Peres Peace House.
(photo credit: Hanoch Grizitzky)
A smorgasbord of technical innovations accompanied the smorgasbord of snacks at
the recent Innovation Marathon at the Peres Peace House in Jaffa. Hosting the
two-day conference was Bootcamp Ventures (BCV), a global innovation platform
that specializes in assisting emerging start-ups in becoming full-fledged
businesses. The goal of the marathon was to match up some 34 Israeli start-up
companies that have developed game-changing technology, with investors and
partners from 15 countries.
Big names from the business world attended
the event, including Matt Marshall, the editor-in-chief of the online technology
magazine VentureBeat, and Ed Mlavsky, chairman emeritus of Gemini Israel Funds
and widely regarded as one of the founding fathers of Israeli hitech and venture
capital industries. Also taking part in the event’s discussion panels were
representatives from wellknown corporations like Motorola and
With more companies listed on NASDAQ than any other country,
Israel boasts the title of being the world’s foremost start-up nation. The
Innovation Marathon provided the opportunity for young Israeli entrepreneurs to
present their technological brainchildren in the hopes of attracting foreign
SOME OF the more titillating technologies included a smart phone
app for snorers that monitors sleep patterns, a completely interactive app for
digital children’s books, and an app called “magic mirror” that lends another
dimension to retail therapy by providing shoppers with a 360º image of
themselves trying on an item of clothing.
One presenter who captured the
imagination of the sports enthusiasts in the room promised that his app would
spearhead a transition from fans as mere spectators dependent on the whim of
sports channels like ESPN, to fans who are in complete control of the sporting
content they want to see. For example, type in “Messi dribble,” and at the
proverbial click of a button (for the most part, smart phones are touch-screen)
the app will provide a catalog of video clips showcasing footballer Lionel
Messi’s famous footwork.
Less exciting but perhaps more pragmatic is
Ridefrog, an Israeli carpooling start-up that is already in its beta stage in
the US. The idea behind it is so simple, it almost defies logic that it wasn’t
invented earlier. Ridefrog is integrated into Facebook events so people
attending the same wedding or party can carpool.
Not only does the app
have financial and environmental benefits, it boosts people’s social lives by
allowing them to meet new people and make journeys more
Ophir Reshef, the CEO and co-founder of Ridefrog, says that
sitting in traffic was what motivated the idea. “You see all these empty cars on
the road and it’s government to do something about it.”
While actual, tangible inventions
are giving way to virtual apps and social networking tools, they’re not extinct
just yet. One example at the conference was a footballsized pod that measures
air pollution. Irad Kuhnreich, the man behind Airbase Systems, says the pod
provides an answer to the basic question of what exactly is in the air that we
“You know what you eat and you know what you drink, but you
don’t know what you’re breathing,” he says. “Whereas nowadays, only governments
use air-quality monitoring systems, we’re hoping to change this by bringing it
to the consumer.”
The device measures pollutants in the air at any given
time and even tells you when to stay indoors and what to do to avoid peak
pollution hot spots.
Despite the diversity of the innovations,
user-centricity seemed to be the common theme among all of them. Whether in the
field of clean-tech, medical or entertainment, the user is fast becoming the
sole controller of how he or she wants to use the product. As one young
entrepreneur from the health-tech industry says, “Apps are being created that
essentially turn cellphone users into doctors. They are selfdiagnosing, and it
won’t be long before conventional practices, such as visiting a doctor for every
small ailment, will be a thing of the past.”
So what are some of the
elements that attract foreign financiers to invest in Israeli start-ups?
According to Mlavsky, loyalty and perseverance are two key qualities inherent in
Israel’s innovation prowess.
“As a group, Israelis are a hell of a lot
more effective than other groups,” he says.
“They are extremely loyal to
fellow employees as well as to the company. As such, they can accomplish any
tech task – be it in physics, optics or system design – more
Not to mention that they are workaholics.”
coined the term “falafel factor” to sum up the Israeli advantage.
falafel factor is comprised of three character traits: smarts, chutzpah and the
refusal to give up. A working definition of chutzpah is a young man who murders
his parents and then goes on to claim orphan benefits from the government,” he
According to Mlavsky, because Israelis are not overwhelmed by
much, their commitment doesn’t run out at the first sign of trouble. This is all
part of the country’s national character. Being in a warlike atmosphere means
that sabras are more equipped to deal with critical needs in
Add this to the familial factor, and you’ve got a winning
formula for success.
The familial factor is evident in a variety of ways:
Employees might have kids in the same kindergarten, or they may have been in the
same army unit.
Thomas Hoegh, the founder and CEO of Arts Alliance
Ventures, is an artist and entrepreneur who has been investing in Israeli
companies for years. While he agrees that the camaraderie ethic cultivated in
the army contributes to Israeli successes, he is quick to add that it also has
“If you haven’t been in the right army unit, you’re not
part of the club,” he says.
“This sometimes makes it difficult to work
with Israeli companies. They might not be interested in bringing in a
The fact that everyone is trained in the same way is
another limitation of the army culture.”
Cesare Maifredi, investment
manager at 360° Capital, avers that certain factors in Israel – such as
government stipends for new businesses – nurture the Jewish state’s
entrepreneurial mind-set. Other countries, like Maifredi’s native Italy, simply
lack that mind-set, and the subject of entrepreneurship is never discussed, even
“It’s a question of stability versus the willingness to
take risks,” he says. “While in Italy, people are more interested in the
security of having a full-time job in a corporation, in Israel it’s cool to be
But he also laments the Israeli tendency to be
clique-y. “At a certain point, you need to be open to new people and new
Companies here are made up 100 percent of Israeli people. If
your end market is foreign, you must have local people in the company, and
Israelis are often opposed to this idea.”
ISRAELI STUBBORNNESS extends to
other fields too, including market research.
Hoegh admits that the
Israeli talent base is extraordinary, but that it consists mainly of people who
are pragmatic and mathematical and who have little time or use for
“They’re not as good in marketing and design,” he says.
“Israel has an abundance of clever technologists, but they aren’t particularly
keen to listen to what the market wants. Instead, they have a vision about what
the customer should want and are offended if the customer says otherwise!” Hoegh
says there is a finite pool of talented people in Israel and that many of the
big companies, such as Google and Microsoft, will suck that talent in. In order
to curb this trend and scale the talent, he believes, Israeli startups will be
forced to start looking elsewhere – and not just overseas.
fantastic growth potential in the Arab sector, and the synergy should start
there,” he says.
Dan Stone, the vice president of strategy and corporate
development at Lenovo, believes that Israeli tech is far too
“They’re missing some crucial points,” he says, “Like the fact
that more smart phones are sold in emerging markets than they are in the West.
In fact, people are even willing to pay more in those markets than some of the
Stone recommends that Israeli innovators spend more time
catering to international markets such as India and China. “In those places,
you’re addressing over a billion people at once and they’re all speaking the
same language, so it’s a lot more efficient.”
Nazmin Alani is the
director of the Business Development Bank of Canada, a financial institution
that acts as a complementary lender in the marketplace by taking on higher risk
of capital investment than conventional banks. It was Alani’s first time in
Israel, and he was astonished by the collaboration capabilities of Israelis in
“The market and talent here is just as credible as Silicon
Valley,” he says. “I only ask why you can’t export Israeli talent to the rest of
the world. From an entrepreneurial perspective, it makes sense to leave Israel
and go to bigger markets. But then, why would you leave? Tel Aviv is paradise.”
Eric Berger contributed to this article.