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Afternoon Tea in Jerusalem Blog

In addition to my work as a business coach, one of my interests is blogging about life in Israel. This is a country full of contrasts – over eight million citizens living in an area the size of Wales. You can see snow and the lowest place on the globe in the same day. Although surrounded by geopolitical extremes, Israel has achieved a decade of high economic growth. My work brings me in contact with an array of new companies, exciting technologies and dynamic characters. Sitting back with a relaxing cup of strong tea (with milk), you realise just how much there is to appreciate in the Holyland. Large or small operations, private sector or non profit, my clients provide experiences from which others can learn and benefit.

Israel tech takeaways – where Cisco leads….

22 June 2012
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Categories: Business, Israel, Jerusalem

Earlier this week, I wrote how I am bewildered how Israel, a nation of less than 8 million people, continues to hold such an important position in the global tech revolution of the past two decades. 

I listed five stories that I had come across in the past few days. However, I did not realise that I was only just scratching the top of a very large iceberg. The comments of John Chambers, CEO of Cisco and visiting Jerusalem this week, put this into perspective.

There are a lot of opportunities here. It’s the second country, after the US, in terms of start-ups and entrepreneurship. There are companies here that do not grow enough, and what we do is to bring these companies into the Cisco family and grow their activity. I don’t think that there is a better time to invest here, in partnerships, venture capital and help our partners expand.

Chambers is specifically looking for partnerships between Jews and non-Jews. And where he leads, others are right behind him. CA from California has committed itself to setting up an innovation centre with Tel Aviv University. “The new center will focus on enterprise computer infrastructure management and cyber security. CA did not disclose details about the planned investment in the center, but it will reportedly total several million dollars.”

 And for specific successes of the week, let’s start with Flash Networks from Herzylia, just north of Tel Aviv. The company was named co-winner of the prestigious Global Telecoms Business Innovation Award for Mobile Content and Services Innovation.

Second, LucidLogix is reported to be providing support to millions of global game users via its partnership with Intel on motherboards.

Third, Orad Hi-Tec offers video servers, which are cheap and effective solutions for all the video cassettes stored in TV station warehouses. It is exceeding helpful when TV stations need quick and ready access to old sporting tapes. Bottom line is that the company has become Israel’s main rep at the 2012 European Football Championships, as several large organisations like the BBC use their services.

A country of 8 million people? A country surrounded by geopolitical issues? A government that can barely run the fire brigade? Israel’s youthful private sector has found a method to get around these restrictions.

5 unexpected takeaways about Israei tech

19 June 2012
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Categories: Business, Israel

Combining the phrases “Israel” with “start-up nation” in the same sentence has almost become a cliché.

Back in the mid 1980s, Israel’s commercial fame centred around the theme of growing tomatoes in the desert. Although that agricultural tech is still very evident, hightech / cleantech / biotech / nanontech etc is what drives the numbers today at the Finance Ministry in Jerusalem.

That said, every week, I am stunned afresh at what Israeli companies achieve. So, I have compiled a brief list of items that I have spotted in the past few days, technologies which will quietly impact on millions around the world.

1)  Israel and the Galaxy S3

Samsung’s new smartphone, Galaxy S3, is clicking up the sales around the world. How many of the new users are aware that part of the security package was developed by Discretix Technologies Ltd, located 25 miles north of Tel Aviv? The company ships over 4 million of its devices monthly.

2) Israel and Google

Google’s r&d centre in Israel has long been considered a success for the company. Chairman, Eric Schmidt, reiterated the triumph in an appearance this week in Tel Aviv. That same evening, he appeared on a national news programme, where he stated categorically that one of the reasons for his latest visit to the Holy Land was to evaluate additional Israeli tech firms to purchase.

3) Israel and Euro 2012

While Europe’s 16 leading football nations thrill their fans in Poland and in the Ukraine during June, behind the scenes there are hundreds of companies supplying products and services to the players.

Delta Textiles, based in Carmiel in northern Israel and known as an excellent employer, was contracted some time ago by Nike to manufacture high quality socks. It is not just the topsplayers from France and Portugal, like Ribery and Ronaldo, whose smelly metatasarls are benefitting from Israeli machinists. By the end of the year, it is assumed that Barcelona, Manchester United, Inter Milan and several other great European sides will also be sporting this attire.

4) Israel and Boeing Aircraft

Elbit is one of Israel’s leading defence manufacturers. With the help of its sales, the country is consistently one of the world’s leading exporters of such systems.

The company has just secured a contract to supply “a low-profile head-up display (LPHUD) that will be part of the Advanced Cockpit System for Boeing fighter jets.” At the first level, the contract is valued at US$80 million with further opportunities available.

5) Israel and Facebook

Face.com was created in 2007 and has developed a capability for facial recognition of photos. Five years later, the company has been purchased by Facebook for a reported US$100 million. Last year, Zuckerberg’s team invested US$70 million in Snaptu, another Israeli start-up.

By way of an afterthought, I recalled how Israel has a lot of critics if not haters around the globe. They will boycott anything to do with the country. I wonder if they have asked the question how the world would function without access to these and similar capabilities.

How business mentoring can make a difference – 6 case studies

17 June 2012
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Categories: Business

In May 2012, the BBC announced a series of events to engage young adults in the London borough of Hackney, not normally known in recent years as an area of economic enterprise. Last week, I was invited to attend a radio recording, featuring 6 commercial initiatives by members of the local community, all in their 20s and who had received at least 10 hours of expert mentoring.

The event saw the competitors pitch their hopes and aspiration to a panel of three successful businessmen, who were known in the borough. Although there was a financial prize going begging, it was soon evident that the more important catch were the connections offered by the judges.

Mega kudos to everyone involved – it was a fascinating success. The six projects included: –

  • An aggregation service to compare university courses for school leavers
  • A media studio
  • An aggregation service for start ups seeking legal advice
  • A sports academy for distressed areas
  • Products for sufferers of dementia
  • Fun headwear and accessories

They were all given four minutes to present and a further four minutes to answer questions. With some irony, either they concentrated excessively on their business model but excluded the vision, or the other way around. Of the six, five already had some level of initial sales.

All clearly benefited from the mentors, who had come from different sectors of the business world and had given their time gratis. And one of the consultants told me how they had benefitted from the experience.

It was hard to choose a winner. However, judging from the reaction of the audience, the preferred pitches came from those who valued the “SUCCES” acronym from the authors of “Made To Stick“. Whatever you are selling, it should be simple, unexpected, concrete, credible, emotional and have a story line”.

That is what mentors will be telling their clients – it is a safe methodolgy to help ensure that your product or service will be around for sometime to come.

Investing in the Palestinian economy – who gets what?

12 June 2012
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Categories: Business, Israel, Palestinian Society, Palestinians

It was recently pointed out to me by a blogger friend that American federal agencies are encouraging those willing to listen that they should place greater investment in the infrastructure of the Palestinian economy. The aim is to move away from the traditional support given to UNRWA or non commercial elements.

A World Bank report in September 2011 describes “the necessity of both sustainable economic growth and effective institutions for a future viable [Palestinian] state. (And)……investment opportunities have arisen in Palestine. For example, in 2011 the Rasmala Investment Bank established the Ras­mala Palestine Equity Fund, which seeks to “achieve long-term capital appreciation by investing in a diversified portfolio of growth and value stocks listed on the Palestine Stock Exchange in securities anticipated to undergo initial public offerings as well as securities at their initial public offering.

One reason for this encouraging change of approach is that the senior Palestinian leadership has yet to shake off the whiff and evil of corruption that pervaded the Arafat dictatorship. To paraphrase a second blogger, Arnold Roth:

Muhammad Rashid, Arafat’s money-carrier (literally), has been arrested. He has been running the Palestine Investment Fund, which in turn controls the Arab Palestinian Investment Company. This organisation is dominated by Tareq and Yasser, the sons of President Abbas.

May not look good to outsiders. The Palestinian Authority (PA) has reserves. Reuters recently observed that:

The Western-backed PA ….says it has poured around $7 billion into the Gaza Strip since its rival Hamas seized control in 2007, but complains that the Islamist group is stymieing its efforts to balance its books……The PA says it spends $120 million a month, or more than 40 percent of its whole budget, on salaries and services in Gaza. 

Remember, those salaries includes dosh for those people launching rockets daily into Israel. And they more than likely funded the “security” provided to a journalist friend as he toured Hamas smuggling tunnels last month. It is also useful to recall that much of this funding comes from the generosity of European taxpayers – over 1 billion dollars since 2008.

Maybe Western leaders are finally aware that this displacement of resources is adversely effecting the average “man on the street” in Ramallah or Jenin. For example, Palestinian sources note that hospitals are facing closure, as they are starved of income. And because the PA has consistently ignored its water obligations under the Oslo Agreement with Israel, villages in the Bethlehem district are now running dry.

Where next? Difficult to say. Palestinian banks are also in a precarious position as they have been struggling to feed the needs of central government. One thing for sure – if you want to invest in the Palestinian economy, make sure that central sources are nowhere near the distribution table.

When spin fails in customer relations – a case study with El Al

11 June 2012
1 Comment
Categories: Business, Israel

All of us have set answers when faced with a difficult question from a customer. Most of us know that every so often, it is worth ditching the blurb and just saying sorry. So, when a large company ignores that rule, effectively just laughing at the customer, you just feel that you want to get annoyed.

Take my situation early last Friday, checking in at the airport. Over the years, I have liked to fly with El Al. They may not get everything right, but you can see the staff trying.

Once past security, I had to weigh my bags and obtain a boarding pass. I was clearly over the limit of 22kg, but an extra 5 kg had never bothered the airline in the past.

The young clerk, with a bright and pleasant smiled, explained that I would have to pay an excess fine. I was stunned, and without raising my voice, expressed my displeasure.

She repeated her smiled, stood her ground and then launched into a long and embarrassing explanation. She told me that I had made the choice to fly with El Al and that I knew the conditions before agreeing to purchase the ticket and that……… As you can imagine, her smile did finally disappear during this gust of corporate patriotism.

I went away. I shifted a few items into my hand luggage. I returned to madam, who allowed me to be 2kg overweight, thus directly contradicting her own rules. In parallel, she tried to reassure me again that she was right.

When she eventually she understood that I felt that it was too early to argue over the matter, she halted the flow of words, professionally finished her work, politely handed me my boarding pass and we parted company. Meanwhile, in the line next to me, another assistant was repeating the same mantra. Thanks goodness for El Al training manuals, chapter 7, section 8, para 3.5

However, I felt yucky. Madam Smilely assumedly felt triumphant. And El Al may be losing a customer.

Let me be clear. Her facts were correct. And she was definitely within her rights to charge for excess. No argument. BUT…………..

For decades, El Al have not charged me. Why now? Why a change of policy? Could El Al not invest 5 lines of time and explain the new policy on the ticket, in advance? 

El Al is the dominant airline at that airport. How about a few signs to warns of the decision to enforce the rules?

Bottom line, El Al was technically correct but they were definitely not right. They were wrong, and the clerk did not have the grace to admit it. It hurts me to write but the more I thought about her smile, the more I felt how it lacked some of its value.

As for me, I just felt that I was being exploited for a little bit of extra potential profit. I wonder who I will fly with next time.

Who is to blame for inequality? Israel as a case study

6 June 2012
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Categories: Business, Israel

Can you join the dots?

Item 1: Approximately 25% of Israel’s population live below the poverty line.

Item 2: In the OECD’s recent “Better Life Index“, Israel ranked in the lower third of countries. Specific issues of concern included lack of affordable housing and poor education facilities.

Item 3: Despite Israel’s highly efficient milk industry, the prices of dairy products are 44% higher than the OECD average.

Item 4: Israel’s government issued the Kedmi report this week, which proposes mechanisms to lower the price of staple groceries and household items. The main emphasis appeared to be on blaming the strength of large supermarket chains amongst barely 8.8m people.

Poverty does not just exist in a vacuum. It is the result of multiple socio-economic forces coming together at one time. In Israel, the problems are compounded by two externalities:

  • Ultraorthodox families are encouraged to have children; 8 or 10 is not uncommon
  • Arab families are also large, and there are often less employment opportunities in such areas.

Imagine you are a business mentor and you had one challenging question that you could pose to an Israeli decision maker. What would it be? I suggest something like: “Why do governments continue to support positions that only support dominant commercial powerhouses and thus detract from price competition?”

For example, excise and regulation make the import of fruits and vegetables totally unprofitable except under specific conditions. The result is that even when there is a drought of a certain product, the consumer has no choice but to pay or to forgo. The winner remains the farmer or the shop owner.

Similarly, two chains control around 60+% of the food retail market. With the price of land high, little space available for out-of-town shopping districts and prohibitive advertising costs, the two companies look set for long and safe future. Again, the winner-loser break down is clear.

What next? Time for Israel’s government to do its job rather than act on behalf of interest groups who pay for its election campaigns.

Can Israel’s economy weather the Euro crisis?

3 June 2012
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Categories: Business, Israel, Jerusalem

Proctor & Gamble believe that Israel is a premier “start up nation”. After all, “Israel is the biggest destination for global venture capital per capita“. In parallel, the recent discovery of commercial gas reserves means that :

Israel could meet its own electricity needs in the future and possibly become a net exporter to a gas-thirsty region. This would bring economic and political benefits as well as regional clout at a time when Israel’s regional standing is more uncertain than it has been for decades.

Israel’s economy is due to grow at around 3% in 2012. Unemployment is still falling, for now. Tourism figures continue to soar. All is rosy. And yet…..

The mandarins in the Bank of Israel and the Finance Ministry, who sit less than half a mile away from each other in Jerusalem, have known for over a year that they cannot ignore the fallout from Greece, Spain et al. While Israel’s banking exposure to these countries has always been minimal, around a third of the country’s trade involves the Euro zone and the UK.

For some analysts the credit crunch has already arrived. Yes, the Bank of Israel is demanding higher capital adequacy ratios. some of my clients are finding bank managers less receptive than in the past.

And today’s newspapers are full of rumours of higher VAT and corporation tax to be imposed as early as mid 2012. This will be combined with cuts in budgets of the public sector.

On the one hand this is not an encouraging scenario. However, there are two takeaways that should give the local decision makers a lot of hope.

First, if Europe does try to infect her neighbours with its cold, then Israel can face the attack from a position of strength. Second, by taking preparatory measures now to ensure that the Euro problem can we weathered, Israel will be able to use its new raw materials to generate greater economic wealth in the future.

Quack technology from Israel

1 June 2012
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Categories: Business, Israel, Jerusalem

Israel has gained a deserved reputation as the “silicon valley of the Middle East”. Just how much Israeli innovation now enters the homes of peoples around the globe is not possible to assess precisely.

That said, the list of commercial breakthroughs reported just this week ensures that with this knowhow, the world is better off. Here are five examples.

Let’s start with a very simple idea; bringing a pop-up educational book for pre-school kids to the TV  screen. Nickelodeon has purchased over 50 episodes of “Quick, Quack, Duck”, conceived by a small team of graphic artists just outside Tel Aviv. It should be no surprise that one of Jerusalem’s largest hightech incubators is new media centric.

Facebook’s pounce for Face.com, valued at close to US$100m, has been twittered to bits. What many have missed is that Shutterfly, a leading internet personal publishing service, has acquired Photoccino from Haifa for around US$20m. As the press release notes, the synergy between the companies will allow customers “to more efficiently organize and select the best photos from their ever-increasing archives so they can quickly and easily create photo books, calendars, cards, and photo gifts.”

Richard Branson is never one to miss an opportunity. He is partnering Strauss, arguably Israel’s largest food conglomerate. Together, they intend to sell water purifiers to the domestic market, initially in the UK. This is an environmentally friendly solution for making cups of tea or handing out cold drinks.

And we cannot ignore the cosmetics market. ICG ventures has barely 15 fulltime members of staff, with an HQ in Tel Aviv and offices in Shanghai and in New York. For all that, since starting out in 2005, the company has sold over 5 million units globally of its compact cosmetic units. With annual sales of around US$25m and boasting Sephora as a leading client, many more women are going to benefit from their products over the next few years.

Life Sciences, Israel, Biotech – what’s the link?

30 May 2012
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Categories: Business, Israel, Jerusalem

Three headlines from Israel’s financial press in the past week: –

There are plenty more stories like that out there. Bottom line, the Israeli life science and biotech industry is thriving, consistently achieving medical and commercial breakthroughs.

It should be no surprise that the annual Biomed conference, which took place last week in Tel Aviv was quite awesome. By taking a rather arbitrary measure of noise and buzz, it was way up on the previous year. And the reasons speak for themselves.

  1. Israel prides itself with over 700 active companies in the field, 6th in the Euro league
  2. Israel ranks second globally in bio-pharma patents per caipta.
  3. Teva, Jerusalem, is the 15th largest pharma in the world and largest generic manufacturer.
  4. The country is a pioneer and leader in cell therapy.
  5. Aside from Burrill, Clal and Orbimed have major new investment funds in the pipeline.

 I am personally acquainted with a story of one senior overseas exec, who visited the Holy Land for the first time during Biomed. To paraphrase what he said: you can read all you want about Israel being a start up nation and being the Silicon Valley of the Middle East. However, when you actually see the activity unfold before your eyes, you know that you have to engage hands-on.

Health, choices and mentoring

27 May 2012
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Categories: Business, Israel

Health brings a freedom very few realize, until they no longer have it.

Thus quotes Dr Robert Books on nurse Bronnie Ware. Although, it was only last week when I mentioned Brooks’s discussion on “regrets” and business, I feel that this sentence is extremely powerful and needs further comment.

In mentoring, I frequently come up against people, who seem to have been plodding along quite nicely. Then, almost suddenly, they come to a realisation that they are in a rut. However, on analysis, the truth is often very different. Matters have not been good for ages, but they have been able to deceive themselves until now.

And that is often the fact. We allow ourselves – out of convenience or even from fear – to delude ourselves that all is OK. After all, if we have our health, things cannot be that bad.

How many times have we seen people review their situations, only after suffering by an illness? And it may not be chronic. Some years back, I ripped a muscle in my lower leg following a freak accident. I could no longer charge off to meetings at will. I thought my life was at end end…………until I realised just how many of these appointments were not so important. It proved to be a painful but valuable learning experience.

Similarly, when I sit down with clients and work on their time management skills, I am often surprised by what I hear. I have to encourage and mentor people to utilise basic common sense, when planning a regular day.

For example, so many skip first appointments of the day, because they do not feel so good in the morning. What frequently happens is that they have worked late the previous day and / or not eaten properly. The body is effectively saying “no can do”.

Net result? Having tried to fit in extra work hours, the client loses out on “production time” the following day. Worse, potential revenue may be sacrificed.

So before you have any further regrets, make sure that your schedule is not so heavy that you are mistreating your body. When you understand that limitation, you will realise the scope of your freedom to act.

Why Jerusalem is attracting heavy biomed attention

25 May 2012
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Categories: Business, Israel, Jerusalem

Burrill & Company is arguably the largest biotech investment fund in the world. The recent announcement of a new Israel-centric fund, which is to be based in Jerusalem, has caught the attention of many.

It is not just that the fund will be capitalised at over US$200 million. As one exec from a major American biotech company said this week on visiting Israel for the first time: “I just had no idea what existed out here.”.

Burrill has raised over US$1.4 billion in the past 14 years. Its teams reviews over 100 business plans in an average month, of which barely 1% make it through to investment stage. Today, the emphasis is on the 3P concept in medicine; personalised, predictive and preventative.

Yet for all that, why Jerusalem?

The answer was “revealed” last night at a meeting of the Jerusalem Business Networking Forum (JBNF). Graciously hosted by the Jerusalem municipality in the council chamber, participants heard from two keynote speakers; Mayor Nir Barkat and Jeffrey Miller, who is a special advisor to the Burrill fund.

Barkat was ably backed by other council members (Naomi Tsur and Yitzik Pindrus) and the biz dev teams of Chen Levin and Avi Salman from the Jerusalem Development Authority. As they explained, Jerusalem has barely 800,000 residents. Its main industry has often been tourism, already 44% in 2012 despite the European recession. This holy City most represents the geopolitical problems of the country.

And yet, it is the home of Teva, one of the largest manufacturer of generic drugs in the world. It boasts five leading academic campuses. There are over 130 known biotech companies in the region. Walk into the tiny labs of Hadassah and you can almost literally see IP being created before your eyes.

And that’s what Burrill himself has long recognised. As Miller was ably to tell his audience,  setting up the fund was a natural fit for Burrill. Simply look at Intel with its massive r&d plant in north Jerusalem and one can see what talent the city contains. While the politicians and the world media are focused on front page headlines, local citizens of all backgrounds are looking to change the world as I write.

It is almost 2,000 years since cartographers regularly placed Jerusalem at the centre of their maps. Maybe they were predicting something that the Burrills of our era have learnt to recognise. Who will be next to join them?

Israel, OECD and the world of happiness in 2012

23 May 2012
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Categories: Business, Israel

Spot the contradiction:

  • Of the 36 countries assessed in the OECD’s Better Life Index, Israel only came 25th.
  • Compared to the average OECD individual(6.7), Israelis are happy people with a score of 7.4 out of 10. Denmark came top with 7.8.
  • The OECD forecasts 3.2% GDP growth for Israel in 2012 and 3.6% growth in 2013, one of the best performers in the organisation.

So what’s the point? This week, I met up with two European delegations. Most participants are visiting for the first time, asking what makes this country of 8 million people tick? It is nearly 50% desert and surrounded by a geopolitical mess. The stats above could indicate that everything is about to implode and yet…………….

And yet, people walk around with a smile on their face. The economy is doing wellish. Despite the threat of a deep European recession, I spent today looking at the expansion plans of two companies.  Life ain’t too bad.

Bottom line: The OECD has churned out another set of interesting stats. They should be studied for what needs to be improved. However overall, the report does not seem to match up the reality when it comes to ‘the land of miracles”.

Avoiding regrets in business

21 May 2012
1 Comment
Categories: Business

As stated before in this column, I am a great fan of the writings of Dr Robert Brooks. In his latest monthly offering, he comments about regrets in life. Specifically, Brooks refers to the “phenomenal clarity of vision that people gain at the end of their lives, and how we might learn from their wisdom.”

If only we had done such and such is the common refrain. However, Brooks takes this theme one stage further.

Most of us still have time to take actions to address our current regrets in a realistic fashion. Regrets are part of the human experience, but if we are burdened by too many of them, there is a lessening of joy and satisfaction. It is for this reason that it is beneficial to embrace and apply the wisdom shared by dying patients about our own lives.

I often see this scenario played out when I sit down with my business clients. A typical conversation takes the following format (and I simplify somewhat).

  • (Me) What do you want to do?
  • (Client) I don’t know.
  • You sure?
  • Well, I could try XXXX
  • OK, how?
  • Well, by doing blah blah………(and then there is a sigh)
  • What’s wrong?
  • Well, it does not allow me to do……….
  • To do what?

And it is at this stage that the client blurts out a full explanation of what they want to do in life. Absolutely amazing every time. Frequently, the words are the basis for a business plan. Somewhere in the back of their minds, the client has been storing up enormous details about how to go about implementing what they really enjoy.

So what stops them moving ahead? Fear? Their partner in life? Lack of support? You name it.

My point is that so many of us end up stuck where we do not want to be. For example, I recently helped somebody map out a strategy for their business. Fine, clear and practical, agreed. And then I noticed “the sigh”. You see, as he finally admitted, he actually wanted to be in a different profession altogether.

It is over 30 years since the Monty Python team wrote the Lumberjack sketch, abandoning a desk job for roaming the countryside. It was considered a brilliant joke then. Maybe it is finally time to take their ideas seriously

We work in jobs, salaried or self-employed, when many of us wish to be elsewhere. Are you prepared to change?

Jerusalem Syndrome 2012

18 May 2012
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Categories: Israel, Jerusalem

There is a Mosque, Church and Synagogue all under the same roof. It sounds like the opening line of a politically incorrect joke. In fact, it is a description of the building, where the tomb of the biblical prophet, Samuel, is located.

The site, known locally as Nebi Samuel, can be found just outside north Jerusalem. Nearby are a few homes belonging to people of the three faiths. The tourist kiosk is run by a moslem under supervised by a well-known rabbi from Bnei Barak. The Israeli army used to have a small base on the premises – the highest point in the Jerusalem area – but it was removed some time back.

Down the road in Givon, so to speak, archeologists believe that the “Ark” was rested by the Children of Israel, as they approached from Jericho. More recently, the building of the tomb,  has witnessed battles in 1948 and 1967. When I visted there last month, a large busload of pilgrims pulled up.

Welcome to Jerusalem 2012.

For thousands of years, Jerusalem has attracted them all. It was the crusaders who first made Nebi Samuel a holy place. Simon Sebag’s Montefiore, a biography of Jerusalem, eloquently describes how Roman princesses, wandering Jews, and more recently refugees from Sudan, all have seen Jerusalem as a haven, a place they must be.

Look up the Jerusalem Syndrome on the internet, and there are those who try to explain it as a medical phenomenon. Something mystical seems to enter the soul and draws people forth. There are even a few rabbis, who insist that their followers must ask for permission before leaving the holy city.

As for me, Jerusalem Syndrome is also the name of a cultural festival taking place this week in the heart of the city. Music, raconteurs, farmers’ fair, arts and crafts – it was a great atmosphere wandering around the back streets late last night. Carefree and open to all.

This coming Sunday, Israel officially commemorates the reunification of Jerusalem during the 1967 war. Be it in Nebi Samuel or in the heart of the city centre, the city will be packed with all-comers. That is a something to be proud of and to celebrate. This is a syndrome that can be a role model for others to copy around the world.

Who cares about stock control? 2 case studies from Israel

13 May 2012
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Categories: Business, Israel

Putting on my hat as business mentor, I casually asked my Jerusalem client today how many units of stock he possessed. A one-person operation, in business for less than a year, I did not expect a large number.

Sure enough, without being too precise, I received an answer commensurate to one month’s sales. Good start.

What is the value of that stock? I tested the response and found it unreliable. And how much of this is dead stock? Again, no depth to the stat.

The point is that within a few months of starting out, the client had failed to realise that they had already “burnt” a certain level of capital. This was not going to be converted into money in their pocket. Likewise, the client had yet to appreciate (until today) that the gap between the desired revenues and the hole in the bank account could be explained by the units in the stores….a.k.a “stock”.

Ouch! Suddenly, the importance of planning stock took on a new and higher meaning. The net damage at this stage is only a few thousand shekels  – one American dollar is worth nearly 4 shekels – but this is still a fortune for my client. The good news is that they can start to correct their mistakes relatively early on in the game.

Now compare that scenario to “Kika, Israel“. The Austrian home goods multinational opened its doors in the Holyland less than a year ago to a massive PR blitz. Thousands flocked in during the first few days of trading. But late last week, the Israel franchisee ceased operations.

How come? Those running the company, both at parent and local level, are coated in retail experience. Yes, they paid high salaries to those at the top and invested megabucks in marketing. 

However, they were not able to pay suppliers. To me that is a euphemism for not controlling stock flow up to and including the point of sale. In other words, for all the hullabaloo, nobody strong enough was watching the basics, which was what my client was learning today.

It will be interesting to see who is in their jobs in a month’s time and continuing to trade – one little businessman or the bigwigs at Kika Israel?

Israel’s economy – which way now?

11 May 2012
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Categories: Business, Israel

“Moody’s international credit rating agency on Wednesday downgraded Israel’s banking system outlook to negative from stable.” Not brilliant. Other reports point towards rising unemployment and large gaps in the fiscal budget. And there is a feeling that “election economics” may start to kick in soon.

However, while it may look as if Israel’s economy is about to implode, that is not the case. Stats-wise, growth for 2012 is still on schedule for 2.8% – 3.0%. And with monetary decision-making led by people of the calibre of Stanley Fischer, it is difficult to see Israel choosing the path of Greece and other fellow European strugglers.

The problems exist. They must be tackled now. Populistic political outcrys need to be thwated away by the Prime Minister. What gives me heart is a string of articles featured on the website of The Times of Israel. This newish on-line newspaper posted numerous features just this last week, which together illustrate why Israel’s human potential has yet to be developed in full. 

To take a few stories at random:

  1. BUSINESS WIRE reported that Sialo Technology from southern Israel has announced receiving CE approval for marketing its unique dental implant, which allows for noninvasive surgical procedures.
  2. Israel’s Biomed capabilities today enable paraplegics to finish marathons and increase the number of red blood cells in those suffering from aplastic bone marrow.
  3. At ChipEx2012, tech guru, George Gilder, described Broadcom, Cisco and Intel as Israeli companies. 
  4. As for the number of overseas companies listed by country on NASDAQ, Israel is second only to China.

Israel needs more than just great hightech corporates to build a successful economy. That said, what is described here, just a few examples of what is happening on the ground, is probably one of the main reasons why the largest private equity group in the world, Blackrock, is looking to set up in the Holy Land.

And the fact that Blackrock is considering opening their doors is a veritable vote of confidence in the economic future of the country.

Israel’s “non-election” economics

8 May 2012
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Categories: Business, Israel

On Monday night of May 7th, Israelis went to bed believing that they would be voting in a general election by early September. By the following morning, after the Prime Minister had struck a deal with an opposition party, the “blah blah” show had been postponed for until late 2013.

What had happened and how to explain Israel’s coalition politics to an outsider would take more than a simple blog to describe. The effect on talks with the Palestinians, handling Iran, trying to get the trains to run and maybe even on time, those are all issues that I will leave to others to evaluate.

I just want to examine the local economy for a few moments, a matter which Bibi Netanyahu is proud of and is prone to recall his days as Finance Minister. To cut to the chase, Israel boasts an excellent record over the past decade. Even in 2012, growth will end up close to 3%, very praiseworthy compared to many of its international trading partners.

However, there are many problems on the horizon, and now is definitely not the time to play election-economics. For example: –

The indications are that the budget deficit for 2012 is going to end double what had been budgeted, mainly due to lower tax revenues. So there will be little extra money for popular voters issues, which the Prime Minister will seek to distribute.

Now one way to finance a deficit is to encourage people to buy government bonds, and that often requires a higher than normal rate of interest. However, the Bank of Israel is looking in the other direction. And just to ensure that the matter is even more complicated, if interest rates were to be jacked up, then the shekel will rise in value (even more). That in turn will jeopardise the profitability levels of Israel’s exports.

Anything else? Well unemployment that had struck an all-time low of 5.2% a year ago is now forecast to leap to 6.7%. There is growing concern about the increasing gap between the haves and have -nots. And the government is refusing to challenge interest groups; farmers, who prevent competitive imports, or unions at the ports, who keep import duties high, or the Electricity Corporation, which allows pays the bills of its employees.

And where is the government in all of this looming economic concern? Well, so long as the power brokers in Jerusalem strike another deal to put off elections and keep shtum, I guess that nothing too catastrophic will happen to the folks at the top.

To hightech or not to hightech? That is the question

30 April 2012
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Categories: Business, Israel

Entrepreneurs — whether they’re an unemployed person striking out on their own or a seasoned veteran trying to get the mojo back again — must do things differently in order to survive. Everyone must change, especially small-business owners.

Thus starts out a practical and interesting blog on “7 ways to help ensure your business to succeed”. Fine, but what do you do at the beginning of your journey? How do you know if you are pursuing the right track?

Here are two recent case studies from Israel, using “hightech in very different manners.

In the right hand corner, we have Mul-T-lock, who for years have been converting blocks of steel into security systems for homes and cars. Slam, dunk sort of stuff, but not so scintillating.

However, after two years of development with Starcom Systems, Mul-T-lock have developed a product that will send the owner an sms or e-mail, if a burglary is about to take place. From anywhere to anywhere. I claim that this may be even more useful than a Pinterest account?

In the left corner is 35 year old Ro’ee Yulos, who left a solid career in hightech and moved over to the love of his life; pots for garden plants. Yup, it does not get more basic than that. His pot designs are covered by a patent, which was pinched, but they are now on the short list for the 2012 reddot design award.

Together, these two companies show what can be achieved with some lateral thinking  (and a touch of old-fashioned human enterprise). 

 

Is there a DNA to the successful entrepreneur? A holy case study

27 April 2012
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Categories: Business, Israel, Jerusalem

The internet is plastered with items on how to be a “successful entrepreneur”.

After a brief thought, it is a bit of a silly statement. What categorises somebody a success?

  • That they survive?
  • That they generate a certain level of sales within a year or five years?
  • That they become a chain of outlets?
  • That they commence operations outside their home territory?

When I talk to many people just starting out, they rarely have such a defined vision. They are merely looking to get past the next financial crisis.

This week, my eye caught two interesting articles, which gave a perspective on how to judge success. The background is that Israel has just celebrated its 64th birthday and the country’s press is full of “well done” type items.

The first piece asked each of ten well known local personalities to name a person, whom they most respected, mainly for their contributions to commerce. The final list was ten people or heads of companies, who had taken a long hard road to establish themselves. Fairly obvious stuff.

What impressed me far more was a report from the holy city of Jerusalem. Six separate businesses were identified, where each one had been founded by somebody under the age of thirty years old: –

  • a gym
  • real estate school
  • an internet site to connect parents with private teachers
  • a specialist packaging operation
  • an event planner
  • a baby products distributor

That is a varied list. The owners come from all parts of society. Some had already been working. Some had a degree. Some had a small amount of private capital to start with. Yet there is no single obvious common denominator.

Let’s go back to what I wrote about Ronen Nimni, who by the age of 15 had worked out that he possessed something “extra” in the commercial world. 35 years later, he has progressed from selling pictures door-to-door and now owns several restaurant chains in Israel. Not too much formal education in Nimni’s story.

The point being that Nimni understood that he had a talent and went out to discover a way how to exploit it. He believed in himself. And that same theme comes out in the story of the people above. 

This week, I had my second meeting with the owner of a new pizza parlour, also a man still in his 20s and resident in Jerusalem. He has a clear vision for his business and he wants to take it to a chain of a few premises within 3-5 years. That is his target, because he does not feel that he has the ability to go further.

I urged my pizzaman not to let his brain to be the restriction on his talents. The mental process should be the methodology which creates an outlet for our human skills and thus towards new achievements.

Why do Israelis get so hung up about their Independence Day?

26 April 2012
1 Comment
Categories: Israel, Jerusalem

Israelis are often seen as emotional humans. Like the indigenous fruit to the country, sabra, they may be soft and sweet inside, but outwardly they can be very prickly.

Just look at events in Israel during the Spring. Today, Thursday, the nation is celebrating 64 years of its independence. Only yesterday, it was Memorial Day to commercorate those that had fallen in the wars since 1948. And last week the country honoured Holocaust Day in the name of the six million who perished during World War Two.

There are many ways to connect all the events. For example, as one local rabbi observed, the numbers killed in the wars is now close to 24,000, which is approximately how many were gassed each day in Auschwitz. With all those mixed and raw emotions running lose and in such a tight period of time, who would not become a tough overwrought?

Even so, the problem remains how to explain the importance of Independence to non-Israelis. Naturally, you can recall stories of wars and of persecutions from the past. You can point out the existential threats, like Iran, of the present. However, these are negative in context.

You can refer to the spin of Israel being the only country in the Middle East, where the Christian community is growing in size. Where else can a woman become a Prime Minister or head of the Supreme Court? And how many other countries that have gained independence since 1948 have then remained so pluralistic and democratic, and that is despite the on-going geopolitical issues?

But again, while these make for great explanations, there is something more basic in the works. It is the rare, fundamental and engaging beauty of the country, a transformation that is unique to Israel and makes the country a pleasure to live in. 

How to describe it? Let’s start with 21C, a great website, which shows Israel “beyond the conflicts”. Be it hightech or swimwear or special integration techniques, Israel seems to offer it. But still, I am looking for something more.

I somewhat found the answer in a small but growing blog called “the Real Jerusalem Streets“. In many ways, the blog is describing ordinary life in yet another city in the world. However, it is not just the site’s great photography that brings matters home to you through your screen. The reader is offered an opportunity to reach out at the buzz going in the country, the very hype which makes this such a wonderfully varied and dynamic place for all to live in.

It’s the noise, the creativity, the dynamism, the building of the proverbial next step. That is why Israelis love their Independence Day and also want the rest of the world to have a little share in their moment of joy.

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