Why Israel, post Waze, can party like it’s 1999: A response to PandoDaily’s Sarah Lacy
“I have always rooted for Israel, I just don’t believe delusion is a good way to go about building an ecosystem.”
Oh No U Di’int
Sarah Lacy of PandoDaily just rained on our ticker tape parade people. In a piece entitled ‘Why Israel should reconsider too much high-fiving over Waze’, Lacy calls an Israeli belief that Waze/Google may be a harbinger of a new era heralding Israel-based scalable consumer Internet companies, ‘delusional’. In Lacy’s own words: “One $1 billion hit in a decade of attempts doesn’t prove a country as a whole can do consumer.”
Whoa, whoa, whoa!
Let’s get something straight here. No one’s claiming Israel is 100% going to be the next consumer Internet wonderland. What we are saying is Waze/Google proves that an Israeli consumer Internet success is possible. That is now a $1B fact.
You don’t think we can do it?
But just for kicks and giggles, let’s say we do believe we can take on consumer as a new specialty. Perhaps Sarah, the reason why we Israelis haven’t made such a splash in the consumer sector hereto, is because no one’s told us ‘You can’t’, loud enough yet. Israel has always innovated on the heels of two driving forces; one is necessity (small army, lots of enemies – stuff like that), the other is born out of an innate and overwhelming desire to prove those who say ‘You can’t’, wrong.
It’s like when Adrian was screaming at Rocky from the top of the stairs that he ‘Cant win!’, and all it did was get him to jump into his Lamborghini Jalpa for a joyride, more motivated than ever to crush the Russian (classic scene). You Lacy, may be Tech-Israel’s very own Adrian.
Now, I know how much you like things “couched in facts” so let’s do some couching, shall we? First off, Waze is not Israel’s only consumer internet success. Of the billion dollar variety? Yes (so far), but Israel’s got plenty of consumer internet up-and-comers warming up in the bullpen; like Fiverr, Magisto, Farmigo, Viber, etc. – all valued north of $100M. Any one of them has a gambler’s chance that some opportunistic tech-giant will come along and tack on a few extra zeroes as part of some speculative strategy that’ll provide plenty of new fodder for the talking heads to argue why it was the smartest/dumbest deal in recent memory since Waze.
‘A gambler’s chance’, that sounds pretty uncertain, you say. Well yeah, welcome to the world of billion dollar deals. Did anyone predict Tumblr/Yahoo? No. Last I checked, neither of them are Israeli. Whenever a founder forms a startup with billion dollar dreams in mind, they’re basically gambling – I don’t care what kind of passport they carry.
Secondly, to say that Israel has had only one Consumer success after ten years of attempts, as if the entire country had been working away feverishly at Consumer with nothing else to show for itself until Waze arrived – is simply misleading. If we’re going to lump all of Israel into one big GDP tech basket, then let’s at least be honest and acknowledge the fact that Bio-tech, IT, security and defense have been Israel’s primary industry foci up until this point – not consumer Internet. What if it was consumer Internet?
At this you might point to your argument that Israel as a whole has “underperformed dramatically since its tech heyday in the late 1990s.” If by ‘underperform’ you mean that less investors are throwing appalling amounts of cash at companies with no business model other than the fact that they own a .com DN from GoDaddy – then I’m going to have to agree with you. But based on that standard, who hasn’t been underperforming?
You mention how Chicago’s Groupon success has not brought it a reputation of being a tech-hub of any kind, let alone a consumer Internet king. I assume by some extension you believe Israel should modulate its expectations accordingly. I’ll admit, both Israel and Chicago each have a lot of guns, but that’s about as far as I’ll draw the comparison.
Btw, in a recent report on global competitiveness put out by the World Economic Forum, Israel ranks 8th in innovation, just behind the US despite not being anywhere close to occupying the same weight class.
It’s not a numbers game
I get it Sarah, you’re a numbers cruncher. And number crunchers love facts, data and statistical trend lines with which to weave clean pieces of ‘I called it’ writing around, and then to link back to those articles whenever case evidence bears out their premise.
And that’s why we Israelis rub number crunchers the wrong way. Everyone knows Israel is all about innovation; and innovation is all about the new, the unprecedented and the unpredictable. Number crunchers initially told us we couldn’t create tech-giants of any sort in Israel. So we created Checkpoint, Amdocs and Mellanox to prove you wrong. Now you tell us we can’t do consumer Internet. You scream from the top of your silicon staircase, ‘YOU CAN’T WIN!’
Well all I have to say to that is; to beat us, consumer Internet is going to have to kill us. And to kill us, it’s going to have to be willing to die itself. I don’t know if it’s ready to do that, Adrian. I just don’t know.
[Cue music – There’s No Easy Way Out]