Israel Venture Capital 2.0

Competing with Google on talent

I found this little ad (below) in one of the Stanford newspapers. I thought it's interesting how a company is trying to compete with Google by positioning the great food and the perks (that make you stay longer hours...) as a negative. Not sure it's effective, but it did catch my attention.

10 Years ago, the newspapers in Israel were filled with job listings for high-tech. Companies were innovating in making bigger, funnier, sexier ads. All that went away and now all job opportunities are posted on the net and through job sites. Maybe, in a weird contradictory way, you can get access to talent by re-trying old world methods.

One final comment - it seems that even in this downturn, it's still hard to get good engineering talent. It's actually even harder than in the past, as companies are being extra careful making sure their real stars stay on board.

Great acquisitions are not (just) about financial returns

The "exit" is a key parameter in our industry. Through the years, I found that word to be a bit misleading. On one hand, it's all about "exiting" the business and making a profit, on the the other hand the business itself (if successful) never "exits". The ball  moves on to someone else, who thinks he can move it forward to be even more successful.

In other words, and this is obvious, our "exit" is someone else's "entrance".

Why am I writing about this now? When I joined this industry, there were a lot of stories about successful financial exits that turned out to be unsuccessful assets for the buyer. Examples may include Chromatis that was a Great $4.7bn exit and later shut down by Lucent, and Gemini's Precise that went public in 2000, sold to Veritas in 2002, but later spun out to Vector capital in 2008.

However, this seems to be changing. In the past few weeks I have heard of several Israeli start-ups that were bought by large US companies, and are doing very well post M&A. Examples include some Gemini companies like Diligent (Acquired by IBM) and Itemfield (Acquired by Informatica) in addition to non-Gemini companies like Onaro (Acquired by Netapp), and Kashya (Acquired by EMC). All these companies are substantially growing their revenues inside their new homes.

Like many other businesses, the VC success is based on "repeat business". You want invest in entrepreneurs that were successful with you, and you want to sell companies to acquirers that were successful with start-ups that they bought from you in the past.

In summary - Great post M&A achievements are a crucial part of a successful VC story.

Outbrain - B Round

Outbrain, a Gemini portfolio company, announced today the completion of a B round. The $12M round was lead by Carmel Ventures. Lightspeed, Gemini and Glenrock also participated. Here is the direct quote from Shlomo Dovrat, who is joining the board from Carmel:

"The amount of content published online is exploding. Finding great content is getting both more difficult and more important. Outbrain provides web publishers with a turn-key, intelligent recommendation service that drives back significant traffic. Outbrain’s personalized recommended links offer great value to readers by combining their collective wisdom and using unique algorithms. We're excited to partner with Outbrain’s experienced founding team and help them build a great company".

I couldn't agree more. Outbrain provides a great product for the publishers (Increased traffic) and the users (Access to improved content). I does that by promoting most relevant and personalized articles, making the consumption of written content easier and more enjoyable.

Since we invested in Outbrain they have grown dramatically, adding more and more publishers, and reaching a larger audience. Personally, I think their success is based on excellent execution, but also because of the company's strong focus on generating real value to all parties in the value chain.

This round is just the beginning for Outbrain 2009. There are some great plans ahead of us, and as Shlomo Dovrat said, it's all part of building a great company. 

More on this round on Venture Beat, The Inquisitr and CenterNetworks. 

 

Super Bowl - The Advertising holiday (Part 2)

Super Bowl is over, and it was a good game. the first 3 quarters were truly boring, and the ending was amazing. Still, it wasn't as engaging as last year (when my beloved Patriots played).

On the commercial side, it was clearly a "different" year. Many many movie trailers, and NO American cars. How can you enjoy a Super Bowl without Chevy (and specifically trucks).

I enjoyed the Conan O'Brien Bud light commercial, and also the Doritos Crystal Ball. But my favorite was the Pepsi "Refresh Anthem". If you haven't seen it yet, you can see it now.

Super Bowl - The Advertising holiday

It's Super Bowl time, a true sports holiday. Although I am not as excited as last year (the Pats didn't make the playoffs), I am already counting the hours till the game. On the sports side, I am totally for Arizona, mostly because of an old dislike to the Steelers (Goes way back to 1978), and also because of the true love to Warner the underdog.

But beyond the football, it's the advertising holiday - A time when the best (and most expensive ads are shown). If you want to enjoy all of these ads, go to Adland, for the full Super Bowl commercial archive. Many of them are great, and have become legendary in their own right. Check out rate MSNBC for the best Super Bowl ads of all time.

I personally think that each one of us is obliged to name his own 3 favorite Super Bowl ads. It's like naming your 3 all time favorite Rock bands. Below are my 3 favorites:

1. Apple - the 1984 Commercial for the Mac. Probably the most famous Super Bowl ads ever made has just celebrated 25 years. 25 years after it's one and only broadcast it's still a real masterpiece. Check Wikipedia for the story behind this commercial.

2. McDonalds - The Showdown. In this 1993 McDonalds commercial, Larry Bird and Michael Jordan compete in a series of progressively more ridiculous hoop-shooting contests. Every aspect of my life in the 90's is shown in this short commercial: The constant crave for junk food (McDonalds opened in Israel in 1993) while watching our NBA heroes play at 1AM Israel time. I guess a more modern version will include Lebron James play Kobe Bryant for a healthy hybrid salad.

3. Pets.com - Please don't go. Probably not the best ad of all time, it's the one that symbolizes the rise and fall of the Internet Bubble. There were a few Web 1.0 Super Bowl ads (eTrade, Pets.com, Netpliance, Computer.com). When web 2.0 emerged, companies didn't make that same mistake again. Instead startups spent their advertising money on Google. I actually think that SEM became less effective as well, so for Web 3.0 we will probably see new kinds of promotion strategies.

What about an Israeli perspective? As far as I know, there was never an Israeli related commercial that was aired during the Super Bowl (let me know if I am wrong). But - many Israeli companies and technologies participated in the various Super Bowls. Check MobileAccess networks, New Age Security, and Radvision.