Business Archives - Page 35 of 67 - Michael Horesh Business Coach and Mentor

9 January 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

As a business mentor, I see clients from all backgrounds cope with stress; family hassles, friendships going wrong, too many tasks, cash flow disasters and much more. Enjoyment? That has been left long behind, as they struggle just to keep up with the basics.

A few years ago, I found a great, obvious, but often ignored antidote to this syndrome – physical exercise.

OK, nothing new there. We all see lots of people jogging and biking past us at seemingly humiliating speeds every day. So, it is not just a case of exercise, but a pattern of physical activity that suits you and will help you make a difference. What do I mean?

As a kid, I loved sports, but because I was not much good, I felt that I was not encouraged at school. Thus, I gave up trying, and so for years really did very little on that side of things. Around 12 years ago, I found a gym where nobody knew me. I built up my own routine. And I have moved on from there. Today, I can run at least 11 km on a good day outdoors, hate the hour on the road, but love the tingle of the after-effect.

And what does this have to do with work? It is that lingering glow of satisfaction. You have achieved something for yourself. I sometimes treat every extra distance as if I had to face a challenging work situation. If I can run that, then I can find a solution to my commercial problem.It may sound cute, but you are healthier on the inside and outside.

It is amazing the number of clients, who I talk to first about their health and their approach to life, before drilling in to their work environment. Almost at the commencement of our contract, I encourage them to deal with becoming physically motivated in order to take on other challenges. For some, it can as simple as speed walk for 15 minutes, four times a week, and that does the trick.

To quote a recent article from the Harvard Business Review by Russell Clayton:

“….we found exercise helping work-home integration via increased self-efficacy. The term refers to the sense that one is capable of taking things on and getting them done – and although self-efficacy is a matter of self-perception, it has real impact on reality. According to psychologist Albert Bandura, people with high self-efficacy are less likely to avoid difficult tasks or situations, and more likely to see them as challenges to be mastered. Our research suggests that people who exercise regularly enjoy greater self-efficacy..”

For the record, I have two favourite routes. One is running around the hills of northern Jerusalem and the spectacular views towards the Old City. The other is along the Thames towpath between Hammersmith and Mortlake. Leave your music behind. Let your own deep and private thoughts drive you on towards an improved work situation.

5 January 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

For the past few decades, there has been constant chatter that SMEs – small and medium sized enterprises – comprise over 90% of commercial activity in most of the world’s economies.

Thus, start ups are a theme for conversation amongst economic planners. The gurus, like Seth Godin, love to expound on why SMEs have it rough. Obama, as with many a good politician, never misses of photo opp with a local business owner. etc etc.

For Israel, often called a ‘start up nation’, enterprise and entrepreneurship appear to be in the blood. To reel off some stats as published in the newspaper this weekend, in a country of just over 8 million people, there are about 493,000 registered businesses, of which about half are considered one-person operations. Less than 1% employ over 100 people.

If the average monthly wage is slightly under 10,000 nis – almost US$3,000 – the average wage in a business with less than five workers is about 60% of this figure. Yet in 2012, 15% of small businesses were looking to close down. This number dropped to 2% for operations with more than 20 workers.

Israel’s economy is unique, certainly within the OECD membership. It is a democracy, which has to devote an unusually large amount of resources to defense. Around once in five years, everything grounds to a halt for a month or so, as business owners join the reserve army units in order to protect the country against invaders. And for all that, for every year but one since 2003, the country has produced annual GDP growth of no less than 3%.

And one of the reasons has been a concerted effort – frequently confused by bureaucrats and treasury cutbacks – to invest in schemes to help SMEs. Two classic examples: (A) The Office of the Chief Scientist has a spectacular budget to partner high tech start-ups. (B) A mentoring scheme is in operation through local innovation centres, which allows new services, shops, non-profits, etc to employ the skills of experts at subsidised rates.

The latest competition to promote SMEs was again supported by the country’s largest bank, Bank Hapoalim. The winner, who started out only in 2011, is a chess champion, who now employs 23 people to teach the game to children in a fun way. A lighting company, a chef who specializes in ‘finger food’ for functions, a tailoress of unique clothing for pregnant women were all strong runners-up.

It is difficult to find a common factor that links these entrepreneurs together. Many of them were driven by core will to succeed, usually in the face of adversity. And many had a business mentor of some kind supporting them. All in all, there are some lessons here for bureaucrats and meddling politicians around the globe.

3 January 2014

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Look for Israel in the international press and almost invariably the country’s name is linked to yet another diplomatic crisis. A few will point out that it has a strong high-tech sector, that the Jerusalem government has been at the forefront of international aid efforts, and even that it has an amazingly open educational system.

Even fewer will go on to mention the strength of the economy. For example, GDP continues to progress around 3% per annum, even if this is slightly slower than in previous years. Unemployment has dropped again, somewhat unexpectedly, to 5.5%. Inflation is steady. The stock exchange is showing signs of increased trading following a year of reforms. And so the list of positives goes on.

So if life is fairly stable, what are the momentous events looming ahead for 2014 and how will they impact on the economy of the Holy Land? There are four items to watch out for.

1) Diplomacy

Well, people have been talking about this for 50 (or is it 5,000?) years. Simply put, if John Kerry’s efforts show significant progress, it is fair to assume that more investment markets will open up for the financial planners in Tel Aviv and in Jerusalem. After all, Israel is now part of the OECD and a member of the top tier of stock markets. Greater security will encourage global analysts to follow the likes of Intel, Siemens, HSBC and others such likes, who have set up so prosperously in Israel over the past two decades.

2) New gas reserves

If Israel’s economy grew by around 3.3% in 2013, it is estimated that about 25% that uplift was caused by the new offshore gas industry. And the full effect of the revenue flows from this source have yet to be felt by the Ministry of Finance. Israel’s dependence on overseas supplies is to be severely curtailed and there will be a massive flip to the balance of payments. In other words, the gas reserves are a potential game-changer in the Middle East puzzle board.

3) Structural changes

It is an open secret that Israel’s economy suffers from the effect of three monoliths within the public sector. First, the Electricity Company, which reeks of internal inefficiencies, over staffing, and employees who receive free energy. Next are the seaports of Haifa and Ashdod, where union power ensures that many of the employees are related to each other, usually receiving wages that dwarf those of doctors. And, not to be left out are the farmers’ organisations, who for decades have campaigned against competitive imports.

So long as the voter only has a say once every four years, they are simply expected to pay the consequences in silent… until now? Maybe parts of the Israeli government, populated by politicians with few ties to the prior allegiances will have the courage and strength to end such a farce.

4) The end of economic concentration

It is no secret that for all of Israel’s achievements, too much wealth is concentrated in the hands of a few families. Even the OECD has pointed out the extremes of these absurdities. Fortunately, there may be some changes in the pipeline. For a start, the government is beginning to ensure that the leading financial institutions divide up some of their empire. This will open the industry further to overseas competition, something which should benefit the consumer. Second, some of the strong local ‘oligarchs’ , noticeably Nochi Dankner, have simply got it wrong and have seen the banks call in the debts.

Bottom line for Israel in 2014? Providing the politicians do not blow the gains of recent years through meaningless spending and assuming just a few of the reforms mentioned above come through, the new year looks to be full of economic promise for its 8 million citizens.

30 December 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Every now and again, you come across a line and think to yourself: “Wow – it’s not just I wish I had thought of that. I must implement it. That is going to make a positive difference on my life, my business.”

Just recently I have begun to compile a list of such phrases. I don’t necessarily know the author of each line. However, whether you are a business mentor or otherwise, I believe that they are worth sharing with you. And what better time than now, as we are all contemplating change and improvement with the onset of 2014.

1) “LISTEN and SILENT” are composed of the same letters. In an age of swift communications, when we are all trying to ensure we are heard, I found this to be very pertinent and penetrating. I saw this framed in the conference room of a large accountant’s office in Tel Aviv. Was there ever a more appropriate location?

2) “Time management is a misnomer. The real challenge is to manage ourselves”. Stated by Covey in his influential book ‘The 7 Habits of Successful People’, it was quoted by Dr Sharon Melnick in her work of ‘Success Under Stress”.

3) “Stress occurs when the demands of a situation exceed your perceived ability to control them.” Sharon Melnick.

The next three items, I found displayed prominently in the waiting room of a large dentists’ surgery in Jerusalem. As I looked and considered the words, they did then help me keep my mind off the threat of impending pain.

4) “Quality – countless unseen details are often the only difference between mediocre and magnificent.”

5) “Service – the high road to service is travelled with integrity, compassion and understanding….People don’t care how much we know until they know how much we care.”

6) “The courage of integrity – the highest courage is to dare to be yourself in the face of adversity; choosing right over wrong, ethics over convenience, and truth over popularity………”

Finally, if my readers will let me be immodest, I recently remarkedto a client that:

7) “If you don’t do anything to change, you remain where you are.”

Wishing everyone a successful, healthy and happy 2014. May you continue to seek improvement and to grow on towards your dreams and vision.

27 December 2013

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Categories: Afternoon Tea in Jerusalem, Business, Jerusalem

A recent blog on the Harvard Business Review pointed out 5 ways a client can detect if a business coach is failing in their work. The author, Robert Sutton, is an accepted expert in the field.

I believe he could have added one more item to his list. It’s that ‘change’ word. Do you see new things beginning to happen? As I said to a client just recently in Jerusalem: “If you don’t do anything to change, you remain where you are.”

Change is not a uniform process. Some rush for it. Others need to be guided slowly towards a new goal. In some businesses the problems are glaringly obvious from the start. For example, when a CEO is complaining that profits are kept low, as he maintains a ditheringly high level of stock in his shops, the mentor has a fair idea where to concentrate their efforts.

Often, the most interesting challenges for a mentor are when the commercial processes are sophisticated and just require the most delicate of tweaks. That demands considerable and subtle probing.

The flip side to all of this is when a client complains that the mentor is not doing their job. This is when the coach has to ask if something has changed or not (for the better). If yes, the onus remains with the client to justify themselves.

Otherwise, the mentor has to recognize what has not happened and why. It is all very well to direct the blame on to the client for not changing. There again, why has the mentor not implemented a technique to ensure that move ahead? Back to Mr Sutton.

24 December 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

December 2013 saw the Israeli economy receiving a ‘thumbs up’ from two important sources.

First, the OECD confirmed that “Israel’s output growth remains relatively strong, unemployment is at historically low levels, its high-tech sector continues to attract international admiration, and new off-shore gas fields have come on stream.” Similarly, the IMF has praised Israel’s growth prospects, seeing a further 3.25% improvement in 2014.

There has been much discussion recently if economic growth in Israel has been slowing down. Certainly, exports from the high tech sector have slackened off. Yesterday’s response from the Bank of Israel – the rate of interest remained unchanged at 1% – reflects a deeper analysis. Growth has stabilized to around 3.3%, close to the IMF statement.

Not all is rosy. The OECD is concerned about the widening gap in wealth distribution between the top and lowest earners, and the potential negative effects on social cohesion. The IMF referred to the potential of a housing bubble, as mortgages continue to be approved at a high rate. Structurally, there is an immediate need to reform the structure of the sea ports – slow working practices and high costs. There is no shortage of other issues that can be listed.

The situation was best described by OECD Secretary General Angel Gurria, who said that Israel:

was a source of envy among other members of the organization….(There is ) high growth, low unemployment, and high tech attract more and more investors, while natural gas can change the rules of the game.

For the Israeli economy, 2014 will commence in a positive manner. What is key to understand is how the resources from the off-shore gas fields will impact on the revenues of the Finance Ministry and then to nurture that new-found wealth.

20 December 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

One of the prime reasons that Israel is known as the Silicon Valley of the Middle East is the location of three Intel factories in the Holy Land.

The company has been operating since 1974 in Israel, the forerunner of Siemens, H@P and many more multinational r&d centres. As 2013 draws to a close, it employs around 9,300 people and impacts indirectly on tens of thousands of other jobs. The three existing facilities – in Haifa, Jerusalem and Kiryat Gat – were set up with a combined investment of US$8.61 billion, of which the Israeli government contributed around 16%.

To put those numbers in perspective, Intel exported around US$4.6 billion in 2012. That was approximately 10% of the total exports from Israel.

So, what is the big deal about what Intel is achieving in Israel and what does that mean for possessors of computer hardware in nearly 200 countries around the globe? The answer is best summed up on Intel’s website:

In 2011, we witnessed the unprecedented success of the Sandy Bridge processor. Developed in Haifa and Yakum, it quickly became the fastest selling product in Intel’s history. At the same time, we developed the Ivy Bridge processor, the world’s first processor with 22nm technology. We also led the development of Cloverview, Intel’s upcoming processor for tablets and smartphones. Moreover, we reached mass production of the Cedarview processors for the next generation of netbooks.

Intel intends to continue its expansion plans. In September 2013, it absorbed most of the workers from Micron, a local manufacture of memory chips that had run into financial difficulties. And the parent company is now considering whether to set up a fourth facility in Israel (or in Ireland), where projected investment costs are expected to reach US$10 billion.

A world without Intel or Intel’s presence in Israel? Earlier this year, the esteemed scientist, Stephen Hawkings, boycotted an Israeli-sponsored conference with Palestinians. Fortunately, he did not reject the technology that drives nearly every moment of his life along with countless others.

10 December 2013

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Israel has no problem showing off how it is considered the Silicon Valley of the Middle East. Just look at the way FDI has remained solid in 2013 and that Fitch has backed the economy.

In recent weeks, Israel’s set up has received the backing from a series of very impressive names.

Mexico’s Carlos Slim, reputedly the world’s richest individual, is no stranger to Israeli high-tech, having linked up with Mobli. He is now about to depart with US$7.5 million in order to secure 35% of GStat Software Solutions, which provides data-mining services.
Arnold Schwarzenegger heads Sustania, a Danish-based committee, which aims to recognizes technology that is making a difference to bettering the planet. This year the award was given to TaKaDu. This Israeli software “retrieves and monitors large sets of data from sensors in the water networks and analyzes them in real-time. The service automatically locates and classifies irregularities, such as leaks and pipe bursts, and alerts utilities immediately.” If seepage accounts fro 30% of total consumption, this effort makes a major difference.
“Given Imaging develops an imaging diagnostic system which enables medical professionals to examine a patient’s gastrointestinal tract through a miniature camera placed in a capsule swallowed by the patient.” Located just outside Haifa, the company has been snapped up this week by Covidien, Ireland, for US$860 million.
Staying in the medical world, it was announced yesterday that “healthcare technology developer CareFusion Corporation, USA, will acquire 40% of Israeli infusion pump systems manufacturer Caesarea Medical Electronics Ltd. (CME) for $100 million.”

However, in some ways, the most interesting story comes from the world of academia. The Technion, a relatively small university situated on the outskirts of Haifa, has an impressive record. Dedicated to the pure sciences, it boasts of at least three Nobel Laureates amongst its staff.

Under the leadership of Professor Hossam Haick, an expert in cancer research, the Technion has initiated an on-line course in Arabic in nanotechnology. There were 10,000 inquiries, particularly from countries such as Saudi Arabia and Syria, which would normally refuse to be associated with mentioning Israel in a positive manner. Eventually, 4,000 students registered.

Quoted in the Hebrew press, Haick notes that the scientific information is given away for free. The course is a method to use science in the name of democracy. It breaks down the barriers of the unknown, fear and hatred. I would add that the course shows how open Israeli society is and this is what encourages its technological progress.

9 December 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Palestinians

It is becoming increasingly apparent that for all the complaints of the Palestinians, the Israeli government has made some genuine concessions in the secretive peace talks between the two sides. There have even been unconfirmed discussions with the Saudis.

For decades, one of the basic gripes of the Palestinian Authority has consistently been the argument that Israeli security measures have restricted the development of their economy. The rhetoric has been backed by a plethora of reports from the IMF et al.

In some ways, this is no brainer. If you block the free flow of peoples and materials, whether or not you may be stopping a suicide bomber or two, you are going to impinge on commercial growth. It is worth reflecting that the World Bank reported that the Palestinian economy under so-called Israeli occupation was one of the fastest growing in the world for decades become Chairman Arafat launched the Intifada in 2000. It would be interesting to calculate how much Palestinian people have lost financially for the cause of violence.

Actually, there has often been a second level of economic concern for the Palestinian leadership. While on the one hand, it quietly promotes the boycott campaign of Israeli products, tech, academia and art, it also demands that Israel does more to support its fledgling economy. A classic example is the need to replace Gaza’s dependence on Egyptian electricity.

The seemingly political-correctness of the boycott campaign masks the hypocrisy of the fact that it too acts as a barrier to encouraging trade between parties. Clearly, this is a case of the pot calling the kettle black. And there is a more deeper, and conveniently hidden, question. How much has Palestinian hatred towards Israel cost the Israeli economy?

Two starting points: First, since 2001, Israel has had to invest heavy resources to combat an Intifada, defend itself against incursions from Gaza, fight a war in Lebanon, protect itself against a nuclear Iran, and fight off a global recession. For all that, average annual GDP growth has been around 4%, impressive by any standard. Second, before the Intifada, it is estimated that around 125,000 Palestinians secured regular daily work in Israel. Today, that figure has ‘climbed back’ to around 40,000.

The New Yorker Magazine recently estimated how much Israel has surrendered in lost economic potential because of the existential threat it faces. The journal quotes an economic model from Yusaku Horiuchi and Asher Mayerson, who asked what would have happened if Chairman Arafat had accepted Barak’s proposals in 2000 at Camp David. (It would appear that much of this offer is still on the table today via John Kerry!)

Cumulatively, from 2001 to 2010, Israel’s per capita G.D.P. was $25,513 less than that of synthetic Israel’s. ….For an Israeli family of four, even after income taxes, it might have meant a down payment on an apartment, a college education for a child, or a couple of new cars…..Because tax rates in Israel are generally around forty per cent, there are implications for the government, too: based on conservative estimates (assuming, for instance, that only a third of the revenue goes to taxes), the lost G.D.P. could amount to nearly sixty billion dollars going to the government—a big proportion of the country’s annual budget.

This week, Israel announced that it would help to fund a project to build a water pipeline from the Red Sea to the Dead Sea, which will jointly benefit Jordan and the Palestinians territories. Just think how many other infrastructure projects – schools, hospitals, roads – could have been funded if violence had not forced a different turn of events?

7 December 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Point one: I was speaking to a senior exec of a high-tech company in Israel, where sales have fallen off just recently. And the top management is asking everyone how they are going to find a way out of the trough.

Point two: I have been asked to help two Facebook campaigns, where so far the results have been minimal, at best. What to do?

Well, a lot of the discussions have centred around what is the market, new trends and target groups, who is doing the selling, etc. However, as a business mentor, I often try to present potential solutions in a graphic or pictorial manner.

I have come across two excellent sites on this subject. The first is supplied by The Hinge Team, who offer a technique to turn ‘buyers into believers’. It is interesting that the starting point of their Infographic is that often sellers provide the wrong solution. Yes, sure, there is a major chapter as to why selling is all about building relationships, nothing new there. The Hinge research revealed something far more fundamental.

What we found was an utter failure to see the marketplace in the same way…….we noticed substantial gaps between the way the
two sides perceived and understood key issues.

That is a statement which I urge all involved in sales, directly and indirectly, to think about and then to internalise.

Next up is Jonathan Gabay, an international branding expert, who forwarded to me a fascinating presentation titled “The secret psychology behind persuasive content.” Although this is more aimed at those teams using social media, slide 15 summarises the same points above.

Yet it goes further. The central slide is number 42: “Be Audacious”. Offer the reader something which is of value. And how? Through being provocative and bold, while making sure that you can deliver.

What is curious is why experienced management cannot always see through so clearly to these key starting factors? Time for another infographic.

1 December 2013

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The Israeli Ministry of Finance can feel pleased with itself. Less than six months ago, after a period of political instability, the country’s coffers were plagued by a hole as large as US$4 billion. Last week, Minister Yair Lapid was able to cancel further tax rises, as expenses have been curtailed and revenues have been higher than predicted.

Enter Fitch Ratings, which announced late last week that it was upgrading Israel’s credit outlook to positive. “The foreign and local currency Issuer Default Ratings (IDR) at ‘A’ and ‘A+’ respectively. The issue ratings on Israel’s senior unsecured foreign and local currency bonds have also been affirmed at ‘A’ and ‘A+’ respectively.”

There are several key factors causing this optimism:

The budget deficit in 2013 is expected to be 3.4% of GDP, less than 3.9% of 2012 and far less than the 4.6% originally forecast.
The first flows of off-shore gas production has led to a reduction in the trade deficit.
FDI remains solid.
The Iranian threat, at least for the moment, is on hold.

Fitch was not concerned by the scrapping of tax increases. “It said this does not change its view on the government’s commitment to reduce the deficit in the future. The agency (also) noted the government’s progress in addressing the economy’s structural problems, citing cuts in National Insurance allotments that could encourage people to enter the workforce.”

Two days earlier, S&P hade made similar encouraging noises on the Israeli economy. While sounding more cautious about the government debt and the Iranian factor, the agency believes that there is no property ‘bubble’ as predicted by many and that gas reserves will eventually make a significant difference to the economy.

So after all the back slapping, what does this mean for the Israeli financial planners? Very simple. The government in Jerusalem can now devote less money to interest repayments and redirect resources to infrastructure projects. That should help direct the country to further growth.

29 November 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

Many years ago, when I was setting up my business and struggling, my banker in Jerusalem gave me some invaluable advice.

The gist was: Talk to me, especially when you see yourself getting into trouble. And he added: I cannot promise a great solution, but you being forthcoming will show me that I can trust you. Thus, I will see what I can do.

So true. And now consider that advice in the light of these three stories from business mentoring clients of mine, all of whom can be categorized as a small enterprise (SME). Each has suffered, financially and logistically, as a result of not ‘keeping in touch’ with the clerk, who was supposedly looking after their money.

Story no’ 1: My client had not doubted the integrity of his bank, who she had been using for over a decade. She had rarely needed their help. Everything appeared dandy. That is until she hit the painful area of poor cash flow and was seeking a loan. So, she fixed an appointment.

However, despite arriving on time, the clerk was busy with somebody else….for over 30 minutes. After all, my client was not a known commodity. Despite eventually being seen by somebody else, she started digging around and realized that she was paying exorbitant charges. To cut a long story short, she now speaks regularly with a different bank who had offered her a loan on much better terms.

Story no’ 2: After much legal haggling, this client’s bank was forced to lift the restrictions that had been placed on their account. So that seemed fine and there would be no further ramifications, correct?

Years later, my client entered a different branch of the same bank, where is was considering opening up a new account. The conversation was stopped after 2 minutes. He had received a straight refusal. Why? The original branch had not completed “the paperwork”, and thus it appeared on the computer as if they had an existing account, which was still restricted. Again, my client had stopped liaising too early.

Story no’ 3: In this case, my client took over an existing business. In the change-over period, a couple of cheques bounced, even though there was sufficient reserves. Nevertheless, my client ignored the lines on his statements, as the cheques went through the following day.

that he had been (and therefore still was) a bad credit risk. He paid the price for not communicating as much as he could have done.

The lesson: Small and medium sized businesses have a tendency to run away from the banks. It is time-consuming and they are often seen as unfriendly if not simply inconsiderate to the requirements of SMEs. If you suffer like that, then move. My experience is that most bankers are looking look to provide their customers with practical solutions. T o learn about what is available, it is the responsibility of the business owner to talk regularly to his ‘supplier of financial services”.

27 November 2013

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After much speculation, it is now official. “Apple has completed an acquisition of the Israeli company PrimeSense, a sensing company whose technology has powered Microsoft’s popular Xbox Kinect for Xbox 360.”

It is very interesting to note that since the passing of Steve Jobs, Apple has clearly looked towards Israel for some of its key tech purchases. For example, earlier last year, Anobit , a semiconductor start up, was snapped up for at lest US$400million. AuthenTec’s security capabilities are used in latest iPhones. And Apple operates 3 r&d centres in the Holy Land; in Ra’anana, Haifa and Herzylia.

Tthe latest rumour is that the engineers in Ra’anana have come up with a Bluetooth application, which will be incorporated into a new product called the iWatch. This is scheduled to be launch during the summer of 2014.

Effectively, Israeli tech will play a key role in most of Apple’s leading products, just as Samsung, Intel, Microsoft and others have benefitted in the past decade or so.

26 November 2013

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The previous posting observed that for all the hype of start-ups – around the global and specifically in Israel’s Silicon valley – between 30-50% do not make it. One way to pitch successfully to investors is emphasise the ‘why‘ of the project. People tend to buy in to your vision and dreams rather than fantasised markets and wow tech.

That still leaves a conundrum: How to present the ‘why’ in a convincing manner? Enter Yochi Slonim, a successful serial entrepreneur, who has been marketing, creating, managing and selling high-tech starts in Israel for nearly two decades. And for all that, Yochi poses a very simple question. How is it that in 99% of all presentations, when a CEO enters a room, backed by a great team and tech, the viewing panel of investors concludes with “thank you, keep us informed and good luck”. What is the cause of the continual misfit, which Yochi himself has encountered on hundreds of occasions?

In a recent appearance at the Jerusalem Business Networking Forum, which I had the honour to moderate, Yochi gave the answer under the title “startups are from Mars, investors are from Venus“. The core point is that both sides have similar goals, but they are seemingly located on different planets. They look at the universe from very different perspectives.

Yochi gave several examples of the misfit.

An entrepreneur often explains to an investor how they can be the first to be part of a “new generation” of whatever. Actually, investors tend to be cautious people, and thus they want to hop on to wave in second place. I am associated with a biotech project where that is the common response, for now.
Similarly, when outlining a classic SWOT analysis, an entrepreneur is happy to talk about the “Opportunity”. The market is mega large etc etc. In fact, many an investor will read / feel / internalize the word “risk” in place of opportunity. And most investors are risk-averse.
Innovators often talk about the past experience of their small team in large corporates, when they should be concentrating on relevant skill–sets acquired over the years.
Entrepreneurs become so intent on securing revenue from their tech that they ignore the fact that investors tend to seek multi-revenue possibilities in order to minimalise risk.

So what does this add up to?

When an entrepreneur explains his dream, why people should believe in him, he or she needs to know his audience. Obvious, no? But how many of us truly answer the question before we open our mouths for the first time in a meeting?

25 November 2013

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“The start-up sickness” was the title of a long article in the Israeli press over the weekend. Even international analysts have long recognized the Holy Land as being the Silicon Valley of the Middle East. According to the World Bank, FDI to Israel reached over US$10 billion both in 2011 and in 2012.

So using Israel as a case study, consider that between 2004 and September 2013 6,886 high-tech companies were opened up, roughly 700 per annum. In that same period, 2,781 closed their doors, leaving a net balance of 4,105 (60%). What makes them ‘keep coming’?

Certainly, it generally takes less money today to create a start-up. However, as one commentator observed, the chances of achieving a mega exit are as great as a 16-year-old female singer becoming the next Rihanna (who has performed twice in Israel). For the record, over the past decade, there have been 106 Israeli exits with a value of more than US$100 million.

99% of start-ups look for money from VCs or angels or small grants from public sources. When creating a pitch, most apply the same rules – make the presentation short, concentrating on the tech, the market, the team, the vision. To put it simply: “Deliver a killer elevator pitch and pray as hard as possible”.

There is another starting point. And I was reminded of it, while watching a slightly dated TED Talk from Simon Sinek. He asks what makes a few individuals encourage others to take action, whether their idea is ‘better’ or not? The answer is in the title of his best-selling book – Start With ‘Why’. By asking somebody to understand ‘why’ you have created a new business, you are forcing that side of the brain of your audience to consider the need for change. Action needs to follow.

In the words of Sinek, people buy into ‘why’ you do something. The ‘what and how’ have an importance at a different level. How to convince those same people about your belief, well that comes in part two.

22 November 2013

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“The Tel Aviv Stock Exchange’s benchmark TASE-25 index closed at a record high Wednesday, capping a 16.2% surge that began last August.” A day previously, UBS analysts had observed how foreign investors are returning to the Israeli stock market, possibly for the first time since it entered the MSCI developed markets index in May 2010.

So, what’s going on? There are a number of factors at play, all coming together at once.

First, it was stated at the time that it would take foreign investors some time before adjusting to TASE’s new positioning amongst global indexes. Previously, TASE had a strong reputation in the MCSI emerging market section, yet then had to prove itself from scratch amongst the big players.

Second, TASE has thrown out its old management in recent weeks and has brought in Yossi Beinart, who boasts significant experience in American markets. Since the process begun in the mid summer, turnover has been climbing steadily back towards 2010 levels.

Third, on the financial level, companies, especially banks, are reporting profits. The economy is relatively stable. Interest rates are set to remain low for the next year. All positive signs that speculators look for.

So, what next? There is a threat of a strike at the ports, which could put a temporary hold on TASE. And some analysts believe that “the recent rally is not out of love for stocks, but because of dislike of the alternatives.”

Maybe. One fact is clear. Overseas players are considering the TASE. The initial inflow of revenues from the new gas fields is also playing a role in this renewed interest. If financiers are looking for a party in 2014, Tel Aviv may be the place to visit.

19 November 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

“I need to create a marketing campaign, right now. What do I do? Will Facebook save me? What do I need to?”

These are the types of questions that I have been faced with just recently from clients who clearly fit into the ‘small business model’. When they turn to the internet for help or scan the works of international coaches, they tend to find responses suitable for multinationals. So, what is a suitable answer for them.

Here are two simple guidelines, based on case studies with my customers.

First, consider the works of Hinge, a company who clients feature in the Fortune 500, but who has developed a practical marketing planning guide, which can be adopted by the corner shop in a small village.

Beyond the buzz words, Hinge forces the reader to consider 3 basic questions:

What is your message – a.k.a., what are you really selling? Can you describe this in two lines so that it fits in to a bottle?
Where should your growth come from?
Are you aware of the differences of online and offline marketing campaigns, and how they need to be integrated?

These questions need some very careful thought and discussion. You cannot just launch into a campaign without establishing your own fundamentals about who you are. I strongly encourage my customers to consider what is their value proposition for their own potential customer. And that statement applies to a one-person service provider, a non-profit, start-up or otherwise.

Now let me take this one stage further and more on to my second point. Increasingly, people are turning to Facebook for an immediate and cheap solution. It is the in-thing to do, no? In the past two weeks alone, at least three of my own clients have asked me to find them Facebook marketing experts.

Fair enough. However, the above rule about value proposition definition still applies. The external expert cannot create this for you. And in addition, as sales campaigns via Facebook is still a relatively new industry compared to traditional advertising, by definition these so-called experts tend to lack experience.

Here is an example of what I mean. Yesterday, I was meeting with a client in Jerusalem, when we held a conference call with a somebody involved in social media. He could point to previous clients who had given him testimonials about the number of clicks he had achieved for them. Great. Very genuine.

However, these assignments had been in the non-profit sector or politicians.Mar My client is a business, seeking to sell a product. They are not just looking for ‘likes”. They want money to be transferred to their bank account. This demands a significant and additional set of thought processes. Could Mr. Expert provide such a service?

Marketing campaigns are sophisticated creatures. Their content is driven by understanding the key fundamentals of your business, regardless of its size or type of organization. It is the task of the business owner to identify those characteristics, before sums are laid out at the implementation stage.

17 November 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

El Al is Israel’s national airline. Although privatized nearly a decade ago, it is still seen as the people’s airline – you come home, back to the Holy Land.

For all the cuteness, El Al has not had an easy history. For years, the joke was that its name stood for “Every Landing Always Late”. The acronym actually means ‘skywards’). The company has had to bear extremely high security costs. (Israelis noted that 9/11 could not have happened on El Al planes). Due to the Arab boycott, it is restricted from flying directly to parts of the Far East, thus increasing travel time and costs.

On top of all this, the Israeli government has agreed to a policy of ‘open skies’ with the EU, which will force down the prices of tickets. Easy Jet has long been ahead of the game, continuing to add more and more flights to Tel Aviv.

And despite all this, El Al is in the money. Last week,

The carrier reported $643.29 million revenue, up 6% or $37.52 million from the corresponding quarter. Gross profit rose 11% to $159.74 million and net profit soared 54% or $20.31 million to $57.86 million. Sales expenses were $56.41 million for the quarter.

The reasons for the massive and continuing improvement in the financial statements are varied, including seasonal factors, a new hedging policy for purchasing fuel and additional government support for security costs. In parallel, the company has adopted a more aggressive pricing attitude to meet the challenges of increased competition.

As the land of miracles has shown, even smaller international airlines can make profits.

15 November 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel

Last week, my wife wrote an email to a colleague abroad, arriving around midnight their time. She had a response within minutes. As my wife put it, these are people in corporate America who are married to their jobs.

My first thought was that more fool you guys. When companies like this undergo management change, they are often the fools who lose their jobs – hard working or not. And what about their families? I was drawn to recall all this by a series of posting on the blog pages of the Harvard Business Review. “You need more sleep” led off one writer, claiming how more companies are encouraging workers to relax more often.

In similar fashion, Tony Schwartz asks: “What Would Make You More Satisfied and Productive at Work?” Surveys repeatedly find that only 30% of employees are truly engaged during work hours.

A few weeks ago, a client of mine called me up one early evening. He had had a lousy day. At the start of a sales campaign, everything that could go wrong, did so – customers walking out etc etc. As business mentor, what could I suggest that would help? Naturally, I was supposed to be full of sympathy.

I took a different track. I asked two simple questions. How much had he slept the night before kick off? Answer……..30 minutes. How much had he eaten in the past 36 hours? Answer………a couple of pieces of fruit. With that additional set of info, I added three statements. Before anything else, eat a fulsome meal. Then pick off the three most critical problems to solve. Finally, ignore the rest and go to bed early. Two months later, there was a large bonus in the bank account.

The body is like a car. If you try to run off nothing, you get nowhere!

Here in Israel, a recent article in Hebrew cited the head of the local branch of Unilever, Anat Gavriel, and Dov Kotler who is in charge of a major credit card operation. They both advocate full breakfasts with the family. Similarly, Ayelet Levy-Peled is the CEO of Laline, an Israeli cosmetics company with branches overseas. She insists when possible on not starting meetings after 5.00pm.

Next time you try to get 25 hours work out of a regular day – 6 days a week, just consider how effective you are being.

13 November 2013

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Categories: Afternoon Tea in Jerusalem, Business, Israel, Jerusalem

So what’s grabbing the news headlines in Israel? Will Iran go nuclear? The true cause of Arafat’s death? Why poor rainfall is not causing a drought?

None of these. The question of the day is why does Israel have billions of extra dollars in its treasury and what to do about it? Such are the problems of life!

Step back. Twelve months ago, as Israel entered a general election, it was generally agreed that around 15 billion shekels, say US$4.5 billion, of expenses had not been financed. By the summer, the Minister of Finance had managed to secure a package, which included raising VAT by 1% to 18% and cuts in various social security payments. Very painful.

Today, there is a very different picture to describe.

Targeting ‘trapped profits’ of large companies such as Teva, 4.4 billion shekels was secured, when only 3 billion had been hoped for.
Government spending is at least 6 billion shekels lower than predicted (up to October 2013).
On-going tax collection has resulted in an additional billion shekels beyond what was budgeted.

By my maths, that makes the country 11-12 billion shekels better off than had been foreseen even six months ago.

There are still large problems to overcome. The Defense Ministry is demanding a large slice of this extra cake. The government and port unions are probably on a collision path, which could impact on export revenues and more, maybe commencing next week. Politicians are demanding a retreat from the high level of VAT. etc etc.

In fact, the true test for Yair Lapid, the finance minister, is just about to begin. Introducing tough economic measures just after a general election was not easy, but he had a mandate. Kudos for his political courage. However, managing successfully the fruits of that policy will be even more difficult. Now for some real work.

Pages

An obvious way to put some fun back into your biz life

Small business, big economies – Israel’s model

Israel’s economy in 2014 – 4 lookouts for the analysts

7 key business mentoring phrases for 2014

Change – the role of the business mentor

Israel’s economy, easing comfortably in to 2014

Intel, Israel: You and your tech

10,004 additional investors put their faith in Israel

Israel’s economy: What if…….?

Where will my next sale come from?

Fitch and S&P back Israel economy

3 reasons why small businesses need to talk to their banks

Why does Apple want a bigger bite out of Israel

How start ups can get it right (2)

How start ups can get it right (1)

Happy days at Tel Aviv Stock Exchange

Help – my small biz needs to create a marketing campaign

Can El Al make profits for its investors?

Work long hours and remain healthy?

Israel’s latest financial worry – too much money

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