Humus Manifesto and Shakshuka Reality

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Image by STML via Flickr

Michael Eisenberg, an Israeli VC, wrote two thought provoking posts about the way the government  invest properly in Israeli High Tech. From Microsoft and .Net monopoly through iPad banning, to poor distribution of CSO funds, our government neglects the important aspects of maintaining Israel’s technological leadership.
Though not a VC, I’ve worked in several industries, from mobile to internet to media, and I meet a lot of startups in different stages. And I think that though Michael is right in his claims, there is another angle to this story – the core competencies of the Israeli industry is not as important as in the past.

Origins of Israeli High Tech
Israel’s High Tech originated, broadly speaking, from 4 sources:
1. Technological army units such as 8200, Air force and Mamram
2. Universities such as Technion
3. Russian immigration
4. ECI/Comverse RAD group and other major companies, whose employees who jumped ship and opened their own startups.

The strong points of these sources were electrical engineering and telecom oriented know how.

The Best Beta Site
Israel has one of the highest mobile and broadband penetration rates. Therefore, a mobile startup could easily sign a deal with a local mobile operator and make it a beta site. The local mobile industry was at the same level as  European mobile markets, so Israeli companies could launch products in that huge market relatively easily, as it was close to what they had locally. I was a part of such process when working with Flash Networks. First we sold our product to Orange, and then to T-Mobile. We knew what was needed in order to build and deploy a product in such an environment.

Media and Internet are Winning. Pipes are losing.
However, the market changed. World wide innovation lies more and more in internet companies. Hulu is more innovative then Motorola. Google is more innovative (and profitable) then Nokia. Mobile operators are not as important in the value chain as they were before. And Apple is changing the game again and again with innovative hardware and software.

Failure in  Growing the Business
Most Israeli companies are just not big enough, or maybe not with the right culture and financial resources to win over the mobile and telecom market and create the next Nokia or even next iPhone. The last guys who tried it failed and closed shop, not to mention their founder’s financial trouble. Yes, I am talking about Else Mobile and Eli Reifman‘s troubles. So in that area we are basically, well, screwed.

No Longer a Beta Site
So let’s look at the Israeli internet industry. Unlike the mobile market, there is a huge difference between local internet industry to international or American one. While video is growing drastically in the US, and major media companies experimenting with new business models, our market is just too small, too centralized, to make companies feel their bread and butter is at risk. With 3-4 major media players (Hot, Yes, Reshet, Keshet), and two major portals (Walla, Ynet) no one has the incentive to innovate. They are making enough money as is, and digital cents are not even on their map, as no one buys content here.
We don’t have an Israeli iTunes. We don’t have an Israeli Hulu. We don’t have an Israeli Huffington Post. We don’t have an Israeli ereader market (Sorry E-vrit, not enough units sold yet). Come on, iPhone, one of the biggest media innovations, landed here less than a year ago.
Amazingly, there is a huge gap between Startup innovation and portals’ adoption of technology.
So the Israeli media and internet is like Shakshuka – some great cutting edge media technology (eggs) floating in a sea of not extremely innovative portals (tomato sauce).

With technology less of an issue and winning product is the focus in the online and media industry – culture and media consumption habits become the key for creating a winning company. And, we don’t have the visibility of neither. Cause our local market is so different.

Is This The End?
Is this the end of Israeli startup industry? No. There are several amazing content and media companies here in Israel such as Innovid, Outbrain and many more.
But we need to start think differently. It is not like 8200 will start to create cool video players so Israeli innovation won’t die. But it might be that in the future these units won’t be as important in Israeli High Tech as in the past.

Possible Solution
We need a simple plan – and do the so unIsraeli thing to do- actually follow it. We should encourage Hot, Yes and the major portals to invest in innovation. It might be through tax incentives or other ways, but we should give them a reason to do so, cause they don’t have one now.
We should create special incubators for media companies with international media veterans. I have couple of names in mind.
And we should take into consideration that the market is going to change to the worse for us. As Michael said, we are definitely not competitive in price. If the current situation will continue, we will lose our technological edge as well.

What’s Wrong with this  Post?
If you know me you know that I love well established facts. Unfortunately I don’t have the numbers to back the claims here. It is based on personal experience and being in the industry for 10 years.
Would love to hear your opinion.

The Myth of Openness- Response to O’Reilly

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Windows v0.0
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Apple is continuously under fire for lack of openness. Once the industry’s underdog, as it’s market power grows, Apple slowly becoming the target of many attacks, the latest one from Tim O’Reilly.

Interestingly enough, Apple never claimed to be open. Or nice. Apple claimed one thing only – that it knows how to create great innovative products. They aren’t cheap. They are good. and that’s how the Cupertino based company mange to have 10% market share with 83% market cap in comparison to Microsoft.

The myth of openness
Being open is a business decision. Nothing more and nothing less. Some companies harness openness to cut development cost (open source companies are great example). Some do it in order to cultivate a vibrant development community that in turn increase its value and market power (Google is a good example). But there is nothing sacred or better in openness.

The irony is that one of the most so called open companies in the world, Twitter, just dropped an A bomb on its ecosystem, when it announced the development of desktop and mobile clients. While the blogsphere is attacking Apple and praising Twitter, the industry darling itself single-handedly sent the companies that made it so succesful to the deadpool.

So, let’s stop being naive. At the end, it is all about business. The rest is fluff.

Last Chance to be in Think Next 2010

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I’ve written about this event here – and you should be there. I know I will. And because I’d like to see you, here are some last minute codes for free exclusive invitation:
Each code is limited for 1o invitations only, and some of them were already used – so time is NOT on your side.
See you there.

Come to ThinkNext2010 (with Promo Codes)

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Image representing Craig Mundie as depicted in...
Image via CrunchBase

Yes, I know, I am an Apple fan promoting a Microsoft‘s event, but this one is different…
Last year, Think Next was an awesome event – covering innovation, startups and keynote from thought leaders. This year the Microsoft guys are planning an even more exciting event, with Craig Mundie as a keynote speaker (Chief strategy and research officer of Microsoft), Moshe Lichtman (President of Microsoft’s Israel R&D Center and a great speaker), a DemoFest AND – Yes, Natal.
So here is the thing – it is a closed event but a little bird gave me several invite codes. Each code could provide 10 invitations.
After 20 RTs of this post – I will publish a code on this blog.
In the weeks leading to the event I will publish additional codes on my Twitter and Facebook profile.
ThinkNext will take place in Tel Aviv Port, Hanger 11, on April 14th.

Apple, Adobe, HTML 5, Flash and Standards

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Ahava ('love' in Hebrew), Cor-ten steel sculpt...
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Apple doesn’t like Flash. We know that already. Steve Jobs recently called Adobe lazy, and we all know that iPhone and iPad doesn’t support Flash. But the story is a bit more complex than that.

Apple’s opposition to Adobe is linked to HTML 5 – an open standard that would enable developers to use open formats to deliver rich media experiences. As such, this format is a threat on Adobe. And as Apple Insider analyzed in a great post about Flash vs. Apple:

By not putting Flash on the iPhone, iPod touch and iPad, Apple is creating a significant installed base of affluent users who simply can’t be reached via proprietary binaries like Flash and Silverlight. That has successfully shifted attention both to Apple’s own App Store platform for mobile apps and to the open web, encouraging developers to embrace standards-based rich web apps and multimedia delivery based on open specifications.

Yesterday, I quoted this post on my Facebook profile, stating that Apple are promoting open web standards, by supporting HTML 5 over Flash. This created an interesting thread of responses, that you can see here.

I’d like to better explain why I still believe that Apple are supporting open standards in comparison to Adobe. More

The Latest Meme – Apple Bashing

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Bashing Apple is the new black in the blogosphere. It started with Michael Arrington that announced that he dropped iPhone due to the Google Voice Debacle, followed by a less than accurate  (to say the least) post by  Calacanis where he bashed Apple for reasons starting with Google Voice story to their unwillingness to open iTunes to competing MP3 players.To sum it up, some people believe that Apple is nothing but an evil force  with an awesome design capabilites

Now, I don’t consider myself a fanboy (though I own two Macbook Pros, iPod Touch, iPod Nano, iPhone, and a life size poster of Jobs in my living room), but a lot of these arguments are lame.

Let’s start with the definition is Evil. Evil is a big green monster eating small children , World War Two otrocities, the guys who let Kevin Costner do Waterworld, and the inventors of hair metal. A company that creates awesome products but doesn’t like to play nice is not evil, but aggressive at best.

Why iTunes doesn’t allow to sync music with other devices? WHY WOULD IT? Does anyone stops Microsoft, Archos, or any other manufacturer to create their own sync application for Mac and PC? NO. Apple doesn’t block other sync applications, they just have the strange tendency not to shoot themselves in the foot.

Why AppStore approval  process suck so much? Cause they weren’t prepared for the amount of apps they need to authorize. iPhone developers know it, so why are they saying that it makes Apple evil? Unorganized at best will be my choice of words.Yes, Apple needs to get their act together, but at the end of the day – if developers don’t like the way things are they are more then welcome to develop for other platforms. Like Windows Mobile. Ha? no hands? why? CAUSE THE iPHONE ECOSYSTEM IS WAY BETTER THAN ITS COMPETITORS. After years of mobile developers eating crap from carriers and aggregators , who leave them with %10 of the revenues, they have the chance to make decent money. True, it is still hard, but at least they keep 70% of the revenues!

Now, the Apple Tax – the strange claim that Apple products cost more than its competitors. Well:

1. Mercedes costs more than Toyota.

2. You pay for quality

3. No one is forcing you to buy Apple

4. Apple doesn’t have low end products at all. Comparable hardware costs the same  in some markets.

5. Don’t buy if you don’t like it

6. The real Apple Tax is iPhone battery life, but that’s a whole different  post

The funniest thing ever is that people are protecting Google from Apple. GOOGLE. The guys who know almost everything about us, starting with our search history, through our emails, documents and even location. If Apple didn’t do the right thing with the Google Voice application, the big guys from FCC will know what to do with them – but, do you really believe that Google needs protection from Apple?

So let’s put things straight – Apple are selling high priced, high quality technology products, and isn’t interested at all in helping the competition. It is a business, not a peace corps branch.  Strange guys, I tell you.

New York Media Summit's Lesson – We Are All Going To Die (at least in the media business)

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Last week I attended the New York Media Summit, done by Digital Hollywood. The event, featuring keynote speakers such as NBC‘s CEO Jeff Zucker and Microsoft‘s CEO Balmer, had a somewhat depressing message: We are all going to die.

Well, I might be a bit too dramatic. But the conversion of analog dollars to digital cents is still a major challenge to the industry.

Jeff Zucker, besides bashing Jon Stuart, expressed his concern of lack of effective multi-platform audience measurement, and said that media companies must experiment, as traditional models didn’t work anymore: More

Rosh Pina Festival is Just Around the Corner

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Rosh Pina Festival is taking place in 3 days, and the program is full of media and technology insights:

– The role of Telecom companies in the world of media will be presented by Gary Shainberg, VP Global Technology and Innovation in British Telecom, as well as in a panel focused on mobile content with speakers from H3G.

– Living room technologies, that are changing the viewership experience will be presented by Yossi Tsuria, CTO of NDS and others.

– Microsoft will present its online strategy, advertisement position and multi-platform content products, with high ranking speakers such as John Mangelaars, Regional VP, Consumer and Online, EMEA, and Moshe Lichtman, Corporate VP and President of Israeli R&D center

– Independent internet TV angle is covered in a panel I am moderating, with Mike Hudack, CEO of and Robert Millis from Political Lunch.

– ESPN and Axel Springer are discussing the ways they are fighting for viewers’ attention.

– Israeli Broadcasters are discussing their Internet starategies

– Blockbuster, Microsoft, Hot and Yes are debating who will control the living room of the future. 

And many more. For full program, check out

Readers of my blog are receiving a special price – please use the code taya8 while registering.

Apple's New Ads – Direct Assault on Vista

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After mentioning Vista as one of the things that helped Apple grow in the last years, Apple continues in its heads on attack on Vista in two new video ads:

This one is a bit childish but funny:

Wonder what Microsoft will the next…

Microsoft Releases New Ads – Admits Apple's Marketing Superioruty

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Ok, so I am a bit obsessive about the new Microsoft ads, waiting for something interesting to happen. After they kicking Seinfeld out, Microsoft is jut reaping off the Get a Mac campaign. It starts with a Microsoft employee, who says that PC made into a stereotype, and show others who are using PC. Back to lame kingdom.