Where hi-tech startups meet the economy

It’s not just about the technology, it’s also about the business plan.

By DAVID SHAMAH
Face.com 311 (photo credit: Face.com )
Face.com 311
(photo credit: Face.com )
Startups here are a dime a dozen – or, as they say in Israeli supermarkets, two for one. Anyone with a couple of bucks (or access to some money) and a halfway decent idea can hang out his or her shingle and start developing the “next big Web thing.”
And there’s no doubt that many great ideas and products come out of the startup stew many Israelis are known to whip up. The question is, how many of them are economically viable in the market; i.e., how many are capable of actually making money?
That is the question Israel’s Techonomy gathering seeks to answer, says Orli Yakuel of Go2web20.net, a premier showcase for new Web and tech companies. Together with co-organizer Eddie Resnick of Clouds R’ Us, she held the first Techonomy last year, in the depths of the financial crisis. Yakuel says the timing was certainly right: “If it wasn’t clear to startups before, the point was driven home last year: It’s not just about the technology, it’s also about the business plan.”
Thus was born Techonomy, where six hand-picked, leading-edge companies told a panel of local and international judges and spectators about their technology and how they saw themselves fitting into the economy.
Sounds scary, but it really isn’t, says Yakuel, who for several years has been helping Israeli startups learn how to promote themselves, especially to angels and VCs who can help them survive and thrive.
“Our panel evaluates the technology and the business plan for each of the companies, analyzing their approach from all possible points of view,” she says. The result? A better, stronger startup, ready to meet the challenges of large-scale Web audiences, able to come up with creative ways to raise money and eventually turn a profit.
If in the past startups were about the technology, figuring that the money side of things would “just work out,” today they know better, as angels and VCs have become far more selective in the way they spread their still-considerable financial largesse and as increased competition means that formerly wide-open niches are quickly closing.
By presenting at Techonomy and discussing the strengths and weaknesses of their technology and business plan, companies can better learn how to make their case to investors and come up with ideas about how to make money.
That’s the theory, anyway. And based on the results of the first year, the Techonomy Way does have something to recommend it. At least two of the 2009 participants – Face.com, which built an innovative and immensely popular face-recognition application for Facebook, and Sense of Fashion, a social-networking platform for fashionistas – are considered major successes, in terms of number of users and potential profits.
“The other companies have performed well also,” Yakuel says, adding that in this economy, even just surviving is a sign of solid performance, “but we’re especially proud of Face.com and Sense of Fashion.”

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While there are many great ideas out there, what distinguishes these two are their business plans – hence their inclusion in Techonomy.
Last year’s crop of companies were weighted to Web 2.0 applications and services, says Yakuel, while this year’s will be a little more diverse, with companies presenting products and services such as an iPhone/cellphone app, a cloud application and social-networking technology.
While there are many tech startup showcases in Israel, Yakuel says Techonomy seeks to surprise – pleasantly, of course: “We seek out companies that have something new and different, with technologies, services and products the public might not be familiar with.”
That’s in contrast to many of the other showcases, where there is less emphasis on innovative ideas.
While only six companies (a seventh is being considered for this year, says Yakuel) win the Techonomy “lottery,” the event is attended by many others operating or thinking of getting into the tech startup business. One reason for that is the invaluable advice anyone can get just soaking in the proceedings.
Like last year, Techonomy 2010 will feature an all-star list of tech and startup experts, including tech bloggers Robert Scoble and Eyal Shachar (Yakuel’s partner at Go2web20.net), startup experts Jeff Pulver and Adam Fisher, entrepreneurs Yaron Samid and Yael Elish, and various and sundry organizations, publications and corporations, all willing to share their wisdom. Attendees should be able to pick up some good ideas just by being in the same room with these folks!
“We put a lot of work into Techonomy, to ensure that it accomplishes the goals we’ve laid out for it,” says Yakuel, adding that she attributes much of the success of last year’s program, and hopefully this year’s, to the input provided by bloggers and industry folk she’s in touch with.
So, what new and great ideas can we expect from Techonomy this year? Yakuel won’t say; the participants are not announced until the conference itself (rehearsals are held in a super-secret location). But don’t worry, we can trust her and the people behind Techonomy, because there’s a lot more than just some business ideas at stake.
“I see Techonomy not just about new ideas but as a way to promoteIsrael,” Yakuel says. “People hear about Israel as a startup nation,and the news from Techonomy gets onto a lot of blogs and media outletsthat don’t usually carry news about Israeli startups. It’s definitely achange from some of the ‘regular’ news people abroad get about Israel.Techonomy is a great way to do hasbara for Israel.”
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Techonomy will take place on May 4 atYES Planet in the Ayalon Mall, Ramat Gan. Check outtechonomy2010.eventbrite.com for details.