valley, prototyping industry applications – from automotive to education services – in Plano and the deep skills in communications protocols and innovation that reside in Israel. Working across centers, innovation can follow the sun with a near 24-hour cycle time for agile development.”

Israel has a strong presence in the health technology and telecommunications fields. Aside from innovation in biomedical devices such as Given Imaging’s Pillcam and InSightec’s ExAblate 2000, one of the most popular health community websites on the web was founded in Israel, iMedix. Israel’s defense industry and the nature of Israelis to be early adopters, especially when it comes to mobile technology, has driven Israel’s telecommunications field. Some leaders in the field include Alvarion, InfoGin, and Radware. Israel has also attracted several multinational companies in the field, including Intel, Cisco and Motorola, to set up facilities in Israel.

The centers will be run from Palo Alto which is considered to be the center of the mobile development world since the success of the iPhone and Android platforms.

AT&T competitor Verizon Wireless recently announced that it will launch its 4G LTE (Long Term Evolution) network in several major US cities by the end of the year. The company is also planning to unveil several new LTE-friendly phones in January 2011. Although Google CEO Eric Schmidt is expected t0 announce the first set of devices, Android ones, on stage, rumors of a Verizon iPhone in 2011 heated up this week with speculation that it might also be debuted then. Considering this new competition and reports that demand for iPhones from AT&T are leveling out, AT&T’s innovation centers announcement comes at a good time and offers significant promise for the network in the future.

Image via closari.

The Jerusalem Business Networking Forum had its monthly meetup earlier this week. Titled “Making Great Start-ups”, the discussion was led by Teddy Nehmad of C-Capital who gave tips on creating a good business that’s attractive to investors and also discussed issues the venture capital industry is currently dealing with. In the clip above Nehmad discusses what the average size of a startup advisory board should be.

When TheFacebook.com launched in the spring semester of my freshman year of college it immediately became all the rage on campus. It was a new way for us to keep in touch with friends from class, the dorms and various clubs and was great for organizing groups and sending messages related to classwork.

It was a closed system open to only a few universities and made us feel special to be part of its exclusiveness. Facebook had a clean design and few features and didn’t seem like a startup that had its sights set high.

Six-and-a-half years later, Facebook is a platform that is open to everyone, has over 500 million active users and is estimated to be worth over $24 billion.

The latest rumors are about when the company will go public, which will probably be in 2012, after the company has acquired more users and CEO and founder Mark Zuckerberg gains more experience.

While it is impressive that Zuckerberg, who is only 26, has been able to grow the company over the years, it is even more impressive that he was able to do so during its most critical early stages without having a business strategy.

Facebook’s success despite its lacking a strategy, along with the successes and failures of other startups, was part of a discussion that took place last night when 40-plus Israeli female entrepreneurs met to discuss how startups can avoid strategic mistakes in the early stages. The event was the latest one organized by Yazamiyot, a business networking forum for Israeli female entrepreneurs, and was led by Yair Snir, a lecturer at the joint MBA program of the Wharton School of Business and the Interdisciplinary Center (IDC).

Yazamiyot members discuss business strategy.

Snir went through the different steps that go into a good strategy (summed up as “Where do we want to get to and how do we want to get there”) and gave examples of successful companies ranging from McDonald’s to Lego. He concluded his presentation by stating that no strategy can guarantee success, to which a stunned participant asked if there’s any conclusive evidence out there for finding out what works.

The answer given last night was no, but one only has to look at Facebook to see that the answer should be yes. In a way. Although the business strategy lays out the long-term plans of a company it is not a one-time thing that you figure out and then lock away in some file cabinet never to return to. As with the rest of the business plan, it is dynamic and needs to be constantly updated based on changes in the industry and market trends. It is a guide to follow but not to the “T”.

To support this, when asked in an interview last year what advice he had for entrepreneurs, Bob Rosenschein, the founder and CEO of Answers.com, responded that entrepreneurs should be flexible. By being flexible, Rosenschein has been able to keep Answers.com afloat through the hard times and to grow it into the successful Top 20 website that it is today.

In the case of Facebook, by morphing over the years and staying attuned to what users want, it has been able to grow at a phenomenal rate.

Even though there is no way to guarantee success from the onset, by constantly doing research and being flexible, entrepreneurs can better ensure the success of their companies.