HARTFORD – The space is full of desks and lime-green office chairs, but perhaps the most telling feature of this new office outside Tel Aviv is the collection of colorful beanbag chairs where an innovator can design the next million-dollar business.
Welcome to Venturegeeks, Israel’s first privately funded startup accelerator, where the best and brightest new ideas are coaxed into real products and services. Startup accelerators help fledgling companies in the early stages of product or service development by giving them access to legal and accounting services, and introducing them to mentors, sources of capital, and strategic partners.
Hartford-based attorney Daniel Gottfried is the Connecticut link to this center of innovation. Two years ago, he was approached by friend and client S. David Moche, who proposed the idea of creating a startup accelerator with Geekmedia, owner of Newsgeek.co.il, the largest technology portal in Israel. Moche, a finance professional who lives in Cornwall, Conn. and New York, teamed up with Geekmedia principals Moran Bar and Yaniv Feldman in Israel. Gottfried, a tax partner at Rogin Nassau LLC in Hartford, joined the initiative as U.S. counsel to the operation. He is also a member of a Geekmedia board of advisors and a U.S.-based mentor to some of the portfolio companies.
“Over the past two years we have been introduced to plenty of good, bad, and great ideas almost every day,” Bar writes on the Venturegeeks blog. “We know that there are many more ideas in the Israeli tech community that only need that small push of funding and some guidance in order to make great things happen. We all know that Israel is being called the ‘Startup Nation’ for good reason. After exploring most of the startup accelerators in the U.S. and Europe we thought that there is no reason why we shouldn’t nurture our own startups here in Israel instead of losing great people and ideas to other countries. We also know that there is a large gap between having an idea and starting up a company and to really make it work.”
Last July, the first pool of 50 applicants was whittled down to five, including Sleeve, an educational “ecosystem” whose founder is visiting the U.S. this month. The process culminated with a demonstration day at the IBM facilities in Petach Tikvah, where representatives from each startup presented their ideas to a roomful of investors, most of them Israeli. The next application cycle will begin in February.
Gottfried has worked at a number of law firms over the last seven years. His professional practice involves assisting businesses and investors, often with cross-border transactions. He has assisted U.S. companies in merger and acquisition transactions with Israeli companies, U.S. investors making investments in Israeli companies, Israeli companies doing business in the U.S.
Gottfried became involved with MetroHartford Alliance last year when the organization hosted, together with the Jewish Community Relations Council of Greater Hartford, the first-ever Connecticut-Israel Technology Summit. He is now a member of the alliance’s International Business Council, working to attract more Israeli businesses and companies to the area.
Gottfried has helped Sleeve as a U.S. mentor, serving as a sounding board and offering help and advice where needed. Venturegeeks’ raft of mentors includes high-profile businesspeople, including Jeff Radov, a founder of About.com, and Israeli venture capitalists, investors, and entrepreneurs.
After presenting the program on university campuses in Israel, Sleeve’s founder, Ido Volff, is now visiting several college campuses in Connecticut and around the U.S., hoping to set up pilot programs here. “The feedback we’ve been getting from professors here is similar to what we’re hearing in Israel,” Volff says. “Professors and students see a lot of possibilities with the system.”
“As an entrepreneur in Israel, sometimes you feel that every other person has one or two startups going on and sometimes the reactions from venture capitalists or angel investors is, ‘There’s always someone else’s project to look at,’” Volff says. “But here, I’ve found that it’s an advantage to be Israeli. There’s so much support and pro-Israel sentiment; we’ve received such a warm reception.”
The first privately funded startup accelerator in Israel – there are several government-sponsored incubators – Venturegeeks is based on the well-proven model used in the U.S., Gottfried says, by private startup accelerators such as TechStars and Y Combinator.
“There’s a huge amount of talent in Israel,” he says. “Most of the products being developed are directed to an external market and the U.S. is a good market. I like being involved in startups – it’s a nice way to insert myself into Israel more.”
Each startup finalist accepted into Venturegeeks receives $20,000 and three months of mentorship and office space, in return for a 10 percent stake in the start up’s equity. Venturegeeks works with U.S. affiliate, GK Ventures.
A business accelerator differs from an incubator in that the latter focuses on a new technology that will have a long research-and-development cycle, Gottfried explains; an accelerator moves projects along very quickly, often resulting in a beta version, or functional prototype, within three months.
Venturegeeks occupies the second floor of the same building where Geekmedia resides. The space includes several work tables, each accommodating two to five people, as well as a presentation area and a collection of beanbag chairs. “The entrepreneurs meet a lot of people and learn a lot,” Gottfried says. “There’s constant social pressure to work. It’s a collaborative learning experience.”
“Venturegeeks is incredible and I really recommend to startups to apply,” says Sleeve’s founder Ido Volff. “It helped me so much as an innovator, especially in the first stages, which is critical.” Volff, a 32-year old Haifa-area native, studied mechanical engineering at Afeka College of Engineering in Tel Aviv and now lives in that city. “Before iPad, after the first iPhone came out, I was thinking, ‘Wouldn’t it be great if there were a big iPhone, like a digital notebook,” he says. Volff graduated, got married, and when the iPad platform was released, he was able to begin exploring his idea.
Venturegeeks allowed Volff to flesh out his initial concept into a workable model and hire four team-members. The resulting product, Sleeve, allows students to learn collaboratively. “There are many gaps in how we behave in our academic life and in our non-academic life,” Volff explains. “We’re interacting with the same people in and out of the classroom, and yet you don’t see people checking Facebook for notes from their Econ 101 class. You’re taught to study by yourself and then when you go to work, you’re encouraged to collaborate. Sleeve takes the sharing capabilities from social media and puts them into an educational application. It’s education for the Y Generation.”
Volff got the idea for the name of his company from the book, “Technomystica: Consciousness in the Age of Technology” by Israeli author Ido Hartogsohn, who describes today’s mobile devices as extensions of the human body. Volff saw his application as an extension of a human arm, or the sleeve sheathing it.
The program is free for students and universities. The Marketplace or Trade Café feature is designed to get more content into the Sleeve system. Students can upload their class notes (filtered and ranked by the Sleeve community) and “sell” them to other students worldwide. Professors can use the system to spread content to their own university and beyond.
With Sleeve, students can elect to have their class notes appear on friends’ notebooks, and everything the professor writes can also instantaneously be shared. “That way, students can focus on listening instead of writing all the time,” Volff says. Sleeve’s gamification feature encourages a higher level of student engagement, by offering the incentive of a points system that can be used in the Sleeve Marketplace.
“Sleeve is an open system and we want to share a lot of content,” Volff says. “That’s opposed to how things are. Our model is based on the fact that the information is out there, so let’s share it with everyone.” Among the feedback Volff has been hearing is a concern about intellectual property and copyrights, which Sleeve will address with an opt-in alternative for information-sharing. “If LinkedIn is the professional version of Facebook, Sleeve is the educational version,” Volff says. “We want people to get the most of their educational experience.”
“One of the things people like is the marketplace, where students will have to learn to be entrepreneurial,” Gottfried says. “Because the economy is changing, students must be challenged to explore what the market wants. Professors tell us that this offers a nice way to teach entrepreneurship because, in once they join the workforce, everyone will have to be entrepreneurs.”
Sleeve will launch its first pilot program at Tel Aviv University’s Recanati Graduate School of Business Administration, and is in discussions with the Interdisciplinary Center (IDC) in Herzliya.
Also accompanying Volff on his U.S. trip is Israeli documentary filmmaker Daniel Sivan.
“Two years ago, a producer I work with said that we should do something about the high-tech industry in Israel because it’s a huge industry,” Sivan says. If you read “Startup Nation” or look at statistics, he says, there are more startups in Israel than in all of Europe, and more venture capitalists than in many countries, including Germany.
“I said, ‘No chance – it’s so boring, and you’re just going to see people sitting at desks in fluorescent-lit offices writing code, and you can’t film people writing code because it’s really not interesting.’” The producer urged Sivan to do a little research and the results were surprising, he says.
“I stumbled across early-stage startups; because they’re not yet high-tech companies, they don’t live in those offices,” he says. “These are people who are not so much involved in running a company but in fulfilling their dream. When I went into it, I thought it would be a world that consists of people who only care about money, who invest in an idea because there will be a lot of profit. But instead, I was shocked. They reminded me of myself.”
Like filmmakers in many countries, most in Israel can only pursue their art by maintaining a day job, Sivan says. “If you survive in the industry without becoming a teacher, you are considered a successful filmmaker,” he says. “If you speak to any Israeli filmmaker or indie filmmaker in the U.S., they’ll say, ‘I don’t care about money, I don’t want to wait tables, but let me keep doing what I’m doing; my dream is for someone somewhere to see this film and say, ‘You’ve got a point’ or be moved. I saw this world of people in high-tech who said, ‘I don’t care what I have to do; my dream is for someone in the world to open this app on an iPhone or iPad and say, ‘You’ve got a great product.’”
While filming Volff and his team, Sivan recalls observing the young entrepreneur telling his wife,” I’m like an artist. I have to create. And maybe one day this thing I’m working on will be displayed in the Apple store.”
“Ido’s product is social and educational and he has this passion,” Sivan says. “Almost all these innovators could earn much more at 9-to-5 jobs at Microsoft or Google. To be an innovator is a bad bet, but most of them feel that they can’t contribute all they want to when they work for a company, but when they’re doing their own thing, they can work 20 hours a day.”
The resulting documentary (working title: “Israeli Startups”) is slated to be produced as a five-episode series on YES satellite TV in Israel and as a full-length feature film in the U.S. “It gives another angle to the high-tech industry in Israel,” Sivan says. “It’s not about the economics or the technology, but rather about the passion and people behind the products.”
Introducing… the startups
The first class of Venturegeeks startups includes five new initiatives, showcased at the July Investor Day at IBM in Tel Aviv. Here’s a brief look at who they are…and website addresses to help you learn more.
LassoIt – Turning the Web into a personalized language-learning experience.
LassoIt seamlessly integrates a language-learning process into your natural web surfing experience. LassoIt finds texts online that match your current language level and interests, and helps you learn as you read. It then optimizes learning through repetition and practice. As your vocabulary grows, so does the level of texts LassoIt brings you.
6Scan – The world’s first automated protection suite against website hackers
6Scan’s technology uses proactive protection to close security holes before hackers find them. 6Scan’s threat scanner harnesses the power of cloud computing to continually monitor websites for known and unknown security issues, immediately neutralizing them. The product is easy-to-use and designed for website owners with no technical or security knowledge.
VerData – Social Location-Based Commerce
VerData has developed a free mobile platform for businesses, along with a simple web site, that enables them to publish special deals in their location-based mobile app called “Shop Rooster”.
Most deals are specially tailored for the app, and are redeemed by showing the deal screen on the phone. The deals are very attractive but not as extreme as in daily deal sites. This allows the business to attract foot traffic into its store and increase sales, while also keeping its profit margin reasonable.
The application is free to download from the app store and once opened, the app uses the smartphone’s location info (GPS and cellular) to know where the user is and show him/her a list of businesses that offer special deals around his/her location.
Sleeve – Students Go Social
Sleeve offers a full social ecosystem for students, teachers and education vendors. Students can get a live feed from their classmate’s notebooks or from the teacher’s smart blackboard, see exactly what others are writing during class and add their personal notes. Packed with cool features, Sleeve lets students get the most out of their learning experience.
Nogeno – Your Music Looks Good
Nogeno is the ultimate online platform for musicians to create a unique music business card by displaying, promoting, selling and sharing their music online with established audiences and newly discovered fans. A unique algorithm identifies other users’ musical profiles and offers them new music that suits their personal taste. Video: goo.gl/eBEX8.