Explaining tech to an “ignorant” investor

Chat with any entrepreneur, just as they are about to launch into an explanation of their whiz technology, and you will get the same response. “I will just take ten minutes to explain the basics of my revolutionary tech, which I invented whilst studying for my doctorate. I will refer to only 10 long words that do not appear in the Oxford English Dictionary.”

To the dumb investor, the story ends up sounding like goobledygook. English? The presenter might have used Vietnamese.

But is that person, who is holding on to the money, really that dumb? Just because he or she does not understand turbines or internet connections or chemicals, remember that they often possess another asset. Their speciality is to spot a product or service, suitable for commercialisation, and a team that can support that drive. 

However, if the entrepreneur retains the language of a university textbook (from east Asia), their investor will cut the conversation short and return to playing poker on his iPhone. So how to avoid the trap?

A recent blog by from 3Sixty tackled this very point. Their three-point approach can be summed up as: -

Think of your data or technical information as a blank canvas. You need to paint a slightly different painting for each audience. You need to ensure that it’s relevant to each audience and that you answer the question – why is this audience interested in this information, what does it mean to them and what do I want them to do as a result of experiencing this presentation.

Simple? I am not so sure. I have seen some clients adjust rapidly, while others repeatedly prefer to whip out their 30 slide presentation at any opportunity, which is often inappropriate.

One techy, who was supreme at “dummying-it-down” was the late Steve Jobs. His biographer, Walter Isaacson, argues that:

…. the real lessons from Steve Jobs have to be drawn from looking at what he actually accomplished. ……. (Jobs) said it was Apple the company. Making an enduring company, he said, was both far harder and more important than making a great product. How did he do it?

Well, Isaacson gives a detailed response to hiw own question. And I will add one further consideration. Surely, one aspect has to be that Jobs made his products appealing and obvious to even the greatest of non-techies, including this writer.

Start-ups and society; Jerusalem’s investor case study

The incubator model for creating growth in young companies is simple and can be very effective.

Build a hub of similar companies. Take a large chunk of equity. Provide them with logistical and financial support. Then sell them off a.s.a.p. for as much as possible.  Get a few deals wrong along the way, but when it goes right, you hit the jackpot. Simple!

Israel has over 20 incubators, one of the first country’s to pioneer the idea. Many were initially set up via a government initiative, although they have since been privatised. One of the more successful one is JVP, Jerusalem Venture Partners, which occupies premises that formally belonged to the mint of the central bank. (Ironic?)

JVP was originally set up by Dr Erel Margalit around 20 years ago. He had previously worked for the legendary mayor of Jerusalem, Teddy Kollek, driving high tech and conferences into a city whose main export up to that point in time had been religion .

Margalit tells a fascinating story, beginning with an initial daunting overdraft. Banks practically laughed when he asked for support for his “new children” that would create software codes or other intagibles not in known established curriculae.

Today, JVP’s website relates of companies like Chromatis, Precise, Cogent and others, whose positions have been valued at over US$1 billion. JVP considers itself a media center, where there is a heavy emphasis on young companies, usually providing content. A simple example are their start-ups in the field of animation, who are currently in discussions with Hollywood studios.

What makes JVC different from other incubators is its vision and its value system. As Margalit stated this week: “The new master is the individual…..To meet the individual, you need creativity”. And Margalit does that on two separate yet connected levels.

First, JVP looks for a long-term relationship with its clients. While many entrepreneurs are often looking for a quick exit to get some money back for their efforts, Margalit’s team keeps to a broader picture. Experience dictates that the big profits are located that bit further down the commercial road – to be attained and realised with patience and continuous evolvement.

Second, and in parallel, Maragalit looks at the community. For example, JVP invests in schools – religious and secular, Jewish and non-Jewish – specifically targeting early teenagers on the edge. JVP has sunk resources into the performing arts. And just for variety, the incubator is involved in programmes for community leadership. The link? Again, it is all about promoting individual development and initiative.

The point being that a successful incubator cannot exist in a social vacuum. When will others learn?

POSTSCRIPT: This week, the Bank of Israel published figures that for the first decade of this century, the income of the average Israeli household rose by 10%. GDP person rose by 12%. However, the income of the poorest households only climbed 4%. Now what would Dr Margalit have to say about that?

Who needs a business mentor?

So, if you could choose four people on your team, would a business mentor be one of them?

Business mentors do not necessarily come up with new ideas. It is unusual for them to invent the next best thing to the IPad or to facebook or to chocolate. Rarely do they come with a specific qualification, and yet they often claim that they can help allsorts.

What’s their game?

It is about a year ago that I was listening to Ron Bowman from the Carnegie Training Center in Israel. He took the example of the top golfers in the world. He pointed out that the average shot per round of number one in the world and of number 120 something is very similar. The difference is seemingly marginal.

However, the gap exists and becasue of that number gets all the lucrative endorsements.

How is that difference maintained? The top guys pay for the best trainers and for mentors. Why? Because for all their natural skills and experience, the players need perspective. They need to keep learning how to see things in a way that will keep them ahead of the pack.

Business is not a sport for most people. However, for most of us the concept of being one step in front and remaining there is crucial. 

Earlier this week, I was sitting with a baker, who had already seen one set up collapse around him. For all his tasty products, he had been unable to realise that he had to organise his time not just around his ovens. Clients needed to be met. Bank managers had to be addressed. Suppliers needed to be spoken to.

He described how he emerged from the gruelling exercise, valuing the need for overview and organisation in his new enterprise. Without expressing it, he wanted (and needed) a mentor.

A few days previously, I met up with a Jerusalem-based service company, owned by an analyst. The business was determined by an undeniably complex workflow.  After some initial successful years, the firm had entered troublesome waters.  For all of the CEO’s strong commercial background, he could not see what was the problem…nor the solution.

He was also sceptical if I would be able to help. After all, I have no experience in his field. What the CEO may be surprised to learn is that the solution lies not in knowledge of his specific sector, but in understanding the definition of creating an operating and practical business model – something which his internal manuals do not provide.

So, who needs a business mentor? Be you a start up in high tech or an established retail outlet or anything else, having access to a wiser and unbiased perspective could make that very significant and positive difference.

Angels, investments, and a holy land of “financial miracles”?

Angel investors are viewed as private individuals who look for financial opportunities, often in high-tech startups. And for the past two decades, the Israeli economy has seen spectacular growth, particularly as a result of its role in the fourth industrial revolution of telecoms.

So has the phrase “the Holy Land” taken on a new commercial meaning? Would it not be plain boring for entrepreneurs if all they had to do was to lift a rod or raise a hand? Even in Israel, an angels do not just appear, offering a million or two in cash.

Cute thought. However, Israel’s Ministry of Finance in Jerusalem in partnership with the Office of the Chief Scientist have come up with a more modern solution to financing new outfits, be they in biotech, new media or cleantech. Conveniently nicknamed “the Angel Law”, the aim is to encourage local investors to put their money early into companies at “seed stage”.

The tax break was recently outlined by David Krisman, KPMG Jerusalem, at a recent meeting of the Jerusalem Business Networking Forum. To put it simply, when an Israeli taxpayer invests up to around US$1.3 m per Israeli R&D company, they will be entitled to a deduction from taxable income, which can be spread out over 3 years.

The new regulations have only recently come into play. Investors, accountants and lawyers are already  crying “oi vay”, as the bureaucrats have wrapped the regulations in…well red tape and double talk. Simple, it ain’t for now.

That said, in an epoch when countries are looking for innovative ways to put money back into their economies, this is definitely a different and positive approach. A miracle it may not be, be it certainly kindles hope for enterprising new companies, creating employment opportunities and creating new wealth.

A Kenyan, Italian and Hungarian in Jerusalem

My youngest son took part in the 2012 Jerusalem marathon. OK, so he only completed the 10km route, as opposed to the full 42.2 km, but he did it.

This year’s race was billed as “Breathtaking”. Official blurb refers to ”the race of nations”.

All I can tell you is that I braved the rain and strong winds to go and cheer on my son at the finish line. It was fascinating to see the people who had come from all over the world to take part. Italy seemed to have a several representatives. I heard Hungary’s name being called out. And of course, Israel has a large number of people these days, who were born in Ethiopia, and they were amongst the leading packs.

The winner hails from Kenya. The time of 2 hours and 19 minutes may not have been close to a world record. There again, Jerusalem is known to be built on 7 hills, and the runners came face to face with several of them as they jogged around the Old City, ending up near the Kenesset, Israel’s Parliament. 

Jews have a phrase – “Next Year in Jerusalem”. I am sure that the 2013 Jerusalem Marathon will be even better.

4 updates on the Palestinian economy

The Palestinian economy may still dwarf in size compared to its Israeli neighbour. It still looks to the international community – particularly the World Bank and the EU - for taxpayers handouts. That said, times are a changing.

1. Exports

The security situation has finally eased enough for Israel to enable trade to recommence between Gaza and the West Bank. On 6 March, after negotiations with the World Food Programme (WFP), 13 lorry loads of date bars from Gaza were transferred to the West Bank, the first such transfer since 2007.

2. Business Development Loans

Thousands of young Palestinians will receive access to financial loans to support their new businesses through a United Nations-backed initiative, which seeks to stimulate the creation of new jobs. The “Mubadarati” loan programme will be carried out by the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in collaboration with Silatech, a social enterprise company that focuses on creating opportunities for youth in the Arab world.

3. Energy

On a slightly negative note, one problem which continues to plague the Palestinian economy is the lack of continuous energy in Gaza, most of which is supplied via Egypt. Ismail Haniyeh, the Hamas Prime Minister in Gaza, has been quoted as blaming his friends in Cairo. Although a temporary solution has been found, it looks as if factories will be operating on a shortened working week for sometime to come.

4. Israeli involvement – Healthcare

While Palestinians and Israelis are not known for being the best of friends, in the medical sphere the story is often different. Palestinian journalist, Abu Khaled Toameh reported this week that the Palestinian Health Minister, Fathi Abu Mughli, organised a tour of Ramallah by an Israeli team of professionals – although the visit was cut short after strong local protests.

This is no new phenomenon. Israel has consistently proved its willingness to cooperate in the medical arena. Official stats show that in December 2011 and again in January 2012, around 1,400 humanitarian permits were issued to allow Palestinian patients and accompanying relatives into Israel. Back in May 2011, the Sheba hospital near Tel Aviv had supported a project to enable 1,000 Palestinians in the Tulkarm area to receive hearing aids.

Just how large are economies in the Middle East? The World Factbook puts the Palestinian GDP per person at US$2,800. Israel’s figure is over US$31,000. The countries of Qatar, UAE and Saudi Arabia leave everyone way behind.

Yet you have to wonder if these kingdoms invest in their Palestinian friends as Israel does.

Israel, the Labour Market, and International Women’s Day

For Israelis, International Women’s Day in 2012 coincides with the festival of Purim, when Queen Esther took on Haman, the wicked minister of Persia. The story describes a triumph for female brawn, daring and courage. The Jews of 127 provinces were saved. Haman and his sons found their place on the gallows, and their property was transferred to Esther’s family.

As in most countries around the world, the position of Israeli women in today’s labour market is not brilliant compared to the male species. Simple stats show that women:

• Earn around 15% less on average per hour.
• Hold less full-time positions (66% compared to 87%)
• Hold only 34% of the managerial positions

In a global context, Israel is doing quite well. ”The country is ranked in 11th place among the 59 developed countries for the participation of women in the workplace. The rankings also list Israel in 24th place with regards to women in executive positions…” And at the top end of the scale, Forbes billionaire grouping, Israel has 13 members, including Ms Shari Arison.

There are three bright spots that I have picked up in the stats.

First, if only a third of managerial positions are filled by women today, back in 1990 that percentage was a mere 16%. That is a noteworthy improvement. And it should be pointed out that Israel’s three major political parties in opposition are led by women, as is the former outgoing chief justice of the Supreme Court.

Second, 56% of all university students are women, again another factor that is likely to lead changes in the future.

Third, figures released this week show that more men from the ultra-orthodox Haredi communities are now to be found in the workplace – a 7% jump to 45% between 2009 and 2011. The point is that in this section of society, it is common for the wife to get the children off to school in the morning and then work part of the day, while the husband studies religious texts on behalf of the family.

Therefore, not only will this employment shift release some pressure on the female section of society. It will also expose more stridently religious men to the machinations of life as a whole. They will no longer be so cut off and they will no longer be so dependent on government subsidies.

So, as ever, “booting the man out to work” is to be seen as a significant social and financial benefit for Israel as a whole.

Holy wine and port

Many a visitor comes to Israel and thinks of the wine industry. Whatever your faith, it is often part of your tradition – something you may have grown up with. And the sign of the local tourism industry is a large bunch of grapes, as per in the bible.

The fact is that until about 25 years ago, the Israeli wine industry was a bit of a misnoma. Aside from the Carmel brand, nothing much was happening. A recent survey from Dun & Bradstreet reveals a very different picture. There are now about 30 major wineries, supported by around 200 boutique set ups. 15 % of all produce ends up abroad with sales up over 5% in 2011, although much still goes to the kosher market.

One of the younger companies is a particular favourite of mine, Adir. It is located in the north of the country, where the vines benefit from the terrain of the hills of the Galilee. One of their most interesting offers is also one of their more recent ones, a “port-like” vintage. It is only 17% proof, but it is one of the best so far to have emerged in Israel to date.

The visitor’s centre at Adir is small but tasty and fun. Aside from sampling “several” of the wines, you can taste their own dairy products made goats’ milk.  

As for the Israel wine sector as a whole, the country hosted two exhibitions within a month on the subject. 2011 was a bumper crop and output jumped. Connoisseurs constantly find themselves invited to yet more tastings. “France watch out” might be too strong a statement, but times have moved on.

Should a business mentor “give up” on a client?

I came across three situations in the past few weeks, each raising different challenges to my position as a business mentor.  All the individuals are located in separate arenas of activity and each one posesses academic and commercial credentials.

Yet the scenarios left me wondering; when do leave a client to get on with their own devices?

Let’s call her Anita, who is desperately trying to rescue her business, which she very much believes in. However, due to family commitments, her work hours are limited. And due to a personal issue, she does not respond readily to pressures of time and responsibility.

Anita is very close to making a major positive difference in her operations. My task recently has been to show her how to make subtle yet potentially significant changes. On the previous occasion that we met, I could see that my encouragement was in danger of being counter-produtive. We mutually agreed that it would be best to end the session early. I left frustrated and anxious.

One week later, a happy Anita sent me an sms - her next big client was signed, sealed and almost delivered. She had shown herself a way to move byond her restrictions.

David has built up an excellent business with a continuous pipeline of clients. As I probed for issues to tackle, all the obvious subjects were gradually ticked off as irrelevant or under control. I was beginning to wonder if I could add any value at all to his workflow.

However, when I asked him to define and measure the success he is striving for, I seemed to strike a raw nerve. And this was particularly interesting, specifically when it to the fact that he never had established a proper vision for his company. 

For all of David’s achievements, he is left wandering for “something”. He is now considering how to manage the concept of “continous success” and why it bothers him. 

Simon described his background to me in great detail. With a deep belief that this was enough to set up in business, he demanded to know how I could help him. Can we construct a business plan in two hours?

I tried to understand Simon’s vision, but was asked not to go down that track. I began to move towards the subject of set up costs. After 20 minutes, he told me that he had done all this by himself, but had not brought the details to the meeting. I spoke about cash flow, but did not get too far with that.

Towards the end of the conversation, Simon rebuked me, saying that a mentor is supposed to listen. After that, he found difficulty in letting me finish any of my statements. Sic!

At that point, I realised that I would not be meeting Simon again, for his sake if not for mine. He had probably transposed his main problem – he had an issue with listening to others, but is refusing to acknowledge it. It will be interesting to discover if he uses another business coach or looks for a more personal and individual form of assitance….. will help him understand his own clients.

4 things the media does not tell you about Israel

The Israeli media is being fed stories of 100 students, actors, activists and otherwise who have been sent around the world to meet contemporaries at university campuses. The articles describe the hatred towards Israel that the travellers encountered.

The Israelis tried to explain how in their view the opinions of the locals were misconceived and based on false premises. Their line was that Israel is a country that suffers from problems effecting its very survival, yet maintains a vibrant, open and democratic society.

No country is perfect. But are the allegations against Israel true or false? Here are three anecdotal pieces of evidence from recent days to help the jury decide.

ITEM 1

 IsraAID is an NGO, which enables Israel to provide support to peoples in need around the globe. For example, it is facilitating the first ever gender-based anti -violence training programme to take place in South Sudan. 30 social workers will be placed in the Juba region, backed by three top-level Israeli therapists.

ITEM 2

Israel has not been totally succesful in absorbing the Ethiopian community into society. That said, you know that times are a changing, when an Ethiopian – and a female at that – is appointed by Jerusalem as its new ambassador in Addis Ababa. Belaynesh Zevadia emigrated to Israel in her teens. Armed with a masters degree and a host of diplomatic experience, she will find herself back in her country of birth for a three year stint. 

ITEM 3

The accusations against Israel’s army are many. They serve to hide the official name of the army, which is ZAHAL - Israel’s Defence Forces. It is an phrase which has meaning on a day-to-day basis. The latest indication of this is how all recruits now have to give a bone marrow samples., which allows Israel to claim that it has the highest registration level in the world. And whilst certain diseases display have a higher level amongst Ashkenazi Jews, this is a data bank open to the whole population.

ITEM 4

The plight of women in the Middle East is well documented and continues to cause concern. Israel is not without its share of domestic violence issues, but that does not put it on a par with the likes of Iran nor the hostility shown by Egyptians towards female journalists in Tahir Square. After all, three of Israel’s leading political parties are led by women, as is the retiring head of the Supreme Court of Justice.