Israel Innovation 2.0

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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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2009: Sarah Lacy and the Israeli Web Revisited

Nine months ago there was talk and speculation that Israel’s Web sector was done and not likely to recover. Mainly expressed by TechCrunch editor-at-large Sarah Lacy after her visit to Israel in March, at the time she wrote about her disappointment with Israeli Web startups except for MyHeritage and a few others. Her piece caused an uproar among Israelis on Twitter and in the blogosphere, including on Israel Innovation 2.0.

At the time Lacy wasn’t completely off. It had been a while since an Israeli Web startup had a big exit or received a large investment or a lot of media attention. Combining this with the poor economy and the rise of Israel’s cleantech sector (which continues to grow), it seemed that Israeli innovation in the Web space had peaked when Shopping.com was purchased by eBay in 2005.

By September of this year though it became clear that 2009 was actually the resurrection of Israel’s Web industry and that Israeli entrepreneurs did not lose their mojo as Lacy had suggested they did. At TechCrunch50 in San Francisco Israeli startups Trollim, Red Beacon and AnyClip received the three top prizes for their promising technologies. A few weeks later in October, it was revealed that Answers.com, perhaps the most memorable Israeli site to have survived the dot.com bust and to thrive, was the 13th most visited Website in September.

In addition to these sites, the second half of 2009 saw the rise of another part of Israel’s Web industry, Facebook and mobile applications. In November the Facebook facial-recognition application Face.com went live and in December the community-generated traffic tracking mobile application Waze started to make headway in the U.S. market, among other regions.

While most of these companies still need to prove themselves (with growth, revenue and exits…) it is clear that there is a new drive among Israeli Web entrepreneurs and Israel’s Web industry is reemerging. 2010 will be an interesting year to see what happens to these startups and if the newfound mojo will reverse the investment decline of recent years in the sector.

Editor’s note: This was originally posted on TechAviv.com.

techaviv_logoSince I attended TechAviv two weeks ago, in which nearly half the startups there were early stage and pre-seed, I have been thinking a lot about the discussions on getting funded that took place there and earlier that day at Eze Vidra’s VC Cafe breakfast and in general.

It has been clear for several months now that VCs are being more conservative in choosing companies to fund and that those that do get funding, are generally receiving less than they would have in good times. Additionally, somewhere along the way in the past few years, VCs have become more concerned with the capital aspect of what they do which has led them to invest in fewer “ventures.” They are taking less risks, such as by not investing in ideas, and are looking more for “ventures” that have already proven themselves a little – in many cases, by already becoming profitable or developing the technology. Whether this is good or bad, it’s just the way it is.

Since an angel investor panel, which included Yossi Vardi, at TechCrunch50 in September 2008 discussed what the decrease in VC funding would mean for them, I have constantly heralded angel investments as an alternative to VC funding and one that would still thrive… then the stock market and economy crashed. While that was already a few months ago, The New York Times had an article earlier this month titled, Angels Flee From Tech Start-Ups, about how bad it has really been and is for them. 

So, hypothetically removing VCs and Angels from the startup funding equation, what other sources of funding are there in Israel? For more established startups, close to nothing. 

For small startups and individuals though, here is a list of nine alternative funding programs:

  1. Israel Internet Society Research Grants
  2. US-Israel Binational Industrial R&D Foundation (BIRD)
  3. US-Israel Binational Science Foundation (BSF)
  4. Intel-Annual Research Grants Program
  5. Technion Research and Development Foundation
  6. Israel Science Foundation
  7. Incubators (Ministry of Industry, Trade and Labor Office of the Chief Scientist)
  8. Call for proposals (Israel Ministry of Science, Culture and Sport)
  9. Yozma Group

sni-2

During the week of February 1, 2009, SemantiNet released a Beta version of its FireFox add-on, Headup to the public and Shai Agassi talked electric cars at TED. Commtouch partnered with MailChannels and promising Israeli startups presented their technologies at the TechAviv meetup in Herziliyya. For these stories and more, check  below for the 13 Israel-related headlines from the week of February 1, 2009. 

Cleantech

1. Israeli startup grabs $5M for distributed solar thermal

2. Shai Agassi talks electric cars at TED

3. I’m Twittering Over Water In Jerusalem

Investment and Economy

4. Local hi-tech companies raise 27% less venture capital

5. Billions flow between Israel, Silicon Valley

6. Some Amazing New Startups (TechAviv)

Information Technology

7. New technology synopsizes video surveillance

8. MailChannels And CommTouch To Bring Premium Spam Filtering To Parrallels Plesk Panel

9. New technology synopsizes video surveillance

10. SemantiNet Announces headup Semantic Web Plugin for Firefox is Immediately Available as Public Beta

Miscellaneous

11. Why I’m heading back to the US

12.  Wanted: Work

13. An Improved Economic Outlook and Low Interest Rates Are Increasing the IT Spending In Israel states New Report

sni-2

During the week of of January 4, 2008, aside from the escalation of Israel’s operation in Gaza and more attacks on Israeli websites, one of the biggest stories in the tech world was the launch of Israel-based Ctera’s new storage device. Another was that Israel issued its first solar licenses for solar power plants. Despite the poor economic and VC investment outlooks, at least three Israeli companies (including Ctera) announced they raised funds. There was also news of an imminent Aladdin sale that sent its stocks rocketing. For these stories and more, you can view this week’s 15 Israel-related headlines below.

Israel-Hamas Conflict (Technology side)

1. Israel-Gaza Conflict Spills Over Into Twitter

2. Hackers Take the Fight Over Gaza Online

3. Digital World: How to beat anti-Israel hackers at their own game

4. Spam poses as CNN story about Israel-Hamas conflict

Cleantech

5. Israel issues first solar licenses

6. Cleantech Investment Slowdown Predicted in 2009

Investments

7. SundaySky Secures First Institutional Round of $8 million from Carmel Ventures and Globespan Capital Partners

8. TraderTools Raises $7.5 Million

Information Technology

9. Aladdin shares surge on report company sale is near

10. Start-up Ctera will offer cloud storage through carriers

11. Save Mart Supermarkets Deploys Integrated Retalix Supply Chain Software

12. Gigya: December 23rd Was Biggest Day For Our Widgets, Ever

Miscellaneous

13. Freeverse Announces Slot Car Racing Game for IPhone

14. Eyes in the sky

15. Fish memories underestimated

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Why TechAviv and technology in general lacks women (Part 1)

techaviv_logoTechAviv, a global group for hi-tech Israeli entrepreneurs, had its first meeting of 2009 at the Inter-Disciplinary College (IDC) in Herzilyya last night. During the event, which was only open to Israeli entrepreneurs, representatives from Outbrain, 2Pad and Boxee spoke about their companies. The event was streamed live over the Internet on the TechAviv website. Watching part of the event online, the most interesting thing for me was noticing that out of all who attended the event, there was not one woman in the audience.

Sadly, this isn’t very surprising. Of the hundreds of Israeli companies that I have become familiar with in the past year and a half, the only company that I can think of that was started by a woman is eSnips (founded by Yael Elish and her then-husband). This isn’t just in Israel though and it’s not limited to just women starting companies in technology.

I started planning this entry back in November after Charlene Li, the former Forrester Senior Analyst, posted on her blog about the shortage of women speakers at technology industry events. (In it she mentioned that though there are few women in tech to begin with, there are fewer women who can make the time commitments required for conferences due to familial responsibility.)

My intention at the time was to answer the questions, “Where are the women?” “Why aren’t women in hi-tech?” and “Are women less innovative than men?” Questions that were also brought up today on Twitter in an interesting discussion between @TechAviv (Yaron Samid), @OurielOhayon, @israluv (Ahuvah Berger) and others about the lack of female entrepreneurs in Israel in relation to last night’s event.

The following are a few ideas based on what I found when I did preliminary research a few months ago on these topics.

Regarding the last question first, statistically it would certainly appear that men are more innovative than women. Go to any conference (in the United States) on technology and there will be few women speakers and only a few more in the audience. The biggest female entrepreneur in tech that comes to my mind is Arianna Huffington of the Huffington Post, while when I think of men, several come to mind (Steve Jobs for example). In Israel, though Yael Elish is the only female tech entrepreneur I can think of, two of the biggest bloggers/consultants I can think of in the Web 2.0 space, are female: Ayelet Noff of Blonde 2.0 and Orli Yakuel of Go2Web2.

 

Steve Jobs

Steve Jobs

 

In an online search I conducted on major scientific breakthroughs of the past 200 years that were made by women, About.com seemed to have the best list that was solely of female inventors. It includes:

  • Randice-Lisa Altschul (invented the world’s first disposable cell phone)
  • Mary Anderson (invented the windshield wiper)
  • Marie Curie (discovered radium and furthered x-ray technology)
  • Ada Lovelace (wrote a scientific paper in 1843 that anticipated the development of computer software artificial intelligence and computer music)
  • Krisztina Holly (Co-invented the telephony software called Visual Voice) 
  • and Bette Nesmith Graham (invented liquid paper, also known as White-Out™).

In addition, the CS (computer science) department at Yale University has a list of women who contributed to CS that includes:

  • Alexandra Illmer Forsythe (During the 1960′s and 1970′s, she co-authored a series of textbooks on computer science, published by Wiley & Sons and Academic Press, including the first textbook written in CS.)
  • Erna Schneider Hoover (She invented a computerized switching system for telephone traffic, to replace existing hard-wired, mechanical switching equipment. For this ground-breaking achievement — the principles of which are still used today — she was awarded one of the first software patents ever issued in 1971 ). 

From these lists, it is clear that women too have invented things throughout the past 200 years, but not in significant numbers and none at the level of fame or being as prolific as men such as Thomas Edison, Eli Whitney or Henry Ford.

 

Ford Model T

Ford Model T

 

Since the 1990s, psychologists have conducted several research studies on what the reasons are for why there are fewer female innovators than male ones.

One reason psychologists have found is that women perform lower in math when conscious of gender stereotypes and get turned off that way. Another study explains that young women tend to avoid careers in math, science and engineering “because they view science as a solitary rather than a social occupation” and uninteresting. Instead many are in public relations, education and psychology. The main theory that has been presented in recent years is based on the amount of confidence given by parents and teachers in these areas- “the self-confidence instilled by parents and teachers is more important for young girls learning math and science than their initial interest.”

Now that there is proof that males and females have equal cognitive abilities for math, incentives and programs are more actively being put in place to change female perceptions and stimulate more interest among them in math and science. Through these there should be changes seen in the near future of a new generation of new generation female inventors/entrepreneurs. 

Regarding what can be done in Israel, going back to the TechAviv and the Twitter discussion, Yaron Samid suggested that Israeli entrepreneurs start an Israeli female entrepreneur group. I think going beyond that group, a national program or wider organization should be created that nurtures women’s interest in science from at least high school age and provides resources to them and older women.

What do you think should be done in Israel?

Update: January 11, 2009 – Joel Katz has notified me that in a video taken by Oren Todoros of SeoVice at TechAviv last week, there are at least two women. You can view the video on seovice.com.