WSJ 'star-struck' by Israeli tech scene
Within tiny country, UK tech envoy tells leading US financial daily, 'you have every major sector and subsector of the technology industry.' Recent acquisitions of Israeli companies show nation's lure hasn't tarnished, newspaper states
"Try as you might," begins the article published under a picture of a flag of Israel, "it is extremely hard not to be a bit star-struck by the Israeli technology scene. Just when you think you have seen everything, along comes something even more impressive, such as a startup with a nanotechnology that has the potential to disrupt everything from batteries to display screens to semiconductors."
The writer is award-winning journalist Ben Rooney, who covers technology, entrepreneurship and innovation for the Wall Street Journal Europe, from Israel in the south to Scandinavia in the north, from Ireland in the west to Russia in the East.
Rooney, who had a long career in the British Daily Telegraph and was the launch editor of its website, appears on television and in conferences and recently visited Israel.
In his article, Rooney wonders what is next for the startup nation, noting that it is the scale of Israeli ambition that other startup ecosystems outside the US seem incapable of matching.
"It is Silicon Valley for the rest of the world," he quotes Saul Klein, a London-based venture capitalist and recently appointed a UK tech envoy to Israel, as saying.
Another quote is from Mark Tluszcz, co-founder and chief executive of Mangrove Capital Partners SA, a Luxembourg-based venture firm that has been investing in Israeli startups since 2007: "On a scale of one to 10, the innovation I see in, say, Germany would be close to zero. In Israel, it is a 10."
"What's the secret?" the newspaper asks. "Reasons include the role of the Israeli Defense Forces, and in particular the high-tech Unit 8200; the unique cultural values of a country forged from centuries of oppression; and Jewish mothers."
Yossi Vardi, introduced as "the larger-than-life so-called father of the Israeli tech scene," favors that last theory. "From birth," he says, "your mother will tell you that you have to succeed, that you have to be better than your cousin, or her friend's son, or whoever."
'Many tech companies sell too soon'
So what is next for Israel? In the meantime, there doesn't appear to be any slowing down, the newspaper says, noting recent acquisitions by Google of crowd sourced traffic app Waze for a reported $1.1 billion and by Facebook of mobile-data-compression service Onavo, as well as Amazon.com's recent announcement that it is to open an R&D center in Israel, as showing that "the lure of the eight-million-strong nation hasn't tarnished."According to Klein, 'You have within this tiny country – you can drive from east to west in an hour, from north to south in five – every major sector and subsector of the technology industry. What is next? All technology."
While Israeli technology may be world-leading, Rooney notes, can the same be said of the companies that are built upon it? Critics, including Tluszcz, say that while Israelis are great at building small tech companies, too many sell too soon.
"The first $1 billion Internet company was Waze," he says. "They need some leaders to give them the confidence that they can stay longer and not sell."
According to Chemi Peres, managing general partner and co-founder of the Herzliya-based Pitango Venture Capital Ltd., things are changing. "There is (now) a notion of, 'Let's build bigger companies,' and not to sell them at $200 million. This is a cultural change," he says.
According to Klein, if Israel is seeking to build multinational companies, this represents an opportunity for other countries to share in Israel's success. And indeed, the UK and Ireland are already wooing and courting Israeli tech leaders, including a UK-Israel tech hub and a party hosted by the Irish ambassador for entrepreneurs.
But the Europeans may be disappointed. According to Peres, local entrepreneurs and venture-capital firms are beginning to look outside of their traditional market of the US, and they're turning not to Europe but to the Far East and the huge markets of Asia-Pacific.
