=============== Israel 2.0 ===============

Outstanding Management Team

2010-04-30T03:04:00.000+03:00

We invested in a company about a year ago and now it is going into another round of fund raising. It is the hot deal of the year and it is obvious that the investors will be lining up. The strategy is to choose from amongst them, the most suitable partners, i.e. those that are desperate enough to be willing to pay any sum and at any cost. I enter the office and find a note, while I was idling my time away (I need to tell Dikla to stop treating my business lunches with disrespect) Avivit, a vigorous investment manager of a leading and well known venture capital fund, was looking for me. After the customary congratulations (they have just completed another amazing exit, damn it), she begins stiffly.

"OK, listen here. We met with this company of yours a few times and the truth is that the whole deal is border-line for us", she delivers her opening statement.

"I'm listening to you attentively" I say respectfully.

"So here it is: Technology OK, interesting market, some negligible beginnings with customers, but all this is rather rudimentary. It is very obvious that you have invested amateurishly and did not check as required. And now you are stuck. As good partners we are of course willing to help, but it has to be clear - we are talking about a down round and probably your complete wash-out. As you know, we like to be fair." There is no point in answering, so I defer to my right to keep silent.

"But I have a difficult problem with the the company's management. I do not know how to overcome this one", Avivit sighs.

"Can you elaborate?" I ask, and she continues dramatically. "Let's start with the CEO. This is his third start-up; he sold the first one for two hundred million dollars and at a return of 20x to his investors. The second, he took to an IPO and managed profitably with increasing revenue for twenty consecutive quarters.”

"And the problem?" I ask, when she stops for an artistic pause.

"I conducted in-depth research and discovered that in the ninth quarter, during which the Twin Towers were attacked in New-York, the company did not double its profits as usual. That is a sign of weakness which may be of influence in the future too."

"Let's move on to the VP of R&D, what did you think of him?" I try evading her.

"Really unimpressive. This is his fifth start-up and all the previous ones were sold with significant returns. His products always won awards. But, pay attention - I found that seven years ago, in the second start-up, there was a 3 days delay in the release of version 4.0 of the product. That is, of course, a very worrying sign and any intelligent investor will notice it."

"I don't know what to say to apologize for the shallowness of our investigations" I try to justify myself.

"Wait a moment, we have not yet discussed the CFO, she says in a threatening voice, and immediately adds: "He was CFO five times, lead companies from their start until their issuing, very experienced with the NYSE and has contacts with the world's leading venture capital funds."

"I don't understand", I say, and Avivit explains: "Extremely serious, and the reason is that with such a CFO, we will not be able to hide tortuous conditions that nobody will find in the investment contracts. We won't be able to outsmart management with crooked clauses, whose ruthlessness towards the company and its founders will only be discovered at the exit day. We will not be able to apply our vast experience solely towards our own interests and to the detriment of the entrepreneurs. The truth is, the more I think of it, I think we will back out of this deal."

"It is all right" I console her, "since we received term-sheets today from Gemini, Evergreen and Kleiner, there is no need for you to trouble too much about this matter."

"Hold the line a minute" she orders sternly, "I'll generate a partnerships decision within minutes, in any case they are a bunch of lazy irresponsible people and I am the only one who calls the shots around here. Give me ten minutes and we will give you a winning term-sheet. What kind of pre-money valuation did you say you wanted?"
…
(Published by “Globes” – 15 June 2008)

Positive Answer

2010-04-30T02:50:00.003+03:00

I found an amazing company. Stunning technology, twenty patents, a target market of billions which is growing at a crazy rate, a team of entrepreneurs to die for. My partners are happy. At the worst, we will multiply our money by fifty. At the best, the Kleiner Perkins guys will seem like amateurs when compared to us. In short, the chance of a lifetime.

After a consultation with my loyal partners we decide to advance quickly. "Give them a positive answer, make sure they understand that there is no fund that is better suited for them, try to find the reasons for this, submit a term sheet quickly, and be generous with the conditions!" they give me their enthusiastic advice. Rather excitedly I call the company's CEO by phone.

"We decided to give you an affirmative answer" I inform him, "We are as excited as you are with this great opportunity and would like to be your partners on the way to success. We were very impressed with your technology, as well as with the company's vision. You are an impressive team of entrepreneurs and we estimate you will be able to lead the company to an IPO and much further. How about we meet somewhere quiet and modest, maybe "Raphael" restaurant, to discuss the terms of the deal? I would be happy to order us a one thousand shekels bottle of wine to celebrate. I promised you that we were a fast moving fund and here we are."

Since my conversation partner on the other side of the line is thunderously silent I repeat my words, only this time the price of the bottle rises to two thousand shekels. Again silence, and at last he responds, slowly and in a low voice.

"Look, we did not expect such an answer and so quickly too", he says in a bitter voice, "maybe you should reexamine your estimates of the market size?" "We feel very comfortable. We consulted analysts, and we realize that the market size you estimated is relatively modest" I try to calm him.

"With all due respect", he is clearly angry now, "Only yesterday we got a new report from Gartner, which cuts our market by ninety percent and estimates that within five years its size will shrink to half the size of the avocado juice lovers’ world market." I suffer a blow but recover quickly. "Your technology is unique and has really impressed us. And you had the wisdom to protect yourselves with patents too. It’s been a long time since we met a team with such technical depth."

"Yes, I really wanted to update you on that. The day before yesterday we received two lawsuits for patent infringement - one from Microsoft and the other one from Cisco. They gave us a fortnight to pay them ten million dollars each, or - alternatively - hand over all our code in two copies. We will probably choose the latter option, since in any case ninety nine percent of our code is open source which we downloaded from the Internet."

Not all is lost so I manage to respond. "You are second to none entrepreneurs. You were a crucial factor in our decision to invest. You don't always find such a team." Silence on the other side of the line followed by a long sigh. "Since we are speaking, it is important that you know, that my partner, who co-founded this start-up with me, ran away overseas with my wife last weekend. They left me his two children and my three and a note demanding that I take care of all their needs and their education until they graduate college. In light of this development, I yesterday appointed Yossi, a first year graphic design student, as our CEO. Again, I urge you to reconsider your decision."

"Say, maybe we could still meet to talk? I desperately need a good bottle of wine now" I beg.

"You made a good impression on me", he accedes, "If you promise me that you will reconsider your unfortunate decision, I will be glad to meet. How about going together to McDonalds's in two hours? I'll pick up the kids from their kindergartens and schools and come straight there. Bring the wine with you, OK?"
…
(Published by “Globes” – 21 September 2009)

Broken Windows

2010-04-30T02:39:00.000+03:00

Marc Andreessen, the founder of Netscape, once dared to say that "Windows", Microsoft's operating system, was a poorly debugged set of device drivers. In other words, faulty software that was not properly tested before being released for use. It is said that the guys from Redmond really took offense and that was the reason for the war Microsoft declared on Netscape at the time.

I tend to recall Andreessen's severe words while I patiently wait for my brand new laptop to wake up. Microsoft knows how stressed and intensive a modern man's schedule is, so they have generously granted us many idle moments facing blue screens, watching waking up windows and stuck applications. While our computer "starts up" we can drink coffee, call the wife, tick-off the broker and sometimes even take a short nap until all the drivers are loaded, the meaningless messages are over, the conflicting application complaints vanish and we finally have in front of us a glowing screen awaiting our command.

But today I have my doubts. I purchased the most advanced computer, I upgraded to the fastest processor that was ever put into a machine that is not a spaceship, I added enough memory to manage the Army's logistic array and purchased a disk that can easily contain all of NATO's secrets. The latest Vista version was installed on the computer and the end result is, proudly, the most expensive computer ever purchased by Canaan. So expensive, that I report it as an investment in an innovative company, so as not to enrage our tough CFO. But despite all of this, my computer lingers in turning on, gets stuck often and conducts itself leisurely. I use a good few minutes of RESET and call my good friend Shmulik to complain.

"Shmulik, what is this thing? I say, "Could it be that the planners of Vista simply decided to cause aggravation to a nice person like me, a Microsoft faithfull user?" “

Shmulik is not a partner of Bill Gates, but he does understand computers and has been bravely and successfully coping for years with all the problems the guys at Microsoft insist on heaping upon us, sometimes.

"First of all calm down" my good friend advises me, "Second - why get angry? Do you know how much money was invested in the development of Vista? How many millions of human hours? It is not clear if there is a precedent for such an investment in a product in the world of computers!" He announces knowingly.

"That is exactly the point", I answer bitterly, "In my opinion, there was never a case where so many millions and such effort were invested in a product that at the best makes no difference to anyone. What serious company would invest their best efforts over so many years in a product that causes such disappointment to their most loyal customers?"

"Say, have you tried downloading the new Service-Pack? Optimizing the drivers? Maybe you should de-fragment the disk?" he cunningly evades my complaints.

"Shmulik, I 'm not yet a Microsoft employee" I remind him, "I have a few other things on my plate other than serving my computer. Would you be willing to accept a faltering jeep that barely starts in the morning and gets stuck twice a day?"

I have hit a sore point and Shmulik hesitates a little before answering. "Look here, Microsoft announced that the next generation of Windows will be released next year. Millions of man hours and endless money are being invested in this version, so it will obviously be faster, more stable and more efficient, right?

"Say", I try to encourage myself, "when this version is released, do you think we can expect that when we turn on the computer it will start-up and that when we ask it to shut down it will shut down? It is an extreme requirement, I know, but do you think so?"
…
(Published by “Globes” – 18 January 2009)

No Parking

2010-04-30T02:28:00.000+03:00

Atir Yeda street in Kfar Saba is exactly like its name, an impressive concentration of high-tech companies at the forefront of world technology. SanDisk, N-trig, LiveU, Modu, Infogen and many others populate the buildings scattered along the street. Whoever plans on driving here for the first time in their life, sees in their minds modern high-tech buildings, covered with dark glass, surrounded by lawns with straight boulevards of trees at their sides and - of course - parking lots, hosting the vehicles of the high-tech chosen ones.

And those who arrive at this street for the first time in their life, are convinced in the first few minutes that they made a navigational error, and instead of the promised high-tech concentration, their wheels have lead them to the starting point of a challenging tour of off-track courses, dunes and marshes. Because, as is customary in our developed country, there is no connection between the number of people populating a certain area, and the parking areas allocated to them. More accurately, for the permanent inhabitants of the street, there is probably adequate and properly arranged parking, well hidden in the compounds of the buildings in which they work. But for a visiting stranger, a reporter coming to interview, an investor coming to be convinced, the verdict is to make do with what our planning and traffic geniuses planned for them. That is to say: nothing.

Not really nothing, if we take into account that wide area spread out opposite the above mentioned high-tech buildings. An area upon which will one day be built, no less impressive buildings, that will, of course, also have no shred of proper planning for visitor parking. But since for the time being the lots are vacant, an improvised parking area has emerged, setting free the imagination of the Israeli driver, seeker of challenges and lacking in options. That’s why you can see humble family cars courageously seeking their way between muddy dunes. And fancy official cars, planned for silently roaming the streets of Paris, galloping into giant puddles, spraying foam and dirty water in all directions, just like the tough cowboys riding their horses in the cigarette commercials.

And the jeep owners amongst us enjoy the pleasant feeling of self fulfillment, and ultimate justification opposing the wife's criticism: "What do you want, tell me, do you know under what conditions I work, to what primitive places I need to go to check out an investment, and what are the dangers I need to go through to find a parking spot? Do you really want me to risk my soul to get to a place like "Atir Yeda" in a pathetic family car? Have you thought about the future of our young ones?"

And while talking about areas of distressed parking conditions. we may console ourselves that Kfar Saba is not unique. The visitor to the industrial park in Lod will trudge through dust and mud, and in his second visit will already know that it is better to park at the airport and hitch-hike. The visitor to the fancy high-tech area of Ramat-Hachayal, arriving after six o’clock in the morning, had better arrive at least one hour before the scheduled meeting, in order to have a shot at finding a parking spot in one of the pathetic lots placed there to mock the chancing visitors. And in Herzlia Pituach, the uncrowned capital of our high-tech, more and more buildings are being built, because the assumption is that if someone is willing to drive into this traffic nightmare, they deserve to be punished and waste their time in vain, touring the streets in a pointless search for parking.

This is by no means a criticism of our urban planners, on the contrary. We are full of joy for this daily reminder of how different we are from the other nations. Especially the arrogant Americans, who dare waste such vast areas on public parking. And they dare to allocate parking spots for the handicapped wherever possible. We are joyous for the right to grant new meaning to the cars, whose anti-Semitic designers did not consider making them a few centimeters higher and make them suitable for typical Israeli parking. And, of course, we are grateful to all the different local municipalities, which endlessly keep on building, but without parking lots, and thus allow themselves to generate more revenue from taxes. All of this for our benefit, of course.
…
(Published by “Globes” – 18 May 2010)

Agassi Changes The World

2010-04-30T02:17:00.000+03:00

Something happened here: Shai Agassi, who became one of the senior people at SAP after selling them his company for an imaginary sum, who could have become the CEO, got up and turned to a new direction. Just like that, without requesting permission. Without checking with the senior high-tech people in Israel to see what they have to offer, and without asking us, the venture capital people, what have we planned for the rest of his life, Agassi decided - on his own - what path to follow.

If he had decided to found a new start-up, we would all have understood and accepted, and patiently waited till the moment he tired. Until he would have realized that without us, the VC’s, he could not continue alone and would have turned to us for help. We would have engulfed him with love, invested in him without end and helped him to become a successful serial entrepreneur, for the glory of the Israeli high-tech.

But no. Mr. Agassi is no longer satisfied with making money for himself and for us, his potential investors. He is aiming high, to change the world. He wants to create a Better Place here, like the name of his company. He wants to electrify our cars, spread half a million charging stations all over our tiny country, significantly improve the quality of the air here, and shatter our cursed dependency on the international oil sources. He is threatening us with establishing scores of research, production and development companies, which will create thousands of new jobs and all sorts of other unnecessary good things in the same vein.

While waiting for my coffee at "Aroma", I study Agassi's story, spread out over five color pages in the newspaper I am holding. I am so absorbed in the fascinating story that I fail to notice that another pair of eyes, which belong to a friend of mine, are reading it with me. He too is a resident of Hamenofim Street, a seasoned and experienced high-tech investor.

"So what do you say about the charlatan?" He opens to see whether I, in my innocence, have been charmed by the photographs of Agassi smiling, or whether I belong to the same rare breed of those, who know right from wrong, and who are not taken in by every bit of nonsense that is published in the newspapers.

"Amazing, simply amazing", I say in admiration. "Here’s a project of a national scale. In a country like ours, where the last national project was planting roses in the Knesset garden, an entrepreneur steps forward, and without making excuses, with extraordinary daring, goes for something that can change the world. I'm speechless".

"Come on", my friend says impatiently, "Are you too falling for this nonsense? Don't you understand that the electrical power necessary for this car, multiplied by the energy per hour required by the battery, divided by the square root of the energy emission differential, will cause this amusing car to travel at a speed of 100 km/h at the best, and it will have a range of less than one hundred kilometers? Can't you see that while our oil dependency may drop miraculously, we will not be able to afford to drive jeeps with engines of fifty thousand cc's and two hundred thousand horse power while everyone around us is demonstrating responsibility and adopting nature preservation values? Where exactly do you think are you living?"

Confronted by such an attack, I am left with no choice but to reexamine my position. "Sources in the know say that nobody is even willing to produce these cars of his, no serious company will enter this madness!" I announce with the importance of someone who is in the know. (I had an oil change when I filled my car up with gas today, and that is what the nice attendant at the gas station said).

Now I have caused him satisfaction. My conversation companion smiles at me in relief. "And he wants to make millions out of this business, this Agassi. Do you understand? At your expense and at mine, and on the backs of us all. He thinks we are a whole country of suckers!"

We finish our coffee happily and say goodbye. Not to worry, somebody is sure to make Agassi fail and we can peacefully continue living our air-polluting, oil dependent, horribly wasteful, lifestyle. Everything is fine. Funny to see with how much fondness this project is being accepted all over the world, by executives of giant corporations and amongst world leaders. What do they know anyway? But that is what we are here for, the Israelis, to protect the world. So that, heaven forbid, it will not turn into a Better Place!
...
(Published by “Globes” – 3 February 2008)

"A Star is Born"

2009-05-14T09:20:00.002+03:00

Astonishment spread through the Israeli venture capital community last week. A well known and respected Israeli newspaper, which hosts this column every week, published a bold study ranking the local venture capital funds and even gave them grades. The results of this study are sensational. They point at the leading funds and even name the winning investors. Yes sir, right here, in Israel, we have our TV show “A Star is Born”, we also have “Born to Dance“, in addition we have a “Survivor” and from now on we also have the “Top Quality Fund” and the “Most Appreciated VC Partner”!

I have a few reflections on this dramatic survey, especially in light of the fact that nobody requested us, the venture people, permission to conduct the survey. It seems as though there is a sort of aspiration to modern militant journalism, uniting the Israeli journalists, and causing them at times, to go on unnecessary crusades. Between us, if journalists allow themselves to publish accusations against our pure and honest leaders and even against our diligent and brave soccer players, then is it a wonder that they would conduct such a survey against our High-Tech leaders?

My greatest surprise is that it even crossed somebody’s mind to treat venture capitalists just like regular people. We all know that we are talking about a special species, distinguished and different than the rest of humanity. Drivers of fancy jeeps, dressed in the best of fashion with meticulous nonchalant elegance, we eat caviar and drink champagne in the company of the world’s leaders and spend our time in business lounges all over the globe, in fancy hotels and expensive restaurants. And of course, we are experts in our profession, brilliant businessmen, witty and sharp minded, with an amazing talent for identifying market trends, analyzing them shrewdly and coldly, and leveraging fruitful and successful investments out of each and every one of them.

And the reporters of this newspaper, which name we will not mention here, dared to choose us of all people, to compare us against each other, to rank us and to give us grades. And the many entrepreneurs, to whom for years we have taken the trouble to be kind and polite, joined forces with the newspaper’s reporters, behind our backs, and violated our unwritten alliance.

Well, it is so obvious to any reader that a well organized plot has been hatched here between the investigative journalists and the entrepreneurs who were polled for this article. It was all done under heavy curtains of secrecy. Each entrepreneur was required to fill out a questionnaire behind a screen while being hooked up to a lie detector. The forms were collected and transported in armored cars to a secret location and placed in a sealed and well secured bunker. Three different super-computers processed the information and an in-depth mathematical analysis was performed on the results by the stern doctor with the thick-rimmed glasses, who scares us every four years during the election night broadcasts. The sensational results were placed in a star decorated blue envelope, and the citizens of the country received the survey in the newspaper, whose name is withheld by the editorial staff.

And a few words about the parameters that were chosen as a basis for evaluating our quality, us the investors. The question that sticks out the most, amongst the questions which the entrepreneurs were asked, is the one that asked them to rank us, the VC’s, according to our integrity and our will to build a real partnership with the entrepreneurs. This question clearly shows a complete misunderstanding of the very basics of our important profession. If we add to that the unnecessary questions about the capability of the funds to help the entrepreneurs and our willingness to assist, we can, once more, clearly see the picture of journalists searching for prey: We? Assist? The entrepreneurs? And the last nail in this coffin of questions was pounded in by the question about the VC's inter-personal skills. Oh, really, come on.

And one last comment about the results. Being acquainted with the winning funds - and with the others too, and being familiar with the winning investors - and with those who did not win as well, I would like to remind our readers of the very basic rule: all VC’s are always top tier, and all the investing partners are always decent, talented, experienced and have a very successful proven track record, even if some survey or another try to claim otherwise.
...
(Published by "Globes" - 25 May 2008)

Digital Vacation

2009-05-10T13:50:00.003+03:00

It is summertime and it is hot. For the approaching summer vacation my dear wife and I split the preparations between us. As usual, she is responsible for the small and insignificant tasks such as plane tickets, hotel reservations, car rental, trip routes, packing and logistics and I, as always, take upon myself the responsibility for the most important task of all, the basis of any respectable family trip: the technology that will accompany us during the vacation and transform it into a modern and experiential trip, befitting our profile as a progressive family.

The first item to be carefully packed is the laptop. Despite the destructive influence of this unnecessary device on the vacation and feeling of detachment, after many years of marriage my wife has learnt not to fight it anymore. With the laptop I quickly pack the required accompanying accessories – disk-on-key, cellular modem, charger and universal electrical adaptor.

After the computer, it is now the turn of the digital camera, which is accompanied by an additional battery, memory card and USB cable. Next to it I carefully place a digital video camcorder with its charger, three cassettes and an extra memory card. Another universal adapter is placed in between the two cameras, just in case.

Because we are modern people, we obviously take our cell phones when we go for vacation, close at hand at all times, wherever we go. Therefore - two cell phone chargers, Bluetooth earpieces with their chargers and another universal adaptor are put into the bulging bag.

And now for the multimedia department. A portable DVD, the wonder drug for long family trips involving bored and restless kids is slipped into the bag, accompanied by six movies, its charger, noise cancellation earphones and of course a car power adaptor.

I hide the little boy’s Game Boy and seven games in a side pocket. For some reason his mother thinks that trips abroad are a good opportunity for parting with screens of all types but let’s not enter that discussion at this moment. At an altitude of 10 kilometers above sea level, the argument about this subject is always much calmer, especially when you take into account the fact that the boy is hypnotized by the screen and is not free to hassle his parents with various requests and complaints.

And now for any trip’s necessities: our magnificent GPS receives its honorary place in the compartment next to the laptop. An external card pre-loaded with the maps of our destination country is already inside the device. Car mount and car charger accompany the GPS into the bag. Two two-way radios with a 10 kilometer range are placed in the heavily laden bag; they have proved themselves in the past as worthy companions and they always belong with us.

Now, I look with pride at the well equipped black bag, professionally packed in a praise-worthy manner. James Bond would have been proud of this impressive bag, which testifies to our family’s professionalism and meticulous preparation for any possible situation.

Just before we leave for the airport I get a call from my eldest son. “Dad, I just wanted to make sure that you didn’t forget my PSP”, he says while munching a pizza at the local pizzeria, to which he was sent earlier so as not to disturb our packing. “Naturally my dear father, you understand that I cannot accompany you on this long trip unless I have some computer games and movies that will keep me occupied during the long period of time which I will be so kind as to spend with you”.

“Dear son”, I answer him “It has not even crossed my mind to cause you a painful separation from your natural environment”. I immediately place the aforementioned device and ten games in the family bag. “However, if you do not find it too difficult, it is best that you do not raise the subject in front of your mother, at least not until the doors of the airplane are closed. Can I count on you?”
...
("Published by "Globes" - 24 August 2008)

Sixty Years of High-Tech (Israel’s 60th Independence Day)

2009-05-10T13:47:00.000+03:00

Some of you may think that today’s column has been given a strange title. Especially those of you who believe that prior to Mirabilis and Check Point there was wilderness here. The grey haired ones amongst us will nostalgically remember the early days of Nice (1986), or the merger of Orbot and Optrotech, which lead to the creation of Orbotech (1992). The real veterans wistfully remember the early days of Elbit (1967), the founding of ECI (1961), or even the establishing of RAFAEL over fifty years ago.

This sequence of names is not incidental. The entrepreneurs who are right now working diligently on the next Israeli success, the one which we have not yet heard of, are tightly linked to a long chain of projects that were established in this country previously, long before we called this High-Tech. The warriors on their way to the bitter battles of Latrun, who improvised batteries for their communication radios from dismantled car batteries, were also part of this sequence, as was the inventor of the Davidka (David Leibowitch), the cannon, which served the Palmach in 1948 and so were many others.

Many of those who worked towards establishing the state of Israel, and strengthening it during its first years, from commanders in the Palmach and army ,through civil servants and even politicians, could certainly have been good entrepreneurs of successful companies, if they were not too busy building us a country.

The High-Tech industry also took part in huge national projects. For example the Israeli satellite Ofek-1, launched into space by the Israeli Shavit launcher rocket in 1988, and turned us into one of only eight countries which had ever proved to have such capability. Or the reactor in Dimona which placed us back in 1959, according to foreign sources, in the club of less than ten countries worldwide with nuclear warfare capability. And there was also the Lavie, our national airplane which nearly took off but was eventually grounded.

Foreign investors are still trying to understand this phenomenon called Israeli High-Tech, which has no parallel in the world. A small country with no natural resources, in ever-lasting conflict with its neighbors, which created a magnificent industry, one of the leading in the world, in its innovation and business achievements. In my opinion the explanation is simple. It is, more than anything else, our character. The belief that everything is possible, everything is within reach and it is all up to us.

We do not like to stand in long lines, we are impatient, but we are also helpless optimists. We dare where many others would not even try, we are original in thought, outrageous and naïve and during our years of growing the High-Tech industry we have also learned to listen and cooperate, to be global.
Therefore I claim that the High-Tech was always here, if not as an industry then as a national character. The common denominator of the projects that were briefly mentioned here is the combination of daring and vision, initiative and courage and of course also naïveté. These are also the characteristics of any team of entrepreneurs which sets out on its way to change the world, and of every start-up company.

The Israeli High-Tech will keep on producing companies in this country. Some will be sold, others will be erased, and a few will turn into giant companies. On our one hundred and twentieth anniversary we will look backwards proudly on scores of more international companies which grew here and turned into world leaders. I can only wish that they will include also textile and agricultural equipment companies. They will definitely include green energy and water technology companies, right next to pharmaceutical developers and medical equipment manufacturers. Let us hope that in addition to Teva and Amdocs, we will be proud of world giants such as Better Place and Modu, and who knows who the others will be.

The role of those who take part in the Israeli High-Tech is to keep on initiating and creating, to lead in the world front, courageously, with a little Chutzpah and lots of vision. If only a new education system would be created in Israel, one which strives for excellence and is based upon values, that would ensure that the next generation of High-Tech entrepreneurs grow here.

The country’s sixty years celebration is also the celebration of over six decades of Israeli High-Tech and entrepreneurship. They were here at the time, they are with us now and they will continue to drive a magnificent industry tomorrow too, and in the next sixty years.

Happy Independence Day!

...
(Published by "Globes" - 5 May 2008)

Working Hard

2009-05-10T13:45:00.001+03:00

It is one minute past 6:00 pm, and one can feel the silence in Ha’Menofim Street. I enter the evening hours’ routine procedure: I do not answer unidentified phone calls, e-mails are automatically filtered and the windows shutters at my office are carefully closed. The only thing I need now is for someone from the high-tech community to see me working at this late hour, not to mention my partners overseas. In light of my distant location and the unique demands of the Israeli high-tech, I was given a special and unusual permission, a one off and for two years only, which allows me to work after 5:00 pm, and this too - only when I am in Israel. After all, none of us wants to harm the good reputation of our profession and certainly not to shock the international venture capital community.

Suddenly, at 6:15 pm, the phone rings and I answer it according to the usual drill. “Welcome to Hamashbir Latzarchan department store, you have reached the purchasing department, how may I help you?” After a hesitant pause I hear C., the talented CFO of one of our portfolio companies. He wishes me well and mentions that the last time he called, which was also at such a late and unreasonable hour, I identified myself as the manager of Hapoel Tel-Aviv’s pensioners association.

After the standard good wishes he clears his throat in embarrassment and announces that he has something to tell me, he hopes that I am in a good mood and he really wants me to take things at face value without any offence. “I have decided to take a vacation. I haven’t missed a day in six years and I have accrued one hundred and twenty vacation days, as well as twenty sick-leave days. I plan on going to Eilat for three and a half days with my wife: Friday, Saturday, Sunday and half of Monday. I will be on time for the management meeting on Monday night, so the damage to work will not be too severe”, he says in one go, nearly swallowing the words.
“So, your vacation, it includes the week-end, right?” I display knowledge of the Jewish calendar.

“Look, I understand the criticism. My cell phone will be on 24 hours a day. I am taking a satellite phone, at my expense of course, as a backup. I notified my wife that I will not be going into the water, in case someone from work will be looking for me. I will call the office every fifty minutes and of course will participate via phone in all the team meetings. I am really sorry; it is just that we must take this vacation”.

“My dear friend, why don’t you add another day or two to your vacation”, I suggest to him affectionately, “you have been working too hard for years. You deserve a real vacation”.
“I understand the criticism without you elaborating”, he answers sadly, “Sorry I brought up the subject. I will tell my wife that we will have to return on Saturday night”.

After my attempts at convincing him only cause him to fly at his own expense instead of taking his company car, I hurry to conclude the phone call before the family vacation is completely cancelled.
As a value-add investor with an utmost commitment to our portfolio companies, I pick up the phone and call C’s CEO. She stops a management meeting in my honor and I can hear anxiety in her voice as she answers my call: “The time is 6:35 pm. If you called at such an unlikely hour, it is clear to me that a disaster has occurred. Please do break the bad news quickly, I just cannot wait to hear”.

I report to her my phone conversation with C. and suggest that she talks to him about extending his vacation a bit, let him rest a little. When she answers me I can hear the bitterness in her voice.

“I just can’t believe this, you invest so much in someone and this is what you get in return. But, not with me. I will talk to him, don’t you worry. Whoever is not willing to work hard in this company, does not belong with us! He barely started working here, and he is dreaming of a vacation, this is unbelievable!”
...
(Published by "Globes" - 27 April 2008)

Burning Copyrights

2009-05-10T13:43:00.001+03:00

I was summoned this week to Y’s kindergarten for an emergency meeting with the kindergarten teacher. Without any unnecessary pleasantries she addresses me in a severe tone: “I requested you to come here urgently because of your son’s problematic behavior. All the children were requested to burn a favorite song on a disc and bring it to kindergarten, so that we can prepare our compilation of hits. All the kids were very happy and worked quickly with their parents. Only one child, your son, came and told us a strange story - in his house you are not allowed to burn, out of reverence to the copyright laws“.
“That is my boy” I say proudly.
“I do not understand what is so funny. I have to let you know that we will approach the town’s social workers services. Such damage to a young boy’s tender soul will not be taken lightly”.

Reprimanded and thoroughly ashamed I call the family together that evening for an ideological discussion. I report the incident while emphasizing the subject of copyright laws and minimizing the possible harm to Y’s tender soul. The subject of the discussion himself is sitting and savagely fighting Ninja warriors on his Game Boy device, totally ignoring the immensity of the moment.

His elder brother L., nearly 15, listens silently to my dramatic descriptions and when I pause at the end of a sweeping speech in order to receive the support of my family members, he finishes his fourth sandwich and asks quietly: “Tell me Dad, have you already received a reply from Microsoft?”

Silence around the table. I recognize a smile of malicious joy, well hidden on the wife’s face. S. and O., sister and brother of Y. and L., look at each other and are not ashamed to burst out laughing. That is the way my dear family demonstrates their attitude to the e-mail I sent to the representatives of the Redmond software giant approximately one year ago:

“Dear Sirs, I approach you with a request to consider giving me a discounted price for five Office packages for the computers of my dear family. We abide by the copyright laws and therefore wish to purchase licenses legally. Will you please consider a fair price for our honest family?”

I never have received a reply. I heard that in Microsoft’s service department several employees have suffered from shock. When my e-mail was forwarded for additional investigation it caused system confusion. Experts explained to me that Microsoft Israel does not have a business process for handling those who wish, really insist, on purchasing software for home use. There is a good chance that my e-mail will be included as one of the funnier items in the next season of Israel’s most popular sitcom. And, lacking any response from the giants of Redmond, I took a second mortgage, and at the expense of my children’s inheritance, purchased legal Office licenses for use on our various computers.

“Laugh all you wish”, I reprimand my rebellious family, “but in our family we do not steal. Period, full stop. What shall we tell your grandparents? That we have a new generation of Zionist thieves?” In our house we have a lot of respect for the founding generation and so everyone becomes serious and supportive. Now I get looks of encouragement from wall to wall. The Kindergarten teacher can go to social services, but we will stand by our principles. We are a proud law abiding family.

At night, “after the children”, I open my e-mail. Amongst scores of fascinating suggestions for investment in innovative companies, I identify an e-mail from my very own father. “Dear son, congratulations on your last column. The subject itself was boring, but you demonstrate good language skills and you did not make too many grammar mistakes”, thus he begins, and continues, “Son, your mother and I are in the midst of organizing an independence-day party, where we will entertain, as is our custom, the founders of the state and many of those whom thanks to them you are here. This year we are planning on a lively Karaoke evening, therefore I am asking you to burn on DVD all of your magnificent Karaoke collection. I know there are technical difficulties involved in such copying, but I am counting on you to find solutions. Please remember the importance of the subject for us, the founding generation”.

“Dear father”, I reply immediately, “Always at your service. Eighty burned disks will await you here. In addition, please remind me to teach you sometime soon how to use eMule and BitTorrent. I think the time has come for this”.
...
(Published by "Globes" - 6 April 2008)

A Visit in Wall Street

2009-05-10T13:39:00.001+03:00

Last week I visited in New York to participate in a conference connecting Israeli start-ups with American venture capital investors. We gathered there, entrepreneurs and investors, to hear and to be heard and to explore mutual opportunities.

As is usual in such events, the optimism could be sensed in the air. As a high-tech entrepreneur you have to be hopelessly optimistic, with meager cash reserves, when you have no idea how the salaries will be paid this month, with investors who expect quick returns and with a market that behaves as it sees fit, and does not necessarily display any consideration for your thoughtful business plan.

Venture capital investors also have to be rather optimistic, to deny the fact that most start-ups will never realize the dream, and yet still to invest; to ignore the threatening competition, to believe the rosy forecasts of entrepreneurs and await their materialization.

As I was sitting and listening attentively to the presentations of the different entrepreneurs, who were doing wonders to describe a new world of data communication with amazing speeds, innovative software architectures, revolutionary internet services and absolute security, it crossed my mind to go out for a quick visit to Wall Street, a short distance from the conference’s location.

I have a childhood friend who works in Wall Street in one of the biggest banks in the world. We met in Jerusalem during our high school days and served in parallel paratrooper units. We went to the military Officers Course together. We met in Lebanon during the first Lebanon war, and we are in close contact till this day. He lives in the US, while I returned from there not long ago. When we talk on the phone he calls me “brother”. I need to remember to ask him when and why he developed this habit.

My “brother” works in one of the bank’s trading floors. It is a huge hall seating 700 people in an open space. We estimated that their total annual salary is about 1.5 billion dollars, similar to the total annual VC investment in the Israeli high-tech. This trading floor is also the top of the aspirations of many start-ups: The most advanced computers, the fastest communication switches in the world, the most advanced software and the most sophisticated security systems. All these and more serve the thousands of people who power the global economy. Or fail it, depending on when you check.

We sat there, my “brother” and I and talked. I received a short summary of what occupies the minds of the Wall Street people today: the fear of mass firing, the dramatic reduction of credit lines, the total elimination of financial instruments that were, till just recently, the daily bread and butter of the banks; the extreme caution and mainly – the uncertainty: the worst is already behind us, but then maybe not. It may get much worse. Nobody knows for sure. The optimism of the start-up conference seemed from here like a blurry and distant vision.

I left the bank and walked back along the cold street. Policemen with sub-machine guns stood guarding New-York’s stock exchange. Nearby them George Washington’s statue stands proudly and opposite it, at the entrance to JP Morgan building stands a humble plaque, describing how the bank’s founder saved the American economy from collapse in 1907. Who said history does not repeat itself?

I managed to return to the conference just in time to attend the presentation of an amazing Internet company. Their founders discovered that millions of people fly each year and waste their flight time reading good literature, watching a movie, or heaven forbid, in deep sleep. However never fear, because using the company’s innovative Internet services, people will be matched in advance according to criteria such as business background or similar interests. With a little luck, a venture capital investor will be able to find himself on each flight next to a fascinating entrepreneur. The loyal readers of this column are obviously not surprised to hear my great joy at hearing this innovative story. So there is, after all, a reason for optimism.
...
(Published by "Globes" - 30 March 2008)

Three Warning Letters

2009-05-10T13:37:00.001+03:00

1. Dear CEO,
Hello there, dear CEO, the charismatic leader of a young and promising start-up. You have recently completed a successful round of financing; the investors were excited, the journalists totally impressed, your employees saluted you. 2008 began optimistically, with a budget indicating an amazing rise in sales and, of course, in expenses too.

Well, this is a severe warning: the real estate and sub-prime crisis, out there in other worlds is your crisis too. And it isn’t approaching, it is already here. If you are developing a product intended for a financial institute in the far away USA; if your target market includes large and mid-size companies in any American market sector; if you are counting on the good mood of the American consumer, which manifested itself in recent years in increased consumption of everything they could lay their hands on; If any one of these is true, then the crisis has already arrived, and it is real and painful.

Because your potential customers are now busy writing their resumes. Busy with survival. The last thing that they care about right now is streamlining operations or investing in infrastructure. And this is just the edge of a collapsing tower of cards, which will soon pull after it thousands of other companies, large ones and small alike. And the millions of workers, who will go home with reduced wages, or after being fired, will not be so interested in the innovative gadget you have to offer them and will not really have the desire to use this amazing service that you plan to offer them on a mobile device, via the Internet or by any other means.

So here is my offer to you, my dear CEO: Call an urgent meeting of your board of directors. Tell them that the annual budget, which was recently enthusiastically approved, is being put on hold. Present a budget cut, lower the sales forecast, preserve cash, make tough decisions and do not be afraid of the board’s reaction. What the bank executives failed to forecast and neither economists nor genius analysts in the white shirts and red ties understand, will naturally surprise you too. Explain this to your board of directors, share your misgivings with them and the sooner the better. Consider yourself warned!

2. Dear Investor,
Hello there dear Investor, board member of a leading and promising start-up as of yesterday, and a tiny little company fighting for its survival tomorrow. What the Professors and world experts did not succeed in foreseeing, the CEO of this start-up did not forecast either. And so, when he informs you of a dramatic change in the annual plan, don’t attack him with rage. On the contrary: bless him for understanding the situation and do cooperate with him. You can fire him and his successor five times, but unfortunately, that will not change the Dow-Jones index or the Dollar exchange rate, not even a fraction of a percent.
This is the year of the CFO, who has just become the most important employee of the company. If you don’t have one yet, he should be hired immediately. And preferably he should be tough, evil-hearted and cheap. Because this will be a year of belt tightening and money savings, and not a year of aggressive financing of fast growth. And by the way, we may be talking of two or even three years. Consider yourself warned!

3. Dear Rejoicers,
Hello there, revelers at the expected fall of the Israeli high-tech. The time has come for the end of corruption, you rejoice in your hearts. That annoying mother of the prettiest girl in kindergarten is about to lose her job; oh, what a joy. That young and arrogant nephew, two years out of college with a salary of twenty thousand plus car will soon be fired; serves him right, the spoiled boy. And this guy from your military reserve unit, the talented start-up CEO, will soon be looking for a job as a truck driver; great, just great. Well my friends, a real joy indeed, but a little premature and misplaced. Because the Israeli high-tech is much stronger than you think. It was built by tens of thousands of hard working employees, talented entrepreneurs and brave investors, and it sustains a whole industry around it, which is significant and real. It is a magnificent industry, one of the leading in the world, and it is the most important growth engine of our country. The Israeli high-tech will indeed undergo a crisis, but it will know how to deal with it, recuperate and will grow and flourish again. Consider yourselves warned!
...
(Published by "Globes" - 23 March 2008)

"Call Me Mike"

2009-05-10T13:30:00.002+03:00

I had an exhausting week in New York. On my way to Newark airport I cram in two additional meetings, participate in a conference call while checking-in, go through the security check, stop to buy chewing-gum for the kids and run to the gate. I board the plane at the last minute, dead beat, emotionally drained and hungry. “A good meal, a glass of wine and I’ll sleep all the way to Tel-Aviv”, that is my plan. However, plans aside, reality smiles at me from the seat nearby. His name is Michael, but since he has been living in America for so many years, “let’s call me Mike, OK?”
He is a High-Tech entrepreneur and the manager of a company he founded, a very successful company. He would be happy to elaborate but why don’t we get acquainted first? Mike Cohen, CEO of Mike Communications, aged 51, father of two, unfortunately one of whom still lives at home, while the second one just recently got divorced and is currently undergoing psychiatric treatment. His wife is an ex-model and presently an alcoholic who is carelessly wasting his money. And with whom does he have the pleasure of sharing the flight to Tel-Aviv tonight?
I murmur my name quietly and add with unequivocal antipathy “I’m with Canaan Partners, we are a venture capital firm, I had a crazy week, nice to meet you, see you in Tel-Aviv”.
However Mike is a seasoned entrepreneur who does not give up easily. As we prepare for take-off we are deep into an ongoing monologue about the founding of “Mike Communications”, the early years, the investors who betrayed him and the customers who did not understand. As soon as it is allowed, his laptop opens up and I find myself viewing a presentation. When the flight attendant inquires what we would like to eat tonight, he scolds her and informs her that, in case she did not notice, we are busy. “Soft drinks for both of us and please make sure we are not disturbed!”, he demands.

After four hours the laptop’s battery runs down and Mike lets me take a light nap. He has succumbed to sleep and his snores raise my hopes. After two hours I am awaken by my rumbling stomach. I creep quietly into the kitchenette and beg for leftovers from the same flight attendant we have previously insulted. Armed with an insipid sandwich of lettuce and mayonnaise I walk carefully and quietly back to my seat. Nevertheless, alert and smiling, Mike is already awaiting me. He has switched batteries and informs me that we will now cover the business model while emphasizing the profit margins and production costs. As we prepare for landing, the laptop needs to be switched off. While I breathe a sigh of relief, he pulls out a binder of transparencies, which he has on hand for such occasions.
The way from the plane to passport control is utilized for discussing the sales forecast. Since nearly all of the “Fortune 1000” companies will become his customers this year, Mike prefers to review with me the three, who in their stupidity, will not buy from him. On the way to the Taxis he gives me a surprise quiz.

“I’m going North, so it was nice meeting you and good luck” I say to him after I have made sure he is on his way South to Eilat. “Listen, we missed some points about the business model”, he replies. “Come, I’ll accompany you in the Taxi. I hope you live far enough away. It is important that you convey the right message to your partners”. “Look here, there must have been a misunderstanding”, I try with the last of my strength, “I don’t actually work for the fund. I applied but it didn’t quite work out. They really weren’t impressed with me; they even said that any company referred by me will be automatically rejected. I don’t mind passing on your contact information if you give me your business card”.
Now he becomes thoughtful, “Interesting, you have made such a good impression on me; if you like I could put you in touch with other funds. Just last month I spent the exact same flight with Chemi Peres, he didn’t know me beforehand, but I’m sure he will remember me. You can call him and say that Mike referred you. He will remember”. “Yes”, I say and start to back away as fast as I can, “I’m sure he will remember”.
...
(Published by "Globes" - 16 March 2008)

Theoretical Irresponsibility

2009-05-10T13:26:00.001+03:00

I am about to share with you a revolutionary economic theory of mine. After in-depth analysis and careful testing, I think, with a large degree of theoretical certainty that I can point out the common factor uniting various past giant deals in the high-tech industry. Deals, which have been analyzed countless times, and which we all viewed with wondrous eyes.

So, what do Lucent purchasing Chromatis for 4.5 billion dollars, eBay purchasing Skype for 2.6 billion dollars and Google picking YouTube for 1.6 billion dollars and many more Mega deals have in common? Correct, in all of them a small company, lacking any real income (if any) was acquired by a giant public company. That is nothing new. Yes, it is also true that these transactions have not proved themselves worthy, not in terms of income contributions, not in building shareholder value, and not in the strategic aspect.

But, here is the innovation, my theory. The common factor of these deals and others like them is the irresponsibility factor. Irresponsibility, not only in terms of the hasty decision that drove the purchases, but also in the accountability perspective: When the enormity of the mistake was discovered, nobody took upon themselves any personal responsibility. As far as we know, nobody at Lucent was fired because of the colossal mistake of purchasing Chromatis, nobody was moved aside because of the ridiculous price eBay paid for Skype, nobody at Google will be punished for the insane valuation the internet princes agreed to give a video storage site named YouTube.

And by the way, nobody will pay with their head for the illogical valuation used by Microsoft to purchase a mere percentage of holdings in Facebook. The same Microsoft, which was willing to pay 45 billion dollars for Yahoo, a company with sales of about 7 billion dollars in 2007 which controlled then 23% of the search engine market, is the one that evaluated Facebook at a third of the value of Yahoo. Facebook, with 60 million users but relatively minute income, with a long way still ahead of it before proving real financial value.

And why, you may ask, did I call my theory “the theory of irresponsibility”? The answer is very simple. It is because only irresponsible people make such decisions. I do not intend to insult those involved, who sat and seriously discussed market valuations, multipliers, future additional shareholder value and so on and so forth. I have no doubt that the honorable bus-dev team members, the valued dealmakers, faithfully did their job. But it is totally obvious to me that they knew that nobody would come after them with complaints two or three years later, when the enormity of the mistake would become clear. Nobody will look for those at fault and of course nobody will be called upon to assume any personal responsibility.

And this is where we should add an anecdote that in itself is interesting. It is called OPM, “Other People’s Money”. The additional common factor of the above transactions, is that the ridiculous prices were always paid for with other people’s money, or more exactly - public currency, or public shares.

In spite of the fact that the USA has such strict regulations on public companies, they have not yet found the way to ensure that people assume personal responsibility for their decisions, especially when they dip their hands into public money to finance such decisions. I would be curious to hear what those who estimated the value of Chromatis would answer to the questions of a stern SEC investigator about the purchase and the downfall which followed: “We loved the technology”? “We felt like doing something interesting for a change”? “We wanted to be remembered as the most ridiculous acquirers of all times”?

And now, pay attention please. Until my revolutionary theory is adopted, and until it is recognized in the appropriate circles, we will all keep on partying. The venture capital investors amongst us will keep on investing, at times, in companies without a clear business model, knowing that irresponsible buyers are still waiting for us out there. The entrepreneurs amongst us will keep on building, at times, companies without any real business model, knowing that a tiny percentage of them will be bought one day for an imaginary valuation, for which none of our buyers will ever be held accountable. That’s what I would call real irresponsibility.
...
(Published by "Globes" - 17 February 2008)

Value Add VC

2009-05-10T13:22:00.001+03:00

One of my favorite moments in meetings with talented entrepreneurs is when I tell my guests about our many virtues as a leading venture capital fund with a proven successful track record. It is a routine part of the ritual: They have come here to tell me why they will be the ones to succeed in creating a company that will change the world, and I am here to inform them that if anyone in this world can back them and give them some sort of a chance, that would be us, with our vast experience, countless connections and excellent reputation. We will open doors for them, and close deals for them even before they meet those potential customers, with whom we, of course, play golf approximately every other month.

Today I am hosting Udi, a brilliant entrepreneur, who is about to develop an innovative semiconductor chip, based on a communications protocol that nobody knows as of yet. But Udi’s friends have already used it successfully in our Air Force’s attack on a location whose details cannot be mentioned, “but let us say that it begins with ‘S’, ends in ‘a’ and is not Sahara”. Udi explains all this while scrutinizing me with a severe look and surveying our conference room with contempt.

When I ask him if he has any partners in this project he replies that yes, there are four of them, all veterans of the same secret intelligence unit, which nobody has heard of, whose number starts with eight and is followed by 4 digits, which when you add up the last two you get the square root of the multiplication of the first two. In order to decide which of the founders would talk to us, the VC’s, they held a raffle using a secret randomization algorithm, which was once used by the Mossad to disrupt the communications between the summer vacation house of the Russian president and the residence of the king of Morocco’s daughter. It was Udi’s bad luck to be the unfortunate one who would have to attend the boring meeting with VC’s.

Now he pulls out a yellow spiral notepad, scribbles on it a few comments about our shabby offices (no windows with a sea view, no top brand espresso machine, and no original artwork by some of our greatest artists) and turns to me suspiciously. “Yes, please, could you tell me why do you think your fund is suitable for us? And - please - save me the propaganda”.

I clear my throat and start pitching. “We are one of the leading venture capital funds in the US. Have been around for over twenty years and currently manage about three billion dollars. We have invested in…” but his enraged fist slam on the table, which manages to even startle Dikla in the next room, makes it clear to me that I started off badly. “I did not come here today to get from you the crap that I could have read on the internet”, he shoots, “tell me how you will create contacts for us, how you will sell our products, how you will sweat instead of us”.

I think I get his point, so I try again. “Our aspiration is to create a healthy balance in the partnership between us. You will work hard and we will rest, you will rush around the world and we will hang out on golf courses and ski resorts; you will sweat under the burden of responsibility and we will remove all your desire to continue”.

Udi’s look softens now. “Finally”, he says, “this, I like. Can you possibly elaborate regarding the support we can expect from you?” “Tell you the truth”, I say amicably, “we do not really know how to help. Actually, we have become famous for never supporting our companies. If you call entrepreneurs that have worked with us, you will hear that we are a group of lazy and arrogant people, who will not lift a finger for the good of your company, but we will definitely come up with never ending complaints”.

The ice has broken. Udi jumps up from his chair and hugs me. “Great, exactly what I wanted. You passed the exam and have been found worthy of investing in us. I am going to tell the guys that I have found qualified investors; and you, please go update your partners. We will send you an email regarding the amount of investment and evaluation. Good luck to all of us”!
...
(Published by "Globes" - 10 February2008)

My New World of Friends

2009-05-08T22:02:00.000+03:00

Being members of a leading and innovative venture capital fund, it is only natural that my partners have long been into the Facebook business. Some of them have been reporting supreme thrills, some of them are proud to be have been doing it twice a week, and one, even though he is not especially young, claims he does it every day. And yet, for a long time, I have been watching from the sidelines, while my innovative partners and many colleagues, the high-tech leaders, join Facebook and seemingly have been having a great time.

In the search for support I turn to my friend Shachar, who is the world champion in Internet, in technology, in Web 2.0 and more. When he has the time for it, Shachar is also the CEO of an innovative and dynamic internet company, whose shining future is still to be written in the history book of the high-tech. “Shachar, help”, I say to him, “The entire world is on Facebook and I am still deliberating. Is it worth a try? Isn’t it too early for me? And what is it good for, anyway”?

And Shachar with the tone he keeps for especially slow thinking investors, gently explains to me that 62 million people are already using “that thing”, and that I should try it gradually and carefully. And that I should not be disappointed if I do not really see stars and sparks during my first time. “The pleasure will arrive”, he says in a promising voice.

And since he seems to think that he has more important things to deal with, like preparations for tomorrow’s board meeting, and an annoying customer who insists on closing a deal today, he sends me off to jump into the cold water alone. He also encourages me to call him to report what it felt like, but not urgently. Preferably two years after he sells his company for a billion dollars.

And so, one evening I find myself sitting by my computer and excitedly building my Facebook account. A few minutes later I am a member of the community. Full of self pride I look at my online profile and discover in alarm that it is so shabby, so frightfully outdated and that I have no idea as to how to turn it into anything better. All I need now is for my partners to discover me like this, in this embarrassing situation. But a quick browse through the ‘net reveals to me the real and true horror: I have no friends, and I have no idea how to create myself new friends in such a cruel and alienated digital world.

In my distress I jot down a few lethal comments that my friend Shachar will have to hear from me long before he sells his annoying company, and with a flick of my wrist I turn off the computer. Damn, I forgot to log-out. I sure hope the Facebook authorities do not punish me for this.

After about a month, in a magnificent conference of the top tier venture capital funds (all VC conferences are magnificent, and all VC’s are always top tier) I meet Yaron, a well-known veteran investor. “Well, I sent you a message on Facebook and you did not bother to reply, should I conclude anything from this?” Yaron asks me, and I am enveloped by cold sweat as I suddenly remember that for the past month I received demonstrative back turns from captains of high-tech industry. In addition, a number of entrepreneurs called us to ask us that we return the business plans they had sent us, and two of my best friends hang-up the phone in my face.

Yaron and I know each other for many years, which is why he takes trouble to remind me that he is the lead investor with Shachar’s company, and that I can forget about joining the next round, or any other future round. After that, he says goodbye for good, and suggests that I find a profession which would better suit my meager talents, and then he turns to hold a lively conversation with another investor, who is also senior, successful and well-known.

I take off from the convention in a hurry and run to my computer. Facebook has not removed me; at least that, I console myself. With anxiety I suddenly discover over one hundred messages attached to the right side of my profile. Noam from San-Diego, Gideon from Silicon Valley, and Boaz from Tel-Aviv - they all want to be my friends. I answer them quickly and over amicably, “happy to be your friend, you are the best friends I have ever had”. Yaron is also there, at the top of the list, with a lonely message from the day I joined. I wipe away a tear and delete his message. Another ninety messages from dear friends, some of whom I have never met. I am in love with all of them. They are my true friends.

Suddenly, towards the end I find Shachar. With a cheeky message he congratulates me on joining Facebook and wishes me lots of fun. You just wait Shachar, you may be the world champion in Internet but there must be a button here somewhere, which if all my new friends and I pressed at the same time, we could kick you out of our charming social world. Who do you think you are, anyway?
...

(Published by "Globes" - 27 January 2008)