Putting Israel on the Silicon Valley Map

Some 50,000 Israelis live in the high-tech center; four are working to organize them into a community and help their peers back at home.

The second floor of the Red Rock Café in Mountain View, California, is one of the preferred meeting places for Silicon Valley startups. Around rickety tables covered with laptops, it seems everyone is on to the Next Big Thing, or at least they want to believe they are.

It's a motley crew, to say the least. Around the tables are crowded Indians and Chinese, Americans and Europeans, whites and blacks, women and men. The one startup with any degree of homogeneity is one that isn't expecting to generate any profits: It's run by four Israeli techies who, on top of their day jobs, have for a few years now been putting a lot of energy into an organization they hope will serve as a kind of community center for Israelis in Sicon Valley.

Moshik Raccah, Oded Hermoni, Gil Henzel and Onne Ganel are the driving forces behind the Israeli Entrepreneurs Founders Forum. Raccah, 47, is a serial entrepreneur now at his third startup, which develops investor relations management software. He's lived in Silicon Valley for 12 years. He founded the IEFF five years ago with Israeli investor Eran Wagner, who has since returned to Israel.

Hermoni, 39, operations manager of Rhodium Investments and former CEO of the Israel High-Tech Association, took Wagner’s place. Raccah and Hermoni were subsequently joined by Henzel, 40, the CEO of Tangent Logic, an Information Technology architecture and Web development company, and by Ganel, 41, business development manager at Omnicell, a medical technology company.

Until recently the organization, which has 600 members, focused on arranging meetings and lectures for Israelis in Silicon Valley. Now, after six months of work, the four are launching an interactive map, developed by Henzel's company, of all the Israeli companies in the valley (http://www.ieff.us). There are around 100 defined as Israeli, with at least one Israeli entrepreneur.

The map’s purpose is to leverage the power of the Israeli high-tech community in Silicon Valley.

The group’s founders say it’s important for the Israeli community in the valley to organize, especially in light of the intensive organizational activities of Indian and Chinese expatriates. If the relevant groups in Israel wouldn't act, they felt they had no choice but to do it themselves.

"When I turned to one of the Israeli government offices for help with the map, their answer was it would simply aid yerida [emigration from Israel]," recalls Hermoni. "In Israel they don't understand the need to support what we're doing here. It's important that as many Israelis as possible get into key positions," Hermoni says.

Continuing, he says, "When you go to a directors’ meeting at the big companies, you find that everyone is Indian. When a manager is Indian he influences the decision on where the company will set up its next research and development center," says Heroni. In addition, many of the investors he meets want to get to know Israeli high-tech but they have no way systematic or organized way to do it. "For a lot of Israeli companies it would be a lot easier to go through Silicon Valley to activities in countries like India and China. You can create a common language between Indians or Chinese through Israelis living in America."

Raccah says there are advantage to informal organizations like IEFF. "There are a lot of things that companies and entrepreneurs can’t do alone," he explains. The group gets about five calls a week on average from Israelis needing help.

He estimates there are around 50,000 Israelis living in Silicon Valley, not all of them in high-tech. Henzel, who has lived in California for seven years, says one of the things that characterizes the community is its desire to help their peers back in Israel.

"As a business owner, I'm happy that 80% of my employees are Israelis and I would be happier if I could support another 10 people in Israel. Israel is very important to all the entrepreneurs here."

A breakdown of the Israeli companies operating in the valley reflects the broad breakdown of global high tech – 40% are in the Internet and 16% in mobile communications. They are about evenly divided between business-to-business and business-to-consumer focuses. About 14% are in life sciences. Others deal in software, nanotechnology, clean tech and network security.

"We believe that there are really about 200 Israeli companies operating in the valley," says Hermoni. "These companies employ around 1,500 people. A lot of them are startups that for the moment include just two or three founders."

Only about 11% have revenues in excess of $10 million, according to the IEFF survey. More than a third have no sales at all. Not surprising, since about half of them were started less than three years ago.

Hermoni says it critical for Israeli companies to have a presence in Silicon Valley. "I don't know how many times an investor has told me that a certain company doesn't interest them because it has no representation here," he says. "There are limits to how much capital is available in Israel. The money here is unlimited, so being here is important. Even more important is unmediated access to the companies here like Google, Facebook and LinkedIn."

Omer Shubert
Haaretz