President Obama – a role model for Israel’s Ethiopians

For Israel’s Ethiopian community, Obama’s political success stands as an inspiration that equality and justice for all can be a reality, and not just a slogan.An open letter to President Obama Shalom, on his inauguration as President of the United States.

President Obama Shalom,

Tebeka (“advocate for justice” in Amharic) and the Israel Association for Ethiopian Jews are two Israeli non-profit organizations working towards the advancement and full integration of the Ethiopian-Israeli community into Israeli society.

We congratulate you on your election as President of the United States and upcoming inauguration. In our eyes, your election to the most powerful office in the world stands as a symbol to humanity that Martin Luther King Jr.’s vision – judging a person by the content of their character and not the color of their skin – is closer to being attained.

With your rise to the presidency, the eyes of the world are watching your every move. While many will judge your presidency by your political successes and failures, there are still others who will unfortunately not be able to see past the color of one’s skin.

We know that we still have a long way to go. Ethiopian Jews may have returned to their Jewish homeland, but their integration into Israeli society is far from complete. Cultural and language barriers together with stereotypes and racial bias serve as obstacles to full integration. At the same time, the Ethiopian-Israeli community has made great strides towards equality.

As advocates for bringing equality and justice to Israel’s Ethiopian community, we are inspired by your election.

Your shattering of the glass ceiling and political success empowers and serves as an inspiration to all of us working tirelessly to achieve our mission that one day the Ethiopian-Israeli community will break through the racial barriers that still stand before it today, making “equality and justice for all” a reality and not just a slogan.

We wish you the best of luck in your presidency.

With deep respect and admiration.

Itzik Dessie

Executive director

Tebeka

Danny Admasu

Executive Director

IAEJ

Links:

Tebeka

Israel Association for Ethiopian Jews

Ashkelon under fire

Israeli city Ashkelon is under constant missile attack by Hamas, but the residents are determined to stand strong. Their deepest desire: a true peace.As the sirens go off and we wait in our shelter to hear the boom of the missiles, we wonder when this will end. For the past eight years there has been constant bombardment of Sderot and the surrounding settlements. This is not about political issues; it is about civilians under extended fire.

In Ashkelon, 122,000 residents have been under fire with little protection. Most homes do not have shelters as they were built in the 1950s and 1960s. The neighborhood shelters are underground and impossible to reach in 30 seconds. Today alone, we have suffered 14 rocket attacks with accompanying physical, psychological and personal damage.

The resolve of our people to stand strong against this onslaught is a direct desire to end a situation where we have to live in fear.

Our children are climbing the walls as they cannot leave their homes. There is no school, and no shopping centers are open. These children are terrorized to the point where even at the ages of six and seven they are wetting their beds. They demand that the light stay on all night, and even then tell of their nightmares the next morning – all this on a daily basis. Our children will need psychological help to overcome their fears of loud noises and sirens.

“I’m not running anymore.”

Our elderly are unable to reach their shelters, even if they have one. They suffer from the ongoing missiles and cannot leave their homes to buy food, get their medicine, or see their doctors. A good friend, who survived five death camps during the holocaust, TB resulting in the loss of a lung, a quadruple bypass, and cancer, sits in his chair and waits for the sirens. He is not moving as it is too difficult. His answer is: “I’m not running anymore”.

The Municipality and the Home Front are doing a great job as far as immediate response to every emergency; however, we are ill prepared in terms of safe rooms and public buildings with secure rooms.

A number of years ago I was involved in building programs and projects on Israel’s northern border (known as the confrontation line). I would watch katyusha rockets hitting the road in front and behind my car. I was fulfilling a Zionist ideological imperative by assisting those in need. Who would have thought that today I would be living in the “new” confrontation line in the south?

The real desire is that this current war comes to an end that provides a strong beginning. We pray for a true peace that can allow us to reach our potential as a people that are involved in developing new medicines, new science and technology. A country that can assist our neighbors in developing their potential as true partners. Can this dream ever become a reality? Herzl said: “If you will it, it need not be a dream”. I think we can sum it up in one word, “tikva” – hope.

Of missiles and chocolate – a tale of weight gain and war

There are those who would say “the first casualty of war is truth,” and there are even those who would say that what Israel is currently undergoing is not a war.

Whatever the case, I am here in Beersheva – on the “almost” frontlines of the conflict with Hamas – to tell you the first thing to go when missiles start to fall nearby, is your diet.

It could be the chemical high of the carbohydrates, or maybe the immediate kick of the sugar. It might even be the emotional pleasure of indulging in the chocolate in a guilt-free environment. I am no scientist, but my first-hand study has shown that when sirens are screaming, particularly if it is the second or third alarm in less than an hour, there is nothing more calming than a bite of fudge-filled chocolate cookie. Particularly when shared with the random gathering of strangers in the nearest bomb shelter.

Maybe it is different for people who are alone with the families in their residential “safe room,” but since I have spent most of the last week at my office at Ben-Gurion University of the Negev, in the heart of Beersheva, I have had an opportunity to research the dynamics of public shelters. All the more so as my office is on the ground floor, so each new alarm brings in a different collection of random passersby.

For even the toughest among us (and I am pretty tough), find it hard to maintain the stoic façade when faced with the group dynamics of panic and fear. Be it the child crying loudly in the arms of his panting father who has just done the 100 yard dash to the safe room, or the woman hunched in the corner with tears streaming down her face because she “heard the boom,” I have found myself passing out chocolate and cookies, jokes and silly stories. Anything to distract us all from the brutal reality that someone really is trying to kill us. And not just the immediate “us,” but the hundreds of thousands of residents in the cities of Beersheva, Ashkelon and Ashdod, and towns like Sderot, Gedera and everyone else in between.

Israel is not going to go away

According to my understanding of the world, it shouldn’t be this way. Israel left the Gaza Strip over three years ago, offering the Palestinians an opportunity to determine their own future. Unfortunately they chose Hamas, a party that advocates Islamic fundamentalism and a commitment to fight for the destruction of Israel. This agenda can only bring death and destruction as Israel is not going to go away. Nor will we average Israelis accept a reality where the Palestinians can shower a region with missiles and go unscathed.

The Home Front Command has closed all the local sports centers, closed the schools and canceled all afternoon activities. My children are now happily turning themselves into couch potatoes aware that no one will tell them to go outside and play. They are second-generation missile-dodgers: I met my husband in a sealed room during the first Gulf War.

Let me say loud and clear: my neighbors and I are willing to pack on a few pounds if it will mean the ultimate destruction of Hamas’ ability to shoot missiles at us. We are willing to sit in our safe room until the threat of missiles has been eradicated once and for all. (Maybe while Foreign Minister Tzipi Livni is in France this week, she can ask for a humanitarian shipment of quality chocolate to make it a bit more bearable…?)

Do not let the images on the news confuse you. Yes, there is suffering in Gaza. But Hamas chose to smuggle in weapons and ammunition to the Gaza Strip when they could have been supplying food, education, and health care to their people, developing their economy and working towards building a future for themselves instead of towards our destruction.

I blame them for my weight gain.

This article first appeared in Pajamas Media.

Why Israel is a Top Destination for Venture Capitalists

Everyone knows about Israel’s entrepreneurial spirit and great technology. Not everyone knows about the driving forces that created a climate where VC could flourish.John Lennon once said about the early years of Rock’n Roll, “Before Elvis, there was nothing”. On the success of venture capital and high tech entrepreneurship in Israel, to paraphrase Lennon, “Before Yozma, there was nothing”.

Yozma was a program that the Israeli government created in 1993 to develop a venture capital (VC) industry from scratch. Within a few years, dozens of local firms had been established and high-tech companies were routinely raising more than $1B a year on a collective basis from domestic and foreign sources. In 2007, the total figure was $1.76B, which in absolute terms, is comparable with the UK and France and greater than Germany, and per capita, comparable with the US. Since 1993, a number of major foreign VCs have set up branches in Israel, including Sequoia Capital (the firm behind Google and Apple), Benchmark Capital and Greylock Partners, while numerous others have provided financing to Israeli start-ups.

If it was purely about the technology, Israel would be an easy sell: some of the innovations emerging from this tiny country are mind-blowing. A great example is Given Imaging’s PillCam, a disposable pill-sized camera that is encased in a capsule and used to diagnose stomach disorders after being swallowed. Other Israeli developments have caused revolutions in their industries. Voice over Internet Protocol (VoIP) software, pioneered in Israel in the 1990s, has enabled tens of millions of consumers to carry out free telephone calls over the Internet. In addition, VoIP has had a major impact on telecom operators, many of which are converting their systems to transport voice calls via IP. In all, the list of highly influential innovations by Israeli companies is long and includes Internet security, voicemail, ICQ instant messaging and the disk-on-key, the flash memory device that has replaced the floppy disk as a method for saving computer files.

Success Stories in Succession

Although exciting technology is important, what also attracts VCs to Israel is the possibility of a successful exit. Israel has more companies listed on Nasdaq than any other country outside North America, and between 2004-7, Israeli firms raised $2.3B in IPOs on exchanges around the world. Moreover, the market capitalizations of many listed businesses have become considerable. Check Point Software Technologies, which pioneered Internet security, is listed on Nasdaq at a value of $4.1B, while Nice Systems, a leading supplier of digital recording systems, is worth $1.3B on the same exchange. Amdocs, a major developer of telecom billing software, has a market cap of $3.5B on the New York Stock Exchange.

In addition, many firms have been acquired in high-profile transactions, and between 2004-7, almost $18B was spent on the purchases of Israeli high-tech companies. The most significant deals include HP’s acquisition of IT optimization software firm Mercury Interactive for $4.5B and SanDisk’s buy of M-Systems, which invented the disk-on-key, for $1.6B. It is worth noting that these deals were announced during Israel’s war with Hezbollah in the summer of 2006, as was Warren Buffet’s acquisition of Iscar Metalworking for $4B. These are all extraordinary testaments to how the world’s top businesspeople view investment in Israel despite the geopolitical situation. Dozens of other multinational firms have made acquisitions in Israel as well, including Microsoft, Intel, IBM, Applied Materials, Siemens and Cisco Systems. This is important to VCs because it means they know that there is a long list of potential buyers for a successful start-up.

Many of the giant corporations that have bought Israeli companies also have research and development facilities in the country, attracted, among other things, by a superior workforce. As Bill Gates said, “For Microsoft, having an R&D center in Israel has been a great experience… The quality of the people here is fantastic”. This is also a factor for VCs, because they base their investment decisions on the caliber of a start-up’s management and the talent pool from which it can recruit. Per capita, Israel is among the leading countries in the world for the number of engineers, PhDs, patents, scientific papers published, and citizens with a tertiary education. The World Economic Forum ranks Israel highly for the quality of its research organizations, which include the Technion – Israel Institute of Technology, the Weizmann Institute, the Hebrew University and Ben Gurion University of the Negev.

In addition, compulsory military service helps Israelis develop strong leadership and teamwork skills at an early age, and allows them to put into perspective the pressures they face in business.

For some, these qualities are augmented through employment at large multinational corporations, where they attain skills that can be used in start-ups, while the connections made can help form partnerships and win clients. An excellent example is Moshe Yanai, who developed a technology for storage software giant EMC that generated billions of dollars in revenue. He later co-founded Diligent Technologies and joined XIV as chairman, with both firms being sold to IBM for a combined total of about $500M.

It would not be surprising if Yanai went onto form another start-up, as Israel is full of serial entrepreneurs who have achieved successful exits and are building their next companies. Because of their previous accomplishments, they more easily attract VC capital. One entrepreneur who has “done it before” is M-Systems founder Dov Moran. When he established his latest firm, cellular device company Modu, VCs queued up to invest.

Virtuous Circles for Venture Capital

Without taking anything away from Israel’s entrepreneurial spirit, credit is also due to Israel’s government, which established Yozma and other initiatives to help start-ups, support R&D and encourage investment in high-tech companies. And while Yozma and regulatory changes have directly stimulated VC investment, the government’s Office of the Chief Scientist (OCS) has indirectly encouraged this type of financing by running programs designed to increase the chances of success for high-tech companies.

One of the most important is the Israel-US Binational Industrial Research & Development (BIRD) Foundation, which provides funding to joint projects between US and Israeli companies. Since its inception in 1977, BIRD has invested over $245M in 740 projects that have produced sales of more than $8B. Israel has similar bilateral arrangements with other countries, as well as agreements with multinational corporations whereby the OCS helps them identify Israeli R&D partners and provides financial assistance to the partnerships.

Many of the factors that make Israel a top destination for venture investment form interlocking virtuous circles: Israel produces great technology because it has great technologists, which has attracted the attention of multinational corporations. These corporations help improve the quality of the technologists and their commercial abilities, whether as partners, employers or clients, and this contributes to the formation and/or success of start-ups. After some of these businesses are bought by foreign firms, the circle repeats itself once again. And underpinning this whole construct is the government, which created the VC industry and has done much to help it succeed.

Disclosure

Gemini has invested in companies mentioned in this article, Modu and Diligent Technologies.

In tough times Israel’s high-tech sector thrives

Despite the straightened economic situation, investments in Israel’s high-tech industry will pay off for those willing to take the risk.From processors to software, from innovations in online video to security systems, from cell phone technology to better ways to stay safe on the road, Israel is there – at the forefront, designing and producing the high-tech wizardry that has changed the world.

Some of the products produced by the “Israeli brain trust” are well known – like the iconic ICQ chat program, which revolutionized communications, leading to the plethora of Internet-based chat and phone solutions available today.

ICQ is just a case in point: Many Israeli companies developed their “killer” device or application with assistance and investments from venture capital investors and funds – investments that paid off big time when the companies they worked with arrived at a successful exit, either getting bought out by a multinational, or going public themselves, turning into worldwide enterprises which, in turn, snapped up promising Israeli startup ventures. With over 100 Israeli companies trading on the NASDAQ – the majority of them in the high-tech business – Israel is one of the world’s technology powerhouses.

First, some stats: Over little more than a decade, Israel has grown into a high-tech powerhouse, with the technology boom fueling Israel’s amazing GDP growth of the past few years, according to the Ministry of Industry, Trade and Labor. Nearly three quarters of Israel’s $70 billion of exports last year were in the high-tech sector, ministry statistics indicate, and the country has one of the highest per-capita rates of patents filed. In its latest report, the Israel Venture Association (IVA) said that high-tech companies raised $600 million during the third quarter of 2008, an eight-year quarterly high and up 45 percent from a year earlier, and 29% more than the second quarter. The World Economic Forum in its 2007-2008 report called Israel one of the leading countries in the world in technological innovation, ranked first for availability of qualified engineers and total expenditure on R&D.

Strong economic growth

The high-tech boom, along with the solid fundamentals of Israel’s economy, has helped the country sustain strong growth for decades, with GDP rising in most recent years. Israel’s GDP in 2006 reached $195 billion, according to the International Monetary Fund, and GDP per capita was $31,767 in 2007, the IMF said. After adjusting its forecast to take into account the world financial crisis, the Bank of Israel still predicts that GDP will grow by 2.7% in 2009. Israel has free trade agreements with the European Union, the United States, the European Free Trade Association, Turkey, Mexico, Canada, Jordan, and Egypt, and last year became the first non-Latin American country to sign a free trade agreement with Mercosur, the South American common market. According to Bank of Israel statistics, industrial exports grew by some 27% since the start of 2008 and high-tech exports climbed at an annualized rate of 18.2% over the past three months.

From modest roots, many Israeli companies have grown to be world leaders in their specialties. One such company is Checkpoint Software, the creator of the modern commercial computer network firewall. Checkpoint was established in 1993 in a small Tel Aviv apartment, by Gil Shwed, Shlomo Kramer, and Marius Nacht – and today the company has some 100,000 customers and 1,900 employees worldwide, with a market capitalization of over $4b. and 1,800 employees worldwide.

Nice Systems, which is involved in everything from telephony to Web, radio and video communications, has been trading on the NASDAQ since 1996, and has over 24,000 customers in 100 countries, including over 85 of the Fortune 100 companies. Both companies subsisted on investments in their early days, going on to far exceed the expectations of early investors.

In addition to private funding, the government of Israel runs a number of programs that provide help to promising startups. The Office of the Chief Scientist, the Israeli Industry Center for R&D (MATIMOP), and programs like the Israel-US Bi-national Industrial R&D (BIRD) Foundation, among many others, lend a helping hand with logistics, advice, and even funding.

The BIRD Foundation was established by the US and Israeli governments in 1977 to generate mutually beneficial cooperation between the private sectors of the US and Israeli high-tech industries, including start-ups and established organizations. BIRD supports approximately 20 projects annually with a total investment of around $11m. per year. To date, BIRD has invested over $245m. in 740 projects, which have produced sales of over $8b. Since the establishment of the Foundation 30 years ago, the accumulated repayments have totaled $82m.

A bright spot on the world high-tech map

Israel, in other words, is a bright – very bright – spot on the high-tech world map, with so much innovation going on, many entrepreneurs who take their companies to a successful exit come back for another round, hoping to build yet another startup into a successful world-changing company. In an interview with the Israel Investment Newsletter earlier this year, Gemini’s Carmel Sofer said that the rise of the “serial entrepreneur” was an increasing factor on the Israeli high-tech scene. “We were some of the earliest to spot a key trend we see playing out right now: the return of successful entrepreneurs,” Sofer said. “We’re seeing serial founders of startups rebound off successful exits and with money in pocket, begin building new businesses.

“We’re seeing more and more of this caliber of professional starting new companies. They’re not necessarily interested in the money. They have a strong commitment to building a company and they’re coming from a variety of different fields.”

One such “serial entrepreneur” is Zohar Zisapel, one of the most successful and prolific high-tech entrepreneurs in Israel, or anywhere. With 27 startups under his belt, Zisapel’s RAD Group of companies, which he co-founded with brother Yehuda, is considered the top developer of telecommunications startups in the world. In an interview this week with The Jerusalem Post, Zisapel said that he has worked with nearly all the VC companies in Israel, plus a good number from the US.

“In the early days, before there were VCs, we raised money ourselves. We got some help from the Chief Scientist on some projects as well,” he said.

In fact, Zisapel said, the assistance the government offers encourages VC investors to do business here.

“The Chief Scientist and others run excellent programs, which pay off for the country, encouraging not only specific projects, but an atmosphere of development, and a feeling that with enough hard work, a company can succeed. That drive encourages VC investors, to be more willing to put money into startups, and in the end, when there is a successful exit, both the investors and the country benefit. Even if a company doesn’t make it, the technology they developed will find its way into another project,” Zisapel said.

But hasn’t the world financial crisis changed the rules? What are the prospects for Israeli high-tech in the coming years?

Zisapel remains optimistic, saying he expects growth to continue. “So far, I haven’t seen a falloff in technology sales, at least by established companies, although I do expect a dip next year. But things will definitely not get as bad as they were in 2001,” when the dot com bubble burst.

“This bubble is for the banks and real estate, so it will affect high-tech less,” Zisapel says. While VC “angels” may temporarily be intimidated by the market and may hold off on their investing activities in the short term, and some brand new and almost-mature (pre-exit) companies that have a high burn rate may face real problems, he expects most well run developers to survive the crunch.

Invest when times are bad

“If anyone asked me, I would tell them that the time to buy or invest is when everyone else is afraid to, because you can get better terms,” Zisapel said. “Those investing in new companies now are looking at exits in perhaps five years,” when things should be looking much better, he said.

And if there’s one thing Zisapel has proven, investments in Israeli tech pay off for those willing to take the investment risk. When it comes to the innovation that is a feature of Israel’s high-tech developers, nothing’s changed, he says; the fundamentals remain the same. “What’s changed is the market, but the ideas are still out there,” he says.

And those ideas are as great as ever, according to Gemini’s Sofer. “We’re now witnessing the emergence of the mobile Internet, and this is coming from Israel. The mobile phone is no longer being looked at just for its voice capabilities, it’s being considered as a data device,” he toldIsrael Investment Newsletter.

“Many are trying to take Web applications and make them work on the phone. This is just part of the story. Those companies, and many of them are located in Israel, who can start developing mobile applications from the ground up as they look how users will interact with the Mobile Internet are going to be the winners. These companies are working on application development as much as building sustainable businesses.”

Regardless of investment climate, that development will continue – and investors like Gemini, who know a good thing when they see it, will continue to bring the future Israeli “stars” to successful exits.

Printed by courtesy of The Jerusalem Post.