Israel’s success in fostering very successful and profitable technology start ups is well known. One thing that became very clear during Ed Vaizey’s trade delegation to Tel Aviv and Jerusalem last week is that Israeli companies are rapidly becoming a major force in cross platform media markets, and not just for underpinning technologies. Israeli entrepreneurs and investors are establishing businesses that are becoming world leaders in just about every area of the emerging digital economy: cross platform format development, transmedia production, search marketing, social media and online advertising, applications of metadata, game development, online commerce.
One young investor, Yaron Carni, who has recently sold his company Lab Pixies to Google, described the ingredients of the cocktail that is contributing to the rapid growth of the sector. They have their origins, he said, in the joint effects of national military service and a persecution complex: “not just talent but tenacity, insatiable questioning of authority, determined informality, unique attitude towards failure, teamwork, mission, risk and cross-disciplinary creativity.”
The theme of interdisciplinary creativity was a constant reference point during the four-day visit. It was most persuasively expounded by Erel Margalit, the founding partner at Jerusalem Venture Partners (JVP), which has helped to create some of the largest companies to come out of Israel over the past eighteen years.
“People misread Israel’s competitive advantage,” he says. “It is not technology, it is creativity.”
Margalit has followed the country’s transformation into a global hub for the high tech industry from the start; he founded JVP, now a $900m fund, in 1993. He spoke to the delegation at the JVP Media Quarter, a converted Bauhaus building originally built by the British as the national Mint. It now houses the venture capital firm, its Media Labs (a technology incubator), a dozen start-up and portfolio companies, a performing arts hub, and a social profit organization "JVP Community". The vision is to fuse technology, creativity and social action in one complex as a hub for innovation.
JVP's success as the most profitable investment group in Israel is, says Margalit, based on the insight that it is innovators and entrepreneurs from creative industries backgrounds who will drive the development of products and services that people will want to use, to own, to pay for: “The club where one engineer meets another engineer and a company is created needs to widen. We need to bring in writers, advertisers, story-tellers.”
The value of combining the artist’s or the designer’s approach to creative development with technological R&D was echoed at a reception at Microsoft’s R&D Centre in Tel Aviv. They’ve clearly learnt something as they’ve watched Apple overtake them as the most valuable tech company in the world. In a presentation on their approach to innovation, the centre's director Zack Weisfeld, outlined seven key drivers; the last one, which he insisted was critical to all their R&D efforts, was “design matters”.
Weisfeld was followed on stage by a team from Shenkar College of Engineering and Design. They all echoed his theme: if R&D and innovation processes are to result in products and services that people will love, if they are to create magic, they need to combine design creativity with engineering excellence. Neither is enough on its own.
Many of the start-ups and established businesses which presented to the delegation were living demonstrations of this principle.
They included NDS, a technology company whose conditional access technology is in all the subscription set-top boxes in the UK and Keshet, Israel’s leading commercial broadcaster. At the heart of NDS’ demo was a radical re-imagining of the EPG (Electronic Programme Guide) based on a fluid and intuitive user interface designed for gestural interaction. Keshet (whose most recent success in the format market has been ‘Homeland’, a US remake of their series ‘Prisoners of War’) spoke of their ‘Rule of Engagement’: “Content is measured by the echo it creates; if the audience doesn’t respond, we didn’t succeed.” They have recently launched a joint venture, Screenz, with the specific intention of developing (and exporting) cross-platform formats. Screenz brings together the expertise of Mako, the digital arm of Keshet, and digital agency The Box’s merging of content and technology to help broadcasters deal with radical changes in viewing habits worldwide.
UK companies across the media and technology sectors could learn much from their Israeli counterparts. They may not have the advantage of the huge investment in military technology but they can emulate the fusion of deep technical expertise, creative imagination and commitment to design excellence with a mastery of business skills which is driving Israel’s start up culture.
The future success of the digital economy will depend on the geek, the luvvie and the barrow boy learning to understand each other and work together. Many Israeli businesses have figured out how to make that happen.
Frank Boyd
13/03/12
Other companies that pitched to the UK Israel Digital Delegation included:
Outbrain: www.outbrain.com
Outbrain offers a content recommendation engine on the web. Outbrain provides publishers a service for recommended links to increase traffic and generate revenue, and marketers a way to their distribute content alongside publisher’s own editorial recommendations.
Eyeview: www.eyeviewdigital.com
Eyeview develops technology solutions that enable advertisers and agencies to create and target personalized video ads at broadcast quality on all screens. Eyeview technology enhances brand quality video ads by adding dynamic compositions that are updated and targeted in real-time.
Adotomi: www.adotomi.com
Adotomi is a performance marketing specialist for Social Media. Adotomi is a Facebook Preferred API Partner focused on bringing high value users to clients. Using patented technology Adotomi is able to deliver relevant users in a scalable and cost effective way.
TheBox: www.theboxsite.com
TheBox specialises in creation of true cross platform original content for benefit of both advertisers and entertainment of viewers and users of TV, the Internet, mobile and all other forms of media.
Contextin: www.contextin.com
An engine for optimized bidding and media acquisition for performance advertisers over the web.
Kenshoo: www.kenshoo.com
Kenshoo is a digital marketing software company that engineers technology solutions for search marketing, social media and online advertising. Brands, agencies and marketing providers use Kenshoo Enterprise, Kenshoo Local and Kenshoo Social to direct more than $15 billion in annual customer sales revenue. The Kenshoo Universal Platform delivers automation, intelligence, integration and scale to make better marketing investments.
Techloft: www.techloft.co.il
An incubator/digital workspace on Tel Aviv’s “Silicon Boulevard”
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