Israeli Who Helped Catapult Twitter to Fame and Glory Plans Next Move

Israeli-born Ori Allon has sold companies to Twitter and Google, and now he's established what he hopes will be his third major firm.

The hottest story in the tech world recently belonged to the microblogging network Twitter, which on November 7 had its initial public offering at the New York Stock Exchange valued at $14 billion. By the end of the first week of trading, the company’s worth had already jumped to $23 billion.

Twitter also has an Israeli connection. One of the partners in its success, the man who developed some of its most useful tools, is an Israeli, Ori Allon, 33, who until about a year ago was director of engineering at the company’s New York office.

Allon joined Twitter after he sold it his startup company, Julpan, in 2011, for $40 million ‏(at the time, Twitter’s biggest acquisition to date‏). Allon, who has a doctorate in computer science, opted to leave Twitter after a year and embark on a new independent path, although it is thought he held onto his Twitter options, which became tradable following the IPO.

In an interview with Haaretz by telephone, Allon prefers not to address the sale of his startup to Twitter. “I don’t talk about my money. I am proud of Twitter and the guys. They built an impressive product with serious growth, and the markets believe in them. There were bigger companies that wanted to buy us [Julpan] and we turned them down. I’m happy we sold our company to Twitter. It was a good choice for us and for them,” he says. “Twitter was an amazing place to work and I have a lot of friends there.

“The only reason I left is that I like starting new companies, the challenge of starting something from scratch and developing it into something successful. That is my DNA. In any case, I like talking about what is being built − about technologies and about basketball. I don’t like the subject to be me.”

It is no coincidence that Allon mentions basketball in the same sentence as technology. It’s safe to assume that he was as preoccupied by Hapoel Jerusalem’s November 13 Euroleague basketball game against Turkish team Pinar Karsiyaka as the outcome of the Twitter IPO. Even though he lives in New York, Allon is emotionally connected to the team he rooted for as a kid, and since July, he has served as chairman of the team’s ownership group.

Some six months ago, Allon launched his new company, Urban Compass, which has developed a technology platform that connects apartment hunters with neighborhood real estate experts. In December 2012, the company raised $8 million in a seed round before it had even presented a product of any kind − the biggest seed round in the United States last year. Two months ago, the company reported it had completed its first round of financing with a total of $20 million from the leading investors in Silicon Valley − among them, Salesforce CEO Mark Benioff, PayPal founder Peter Thiel’s Founders Fund and Napster cofounder Sean Parker.

Within 10 months, Urban Compass was worth $150 million. Last May, the outgoing mayor of New York, Michael Bloomberg, attended the company’s launch. Allon, who at 26 sold Google a mathematical process he had been working on for his doctoral thesis, played a major role in the company’s ability to create a buzz at such an early stage in its life.

“I wouldn’t have left a place like Twitter if I didn’t believe I was founding a very big company,” says Allon. “ I don’t know a single person who thinks that it wasn’t the right move to make.”

Allon’s story begins in Jerusalem. He completed his military service in a combat unit, and instead of following that with the customary big trip abroad, he combined school and travel in Australia. He earned undergraduate and master’s degrees in computer science from Monash University, in Melbourne, and went on to do his Ph.D. at the University of New South Wales, in Kensington, a suburb of Sydney.

In the course of his doctoral studies, in 2005 Allon developed an algorithm designed to improve understanding of the context for queries in Google’s search engine and improved the search − mainly general queries that did not focus on a particular site. People from Google who were visiting New South Wales found out about Allon’s development and were excited about it. In 2006, Google bought

the patent − the search engine Orion − for an undisclosed amount. While still working on his doctoral thesis, Allon was also employed at the company’s headquarters in Mountain View, California.

Then, too, Allon preferred to leave the warmth of his American employer and set up a new venture. The next stage was forming Julpan in 2010, which developed a search engine for social networks that was based on the social behavior of the surfer. When Twitter bought the company, it used Julpan’s known-how to incorporate into its interface the ability to discover content in hot topics and searching for trends in real time.

Few know, by the way, that Microsoft invested some $4.5 million in Julpan, and that, because of that, Microsoft has holdings in Twitter today.

New challenge

Now, at Urban Compass, Allon is experiencing a different kind of work. “The technology at Urban Compass is different from other technologies I’ve done,” he says. “That is the challenge. I didn’t want to build another algorithm for a company or social media. Those are things I did already.

“At the previous companies, I built a wholly technological solution, for which there were always major companies that wanted it. So the business model was very simple. Here, we can build a real company − with a user base, excellent growth. Completely different from what I did before. I don’t like to remain in my comfort zone,” Allon says.

Unlike Orion and Julpan, which were acquired by companies that were a natural fit, Urban Compass was not designed to fit a particular buyer. “Right from the start, I said this company is being built and thought of as something that stands on its own right, not something for sale,” Allon says.

Urban Compass’ software tries to streamline the process of looking for an apartment ‏(at this stage, it contains only rental listings, but later on it will list properties for sale‏) and make it automatic − beginning with scheduling a viewing and ending with the payments. The site’s experts, who help people throughout the process, are selected by the company and employed by it.

“This is a completely new system, which lets you search all the apartments for rent in New York. We want the entire solution from one end to the other to be online. That’s how it should work. I don’t want to go to a bank, bring checks. It should be entirely seamless,” Allon says.

Currently the service is available only in New York City, but in the future it will be expanded to other cities in the United States and outside it. The company already has nearly 100 people on its payroll. “With the help of technology, we have succeeded in making the process easier,” Allon says. “There are fewer people involved in each deal, so we have managed to cut the prices of the professionals by 50 percent.”

Allon emphasizes that in the future, it will be possible to use the platform for additional applications that will know how to utilize networks of experts spread all over the city − for example, sales entities. In addition to information about specific apartments, the site offers information on neighborhoods in the city and the differences between them, as well as up-to-date comparisons of average rental fees in each area.

Allon first met Mayor Bloomberg after the sale of Julpan, when he visited New York to open the office there, and that was how ties were forged with him and his staff. “They followed what we were doing at Urban Compass and were psyched that we started here [in New York], rather than San Francisco, which was the natural choice,” Allon says.

When asked where he gets the drive to continue setting up companies, Allon says he can’t imagine doing anything else. As far as he’s concerned, advancing within Google or Twitter − or, alternatively, switching to investments and consultancy for startups − are not options. “That isn’t the essence for me. The essence is creating. I did enough sitting on the beach after the first and second exits. I was in Brazil, I traveled with friends. I discovered that I don’t want to hang out for years.

“It’s fun to bask in the success for a few weeks, but the fun thing in life is to create something that also does other people good and also gives me satisfaction. It is important to me that these two components be present. I need a combination of things that makes life easier and more joyful for people, on the one hand, and on the other, to transform something that was zero and has no value into something with a high value. That’s the fun − a lot more than another shot of tequila in Brazil or Argentina. I enjoy that too, but also basketball and long board meetings,” Allon says.

In addition to his entrepreneurial activities, Allon is also an investor. To date he has invested in some 10 startups, mostly in New York but also one in Israel. He cannot cite the exact number of investments because they are managed by the investment company he founded, Allon Ventures. “I am not actively engaged in investments all week, but try to invest in two or three companies a year. Ordinarily, my investments are seed investments of $100,000-$200,000. I’m not a venture capital fund; I invest my own personal money in people I believe in. I invest, and trust in the people I invest in, but am not involved in the day-to-day running of the companies. So far, all the investments are going in the right direction.”

Allon’s most famous investment in Israel, and the one that stirs his greatest enthusiasm, is not a traditional high-tech investment. In July, as head of a group of investors, Allon completed the acquisition of the basketball team he has supported since childhood. “I grew up in Jerusalem and I love the city very much. I was a fan of this team from an early age,” he recounts. “There was an opportunity here to take the brand to the next stage, with the new arena auditorium [under construction, which] will have 11,600 seats. This is an investment for the purpose of giving − a way to give back to the place where I grew up,” he says.

Allon recently spent a month in Israel, during which he spent a lot of time dealing with club business. Hapoel’s day-to-day management is handled by CEO Guy Harel and the team’s coach. But as head of the ownership group and chairman of the board of directors, Allon focuses on building a management mechanism. The goal is to reach the Euroleague and become a top-ranked club in Europe within three years. “I think we are building something beautiful and the team is doing pretty well,” Allon says.

For the time being at least, the team has succeeded in enticing standout players from the local market, among them Yotam Halperin. Earlier this month it was reported that the team is also signing former Maccabi Tel Aviv star Lior Eliyahu. “Never in the history of Israeli basketball has a team taken away from Maccabi its best player in the prime of his career,” Allon says.

Besides Allon, the team’s owners include advertising executive Eyal Chomsky, American sports agent Arn Tellem and the NBA star Amar’e Stoudemire. Allon’s group of investors secured ownership of the club when it won the tender issued by the Justice Ministry’s administrator general, who was appointed to manage the property of previous owner Guma Aguiar ‏(who disappeared in June 2012 while boating off the coast of Florida‏). It has committed to invest NIS 15 million in the team over the next three seasons, in return for a 60 percent stake in Hapoel.

Despite the immense passion he possesses for the basketball team he owns, Allon says he is busy building a major company and does not plan on returning to live in Israel in the next few years. 

Courtesy photo
Seffi Magriso