Made in Jerusalem

Jerusalem's resurgent start-up scene is full of undiscovered treasures – hundreds of energetic and colorful founders and young companies pursuing dreams of entrepreneurial success. Sprinkled among these nascent ventures are a handful of companies that have actually achieved what venture capitalists call “traction” – commercial or scalable usage of their product or service in the broader market. One of them, with a bustling office tucked in the heart of Givat Shaul, is Vernet Technologies, the Israel R&D subsidiary of two US-based technology ventures, Networx Systems and HomeTalk, both founded by the same four partners. Networx, established in 2004, connects consumers to screened contractors in the home and garden sphere. The company has matched over 2.5 million homeowners and contractors for home improvement jobs in the US. After a few years of activity, the Networx team identified a new opportunity in the field and created Home- Talk, a start-up-within-a-start-up. HomeTalk, based in New York City, serves as a global knowledge hub and online marketplace for do-it-yourself home and garden enhancement projects. With a dynamic, engaged community of six million unique users each month, it provides a robust platform on which homeowners, bloggers and professionals share DIY projects, ask questions, inspire and become inspired. In fact, “Hometalkers” appear regularly in national and regional media such as NBC's Today Show, Fox's Fox and Friends, House Beautiful and many others. The companies have 120 employees in offices in Atlanta, New York City and Jerusalem. Vernet, the Jerusalem subsidiary, with 56 employees, plays an important part in the group's product development activities. It is managed by one of the group's founders, Yaron Ben-Shaul, a tech industry veteran with over 20 years of start-up experience. After establishing a successful start-up in New York City in the late 1990s, Ben-Shaul helped found Networx before returning to Israel to raise a family and manage Vernet. The Networx/HomeTalk/Vernet group is unique in that the companies are “bootstrapped,” a term used in hi-tech to denote companies financed with internal resources rather than venture capital. Members of the founding team believed they needed to (and could) build a business with their own capital that would quickly support itself. That is precisely what they did, a rare feat in an industry where innovative ventures are typically financed by outside capital. After years of developing Networx and marketing its services, the group identified a consumer DIY marketplace opportunity and invested cash generated from Networx to create HomeTalk, once again using the Jerusalem-based Vernet team to assist in developing the platform. Ben-Shaul will not publicly comment on the company's finances, but it's fairly easy to surmise that the group must be doing something right if it can support 120 employees on multiple continents on the strength of its revenues and profits. And the growth is far from over – he insists that the company is aggressively seeking to expand. “As we scale to new heights, we plan to double the workforce over the course of the year – and we would love to meet top, local talent,” he says. Ben-Shaul is extremely proud of the diversity in Vernet's Givat Shaul office, which reflects the “melting pot” that is Jerusalem. The company's 56 employees hail from Israel, the US, France, Russia, Canada, Chile, Brazil, Mexico, Holland and Gibraltar. Over half are American olim, and many are haredim, thriving in an environment of cultural diversity and mutual respect. Ben-Shaul states that this unique employee pool is what drew the team to establish its Israel operations in the capital. “Jerusalem candidates bring quality, long-term commitment and English language skills, which we found to be instrumental in terms of communication with the US team and understanding of the product, as we are an American company,” he says. Scaling an office in Jerusalem is not without its challenges. Ben-Shaul notes that Vernet has found it difficult to expand its office space as the company grows, and he wonders aloud whether a Jerusalem-based company can successfully grow from tens of employees to hundreds. The company optimistically hopes to put this to the test with an aggressive expansion plan for its; past Jerusalem successes like NDS and Mobileye can potentially serve as examples of “made in Jerusalem” start-up-to-scale growth models. Ben-Shaul's sights are trained not only on his own company's growth, but on the explosive growth of the Jerusalem start-up scene in general, and he says his company is committed to supporting this growth any way it can. “For many years, we have been exclusively focused on our product and US-based demographic,” he says. “Recently, we realized that Jerusalem's tech ecosystem is dynamic and familial – and we want to help it continue to flourish.” Moe Mernick, head of business development at HomeTalk, appeared on stage last week at a MadeinJLM-sponsored community event showcasing Jerusalem start-ups that have achieved customer traction. He shared his company's story and strategies with younger start-up founders. He adds that he is committed to further support for the MadeinJLM eco-system: In addition to serving as mentors at local accelerators, Ben- Shaul and his partners are considering partnering with and investing in local start-ups. “Having built two successful start-ups, we feel that there is a lot we can contribute – and we are excited to do so,” Ben-Shaul enthused. The writer is the managing partner of Jerusalem- based venture capital fund Jumpspeed Ventures and a board member of MadeinJLM. For more information about the MadeinJLM start-up eco-system, go to www.madeinjlm.org.

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