High-Tech Symposium Looks at Business After the Bubble Burst
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[JERUSALEM] - A return to "normal" business practices was the primary theme of the second annual Albert Einstein High-Tech Symposium, sponsored by the Jerusalem Fund of Aish HaTorah, an Orthodox Jewish educational organization.
Venture capitalist Jonathan Medved of Israel Seed Partners, who is speaking at the next israel.internet.com InternetBreakfastForum (click here to register) characterized the current slump in Israel by calling it fallout from "Nasdaq and Nablus." (Nablus is a major city in the Palestinian Authority controlled territories.)
But he told the event's 350 attendees that Israel's startup culture is persevering in the current downturn. He said 595 startups received $3.2 billion in venture capital investments in 2000, three times the 1999 figure. He said 42 percent of those companies operate in the communications industry, which he said has been less affected by the economy's decline than dot.coms.
Bessemer Venture Partners' David Cowan said the damage in financial markets is worse than that of the fundamental markets, which he described as "returning to a state of normalcy" after several years of unsustainable growth.
Yaga chief executive Chris Kitze said he sees entrepreneurial opportunity in the decline, pointing out that the asking prices for top talent and resources had dropped considerably. To this, Jerusalem Global Ventures Chairman Shlomo Kalish added, "Now, you can hire people away from a Cisco."
Panel members agreed that "realism is coming into the marketplace," and said that only "real companies" sporting top management and solid business plans are successfully finding VC funding.
Taking the longer view, Israeli Foreign Minister Shimon Peres said that while land and its resources were once the source of a nation's power, today "science is a richer source of resources." He said that developing technology requires the sharing of ideas. "You cannot have free research if you are not a free society," he said. "There is no need for wars in the economy of the minds."
Nonetheless, not everyone was optimistic. Innovation Investments president Eric Greenberg was named the "doomsayer" after his prediction that "we haven't even begun to see the end" of the market's downfall. He said that VCs are "getting back to business basics," and that companies are "looking for technologies that will make their technologies better."
On the brighter side, though, RAD Data Communications chairman Zohar Zisapel said he feels the time is ripe to invest in early startups that are "looking five years down the road."
The symposium was part of The Jerusalem Fund's weeklong "mission," which runs through March 24. Members of top U.S. companies received awards from the organization, which also led them on a deluxe tour of Israel.