Israel Venture Capital 2.0

Gemini Round Table - Robert Swerling from Google

Yesterday we hosted another round table event at Gemini. We have done these round tables in the past (Few examples include: Cloud Computing, Future of the Internet, and many many others).

Our main guest today was Robert Swerling, New business development principal at Google. I never met Rob before, but it turned out he is a great guy, with a great sense of humor. He has also been an entrepreneur in the past, so he related to the crowd, which mostly consisted of current Internet entrepreneurs (Or in other words, young and very energetic).

Overall we had a great turnout, with almost 40 people joining us. Robert prepared a nice framework to discuss the current trends and prediction in the web world. I can’t say that what he presented was really new, but it did create an interesting discussion (even debate). The 3 key topics that Robert discussed were, in order of appearance:

1. Mobile Internet, with a key focus on the interoperability of various devices, and the idea that we still did not reveal the true potential of the mobile internet. The discussion was interesting, and some people had interesting ideas on how the handset fragmentation will stop (and reverse it’s trend). Check out @yanivg on Twitter regarding this.
2. e-Commerce, which was the most interesting part of the presentation. Robert spent the past 2 years focusing on e-commerce at Google, so he had a critical view on this industry. To summarize his view, he thinks that e-Commerce is way behind the offline retail. I would tend to agree (Check out the difference between Apple Store offline and online). In any case, we are looking at companies that are innovating in e–commerce
3. Privacy. Robert ignited a very interesting debate regarding the future of privacy. Many people talked about the privacy “paradigm shift”. After all, so much of the information on the younger generation is in the public domain. Still, I am not sure there is a real shift here. It will be interesting to see how the perception of privacy changes over time, especially when these kids grow older.

The "About Us" Section

As part of the venture capitalist, you get to do a lot of research (Due Diligence). You study companies, their competitors, their potential allies, and the overall tech market in general. Through the process I get to read a lot of "About Us" sections, the standard page where companies give their basic description.

Here is my problem - in 95% of the times I can't understand these About Us Sections. It has become so buzz word heavy that it means absolutely nothing to a normal guy.

Here is an example from a company I know (No names):

"... enables clients to create an on-going dialogue with consumers through our robust consumer profiles, dynamic rendering, and multi-network reach. Our Smart program and Intelligent technology services enable clients to easily create an on-going dialog with high-value customers and prospects yielding a strong ROI for their business - we prove our value on every campaign..."

Do you understand what they do? beyond their award winning, amazing, great, useful technology, what do they really do?

Scott Roth from Exact Target has an excellent post requesting a new world, a buzzword-free world. I am all for it. It's all the desire for a simple to understand "About Us" sections.

Tech Aviv

Just before I traveled to Israel for a week (I am finally back), I had the pleasure to participate (and also be a small sponsor) of the first California Tech Aviv meeting.

Tech Aviv was started by Yaron Samid (Founder of Pando). His idea is to organize a monthly meeting for Israeli entrepreneurs and CEOs and through that develop a strong network of Israeli high-tech executives. Overall he is trying to fill a real void - The Israeli startups are competeing in a growing competitieve environment, and any help they can get from one another can be valuable. In his own words:

"TechAviv is an invitation-only global organization of leading Israeli hi-tech startups and investors gather monthly in Israel (IDC), New York (NYU), Silicon Valley (Stanford) and showcase, discuss and help fellow Israeli startups Each month members demo their products and engage in bi-directional Q&A with local peers. Casual networking happens before and after the demos. Our mission is to leverage our collective
experience and contacts to help fellow Israeli startups succeed worldwide. Together we’re building a powerful global support system."

In the Meetup that I attended, 3 companies presented: High Gear Media, Gigya, and Metacafe. The discussion was interesting and raised some interesting questions. Beyond that, Yaron asked members of the group to leverage their respective networks and help other members in their hiring process. Finally, there was plenty of time for networking (and Pizza).

Next California Meetup is toward the end of March. I will definitely be there.

Reversim - A Podcast for Developers

Are you an Israeli Developer? In other words, as Ori & Ran call it - are you part of the "Hebrew Association of Software Engineers"? (I wonder if such an association exists...)

Anyway, if you don't know, Ori Lahav is a co-founder & CTO at Outbrain (a Gemini portfolio company), based in Israel, and is working on the technology side of the company. Ran Tavori is a technology expert working for Google in Haifa. Together they launched a new podcast, in Hebrew, focused on technology and developers. In other words, the ultimate Hebrew geek show.

The podcast is located here, and it's called "Reverse with a Platform".

I have left the programming world more than 10 years ago, but I did listen to a couple of their episodes and they are interesting and helpful. For example, try episode 3 about the thin client: Funny, interesting and I even learned something.

I hope that one day I will have the pleasure of participating, although I a guarantee I can't say anything about TDD, or Hadoop.

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.

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.

A partial summary of CES (Consumer Electronics Show)

Last Friday I took a quick roundtrip trip to Las Vegas and spent the day at CES. It was a quick trip, and I probably missed most of the action at the show, but still, I thought it will be great to summarize my takeaways, as partial as they may be.

In general, I came to CES with low expectations. My previous CES visit was in 2005, so that was my point of reference. Everyone promised me a "slow and quiet" show. I guess it's all relative. Compared to 2005, it was just as loud, packed, and huge. I guess I skipped/missed the crazy years of 2007-8.

So many people wrote about the various themes of CES (read more on Venture Beat). I can only repeat some of these themes. The 2 big ones, from what I saw, were the following:

1. 3D is happening. Similar to HDTV a few years back, 3D is gaining momentum from the TV manufactures and from the content providers. All the big companies showed various technologies around 3D, with various options (with/without glasses, with/without original 3D content). Overall, it seems that we are getting closer to the 3D images (similar to Minority report). The one big question in my mind - Does this provide an opportunity to VCs? So far, I can't see how startups will make money in the emerging 3D trend. (Check the excellent post on Venture Beat on this topic)
2. The connected TV. I have personally complained about the non-connectivity of my consumer electronic devices. Apparently, someone was listening. It was amazing how many TVs had Internet connectivity, enabling seamless integration to Youtube, and other video websites. I need to think about my wish for 2010 (folding displays?)

Beyond trends, I focused my time on 2 big companies. I spent a few hours at the (impressive) Microsoft booth. It was a nice show of the Microsoft consumer offering, with products ranging from Zune, through xBox and all the versions of Windows. Judging from the crowd's interest, nobody cares about the Zune (The booth was always empty), and everyone wants to learn more about Windows 7.

The most important gimmick at the Microsoft booth was the Microsoft enabled car (It's called Sync). If you haven't seen it check this video here. Microsoft is handling the driving interface (Music, directions, etc.), and not the "mission critical parts", but still, I get nervous thinking about a blue screen in my Toyota.

Beyond Microsoft, I was very impressed with the Samsung booth. 4 years ago, they were the powerhouse of CES with a huge booth. 4 years later, it was 10x bigger. Samsung seems to be the tech leader of the worlds (seriously). They showcased offerings in every category, including some very impressive large screen TVs, and beautiful LED based thin displays. Together with LG, it seems Korea is dominating the CE world.

Finally, a word about Israel. There were some cool Israeli related companies at the Sands, but overall, it seems that Israel has a long way to go before we can have mainstream CE products. At this point, we are much better in providing components and software. We should make sure that we continue to excel in those categories.

Web 3.0 is Coming?

Since the emergence of Web 2.0 in 2005, there was a debate on the definition of Web 2.0. There are various definition, on O'Reilly, Techcrunch, and also on Wikipedia. But I have a different definition. I think it's all about time gaps.

Web 1.0 was pre-bubble. From the emergence of the Web in 1994/5 to the huge collapse of March 2001. Clearly, there was a common thread to those companies (They do look very different than today), but it was part of evolution. After the bubble burst, investors walked away from the Internet space. Being an Internet investor was a huge no-no. With the investors, the entrepreneurs also left the space. But the users didn't, They continued to spend more and more time online, consuming and creating content, and also sharing content (mostly music and text on forums).

Web 2.0 emerged after the gap between 2001 and somewhere in 2004. With a clear time difference between the 2000 investments and the 2004 investments, it was easy to define the new generation as 2.0. Surely, these companies were different - after all, the users continued to evolve, so there was a lot to learn from. BTW - Some of the companies were the same as before. There are a few examples of "Web 2.0" companies that were created in 98/99 but were too early for the users (Israeli examples include EarthNoise, a YouTube like company, and also Contact.com, an early version of Plaxo).

So, what is Web 3.0? If Internet investing is going to stop, and if a gap in time will appear, we will see a whole new generation of companies appear in 2-3 years. Those companies will be different than the companies of 2005/6 because they will have the ability to learn from the changing investment criteria, but also from the evolving user behavior (The users are definitely here to stay, and their usage will continue to evolve). Web 3.0 has an official definition (Like the one on Wikipedia, based on The New York Times). But still, a more business description will probably focus on some key attributes:

1. Bootstrapped. As Internet seed is becoming really hard, we will see more companies that will develop on their time and cash.
2. Limited infrastructure. Usage of everything in the cloud infrastructure. Size matters, and Amazon has that size (and technology).
3. Beyond Advertising. I am still a big believer in advertising, but not every property can be monetized effectively. This is where the real future lies. How to you leverage engagement to turn on sales and sponsorships.
4. Cross Platform. Even at Commtouch, back in 1999, we developed online web email combined with mobile presence. But back then it was a joke. The future lies in unified interaction. Connected, integrated, high quality experience with the product on web, mobile, client, and TV. I am still amazed how bad is my mobile experience with some web properties that are so important to me (Linkedin! Typepad! Viigo!)

But then again, as seen below, who cares about all this.

The future of my music collection

In the past 20 years I have built a nice music collection. A lot of CDs, tapes, albums, and online music. All now represented in about 40GB of music. I still consume it in all formats (Even cassettes sometimes...), but mostly on my iTunes/iPod (Usually when running and when traveling). So far so good.

But lately, I am starting to get frustrated with the level of understanding/interaction I have with my own music collection. There are great technologies out there that help me find music that I may like (of course, there is a business model in that). Those include Pandora, Last.fm, and even Amazon.

But I am looking for something different. I want a technology that will help me discover and understand my own music collection. Apple recently launched Genius, which is a first step in that direction. The problem is that Genius is very predictable. I pick a Led Zeppelin song, and it doesn't matter what song, I get the same suggestions: Jumping Jack Flash by the Stones, Highway Star by Deep Purple. I don't need to be a Genius to do that.

So here are the 3 elements I want from my iPod in the future:

1. True (Business) Intelligence: What do I listen to? Not only the songs, but Genres, Albums, Artists. In what songs do stick till the end, and what songs do I skip? All that information is there. I want it.
2. True Discovery. What are some songs that I ALREADY HAVE, and that are left behind? Based on what I listen to, what songs I may actually enjoy (and are a bit less obvious than Light my Fire by the Doors).
3. And finally, a bit unrelated, Additional information on the Albums (and the bands). Can't I have on my iPod a bit of information (from Wikipedia?) on the band and the album? Here is an example. I started listening to the Silos. To be honest, I know nothing about them (I do own the album). Some local information would have been great, and would have helped me engage more in listening to the music.

Anybody interested to take the these ideas and implement them? Maybe there is a business there... The only company I know that is somewhere in the area is TuneUp. Maybe they will add what I want.