Another VC Fund?!

I’ve been spending a lot of time thinking about what differentiates us as an investor. This was triggered from two different directions. The first is the explosion of new venture funds. It seems everyone I talk to is raising a fund these days. The tech media headlines indicate lots of capital looking to be deployed, at all stages. Differentiating your product is necessary to stand out in a crowded market.

The second, and more important consideration is rather from the other side of the table – why would a founding team choose us as an investor in their company? To be clear, it is a founder’s market today. These large amounts of capital looking to be put to work has led to a rise in valuations and we are seeing deals closing faster than ever (at least for the 15 years I’ve been exposed to venture, I was focused elsewhere in the late ’90s – early ’00s).

[As an aside, the above concerns me because it seems that one of two things are behind it. Either investors are making bets (no other word for it) without doing the necessary diligence. Or, investors are backing “cookie-cutter” founders without considering the hidden-potential of diversifying across first-time founders, female founders or minority founders. Others have written at length about these meaningful topics so I will refrain from digging in here, though that should not diminish from the importance of the conversation.]

Coming back to thoughts on differentiating SapirVP as an investor, we always refer to our tagline of: “Mentorship Driven Investing”. Is this really differentiated? – Today it seems that every micro-VC team claims to be “founder friendly” and “value-add” investors. Are statements like these based on the assumption that every other fund is not adding value? Only emerging managers can add value?

Maybe. We have all met investors who were less engaged and less helpful. These are probably not good early-stage start-up investors, or not a good fit for the company. Some advance diligence regarding the investor may have helped the company avoid that experience. Maybe not. Either way, these investors are not the majority and the market forces should be working against bad players so that they don’t stick around for long (though performance cycles in venture are long, so this is all relative). Most investors, even those who have already had great success and have $B AUM, are in this business to add value. As it should be, because: Venture Capital is a service business.

We only have two types of customers: Founders and LPs.

For LPs the service is primarily financial – take their capital, invest it, report on your progress and do your best to return exciting multiples within a reasonable timeframe. Some LPs are looking to create impact, increase diversity or identify potential strategic value. However, for most LPs the transaction is a financial investment at its core. The service elements here seem clear. Good GPs will be transparent and can stand out by offering unique opportunities of value creation for the LP. While popular in all VC pitch decks, I am not sure that a “unique” investment thesis is enough of a differentiation in today’s market. It is probably more important to show “product-market fit” between the fund (team, size, geography, focus) and the strategy.

Founders should also be sure that they are getting a service. The service level should fit the needs of the company. Industry expertise as well as stage expertise. A biotech spin-out from MIT establishing a scientific innovation as a commercial offering needs a different type of “added-value” than a Series A consumer product company looking for hyper-growth. Some founding teams are seeking the “roll up our sleeves” hands-on involvement to navigate the early-stage foundation-forming period, while others are content with taking capital from an investor and then only engaging with them once a year for the annual update (I advise all founders against this, for various additional reasons detailed in a separate post).

Founders should choose carefully which investors they choose to engage. Not all capital is equal.

The most common term thrown around by VCs is that they are “founder friendly”. Like many informal terms, this seems to mean different things to different people. I’ve found that the gap between speaker and audience can be pretty big when it comes to understanding what this term means.

For us this means that we recognize that the founders are the company. The investor is just along for the ride. Our mission is to find the best way to add value during the different stages of the journey. This can vary from team to team and from company to company. This is what we mean by “Mentorship Driven Investing”. It is a tailored experience, based on the core foundations of our mentorship-model, establishing this relationship even before we invest.

I just threw out another vague term…. Let’s unpack this further.

I’ve come to define Mentorship as the combination of Experience and Empathy. Experience is valuable, but it needs to be shared in a way that it can be received and make a difference. Sitting around telling stories of your glory days will provide few practical tools/lessons for a founder. Using a story to illustrate a situation or share a new perspective will create new neural connections and inspire innovative thinking.

Mentorship is showing, not telling. The mentor serves as a personal example and as a guide. But you can’t just do it for someone else, as they will never learn to do it themselves. And you don’t need to have all the answers. Just ask thoughtful and thought-provoking questions.

The mentor should always be there to help pick up the pieces and help make course corrections. Mistakes will be made and **** happens. It is not about you (or your ego), it is about the founders building an amazing company.

Mentorship is not about being a friend. Friendships may (and should) develop. But the mentor need not try to be a friend, especially if it will make it impossible to have the necessary open conversations about what is best for the company. A mentor is also not a teacher, at least not in the sense of making rules, handing out tasks or giving exams. Inspiring creative thinking and continued learning are great.

I think that we embrace the service mentality in a unique way, but we don’t say “founder friendly”. How then should we convey this to the world?

Earlier this week, my friend Shimon – a successful serial founder/CEO – told me that he thinks that we are “Founder Respectful”. He said some very nice things about our approach vs some of the investors he has dealt with. My takeaway from that conversation is that the empathy element we incorporate into these relationships – as mentors, not friends or investors – is where we truly stand out. It makes all the difference to the founder. This in turn gives the company a better chance of success. Said success should result in those multiples of returns we look to provide to our other customers, the LPs.

Creating alignment across the LP-GP-Founder ecosystem. Multitiered value-add. Practicing what everyone preaches: “It is all about the people.

Study: Covid19 Impact on the Israeli Early-Stage Ecosystem

The world has changed. While we yearn to return to “normal”, the impact of COVID-19 on our lives will create long-lasting change. As far as technology adoption, it will hopefully be for the better. Digital health, vaccine discovery and manufacturing, work-from-home, digital educational tools and e-commerce have all made significant leaps towards mainstream adoption in 2020.

The stock market continues to rise and the headlines in the tech industry are filled with IPOs, SPACs and massive investment rounds. Away from the headlines, we felt that the start-up ecosystem seemed ok, maybe even good, but not crazy good or depressingly bad, like the media has made it sound. We decided to take a closer look at the data which might otherwise be obscured by these dazzling headlines.

We started by collecting data from PitchBook and CrunchBase on over 600 companies that had announced fundraising events in 2020. We analyzed the data and scraped it to 150 companies which fit the criteria matching the stage, industries and geographies where we are active investors. This enabled a comparison to what we were seeing out in the field. To compliment this, we conducted a survey to take a deeper dive with a representative subset of over 30 companies which matched these criteria.

At the highest level, PitchBook reported that in 2020, “investors deployed $156.2B into start-ups, liquidated $290.1B of value via exits, and closed on $73.6B [of new capital] in traditional VC funds.“[1] Clearly a frothy market. But where are all those investment dollars being deployed?

Pitchbook continues: “…the investment cycle, seed-stage and first-time financing activity fell sharply, proving a more challenging fundraising environment for newer entrepreneurs.”1 CrunchBase supported this conclusion reporting that, globally, seed funding in the 4th quarter of 2020 was down 27% year over year, and early stage funding was down 11% year over year”[2] – despite the sense that the market was coming back with the end of the pandemic in sight due to the vaccinations.

Our survey data showed differently. From the responses we collected, the majority of the companies in our survey who successfully raised capital in 2020[3] were early-stage start-ups (pre-seed, seed, seed+). Our survey further showed that 61% of the companies had planned to raise capital in 2020, of which 68% succeeded in doing so. Of those who raised capital successfully during 2020, about 53% raised up to 3 million USD, another 20% raised up to 10 million USD, with the remaining raising either above 10 million USD or preferred not to say.

Furthermore, there does not seem to be a high correlation between companies who were able to raise capital in 2020 and the existence of a prior relationship with the investors, or whether an in-person meeting with the investors occurred.

One possible explanation for this difference between the data sets is that seed rounds are not reported when they occur but rather at a later date, whereas the survey data was collected directly from start-up executives and founders, reporting anonymously.

 While pre-pandemic the Series A Crunch was a real concern for seed stage companies looking for their next round, from our analysis it seems that there was a clear reduction in early stage companies receiving seed, and even pre-seed, investments. The “crunch” seems to have expanded to the earlier stages, raising the bar for receiving funding. Investors were being even more risk averse with their venture capital. We also derived that later-stage companies (series B and beyond) were impacted in a very limited way by COVID-19, far less than was expected at the beginning of the pandemic[4], with late-stage and growth funding up year over year by 4% in 20204.

To address this new/expanded “crunch”, professional pre-seed and seed investors need to be able to move quickly, yet responsibly, to pursue promising opportunities.

The impact of the pandemic goes far beyond capital raising. Over 83% of the companies responding to our survey stated their business operations were affected by COVID-19. The areas that were affected most included sales, marketing, operations and R&D (in that order). Over 76% stated they adopted a work-from-home (WFH) policy with positive results. This corresponds with PitchBook’s findings[5] showing that more than 80% of US employers said enforcing WFH has been successful for their company, according to a late 2020 survey by PwC which included 133 executives and 1,200 office workers.

Many companies also had to reduce their employee headcount, prioritize new products or customize existing products while implementing cuts across administration costs, operations and even salary cutbacks. These responses support Ethosia’s year 2020 conclusion, presenting a 7% salary drop in the Israeli high-tech industry for the first time in the last decade[6]. On the bright side, PitchBook stated that almost 90% of private companies in the U.S. said they are hiring in the new year (2021)4.

A deeper analysis is required to understand who were the early-stage companies that secured funding and growth in 2020. The data lends itself to several hypotheses, including for example the power of top-tier (rockstar) teams and specific industries enjoying hyper-growth pursuant to the changes demanded on our lives due to the pandemic.

In conclusion we asked each founder how they felt about their company going into 2021. Despite COVID19 having a negative impact on most industries, it seems like the tech industry was harmed less: just over 80% of our respondents believe their company is positioned for hyper-growth in 2021, and most respondents declared their company’s valuation has increased over 2020, painting a picture of an optimistic future. We would expect nothing less from a start-up founder pursuing their dreams.

We hope that you – founders and investors – find this study useful as you look to navigate the early-stage Israeli start-up ecosystem in 2021. Please feel free to reach out with any questions or to share your own experiences and insights.

**This study was conducted with Dana Rosenfarb from MIT. Thank you Dana!


[1] “Venture Monitor, Q4 2020”, Pitchbook, NVCA

[2] “Global VC Report 2020: Funding and Exits Blow Past 2019 Despite Pandemic Headwinds”, Gené Teare, CrunchBase

[3] 77% of the respondents were early-stage startups: pre-seed, seed, seed+ and Series A.

[4] https://medium.com/sequoia-capital/coronavirus-the-black-swan-of-2020-7c72bdeb9753

[5] “Job market outlook for 2021: More hiring and more remote workers”, Priyamvada Mathur

[6]“2020 Year Summary”, Ethosia, https://www.ethosia.co.il/content/לראשונה-מזה-עשור-ירידה-של-7-בשכר-הממוצע-בהייטק-בשנת-2020-0

Raising Funds: Q1 2021

Strong performance in the markets has encouraged many companies to accelerate their fundraising plans. Investors, in return, seem willing to discount certain metrics that used to be required to justify the next raise or uptick in valuation. Nobody wants to miss out.

While the tech media headlines seem full with new such announcements each day, I am not sure that it is that easy for everyone.

Take for example a first time founder. They probably have a limited network to begin with. And it takes time to develop the necessary relationships and to build trust. The same fund that just wrote a large check to a serial founder may not show as much enthusiasm for this new founder’s company. They will want to conduct more diligence, spend time with the team and get to know them, their product and their market much better before making a decision. That longer process may leave the fund with less capital to invest, a potential conflict if they already backed a company in this space (or if a portfolio company pivots in that direction) or just lost in the noise of other deal flow.

Sure, if this founder came from the right military unit, university program, unicorn, etc. that would help get some initial attention. The selectivity and pedigree of these previous roles are a clear indication of the top-tier individual/team. Or at least it used to be. But funding is far from guaranteed just because you have the right logos next to your name.

So what does one need to do to get a new investor onboard? Here are some ideas for you to consider:

  1. Stand out. In a positive way.
  2. Prove that you can own your niche – industry, technology, market segment.
  3. Become “the” expert in your space.
  4. Develop your story, materials (deck, financials) and team to support the above.
  5. Don’t hesitate to ask. Worse they can do is say “no”.
  6. Be persistent, yet courteous.
  7. FOMO

I am not sure about this last one. But it seems to be a powerful element in the VC industry where we can find herd mentality driving decisions. I prefer to focus on developing momentum, achieving smaller wins as building blocks for success that could inspire others to join you on your journey. At some point (the tipping point) it will become an avalanche of interest. That is a better place to be than FOMO driven interest, IMHO.

In raising a fund, emerging VCs face many of the same challenges mentioned above. Based on my personal experience only, it is even harder to raise capital for a fund than for a startup. With a fund the investor has even greater uncertainty since they do not yet know what the portfolio will look like. There is no FOMO.

I think that the key here is rolling intros. Introductions from those who decided to get onboard, to others they can potentially influence, or at least get you an audience with to make your pitch.

My suggestion: Ask everyone, whether they said “yes” or “no” to your pitch, to introduce two others from their network who might be interested in what you are putting together. This will create a flurry of warm intros to mostly relevant supporters. Close one, and then another, as you start to create that snowball effect mentioned above.

Branding Thoughts

I have recently been thinking a lot about brands. This has come about from multiple directions. Some external, and some internal as we navigate our path for growth at SapirVP. My friend Jonathan Friedman over at Lionbird recently shared his thoughts on the topic in his newsletter.

In a follow up call shortly after, Jonathan shared further insights from his journey in building Israel’s leading e-Health venture fund. This conversation spurred me to put some of my thoughts down on paper. Jonathan – thanks for the inspiration.

A strong brand is a powerful tool. Like other powerful tools it takes significant time and effort to create one. And despite being powerful, brands are actually very delicate. One bad move, or even a mistake, can damage the value you worked hard to create.

While the above seems true as a generalization, the nuances and details are specific for each case.

Let’s take a consumer brand as a first example. Simon Sinek, in his book Start with Why? explains the Apple fandom as being way beyond great tech and an amazing user experience. Rather, he claims that it is a company on a mission which others want to be a part of. It took decades for this type of loyalty to develop and it was not necessarily part of Apple’s strategy from its early days.

Others may have argued this before me (please share references.) but I would suggest that in his second term as CEO at Apple, Steve Jobs brought with him a very important skill learned from Pixar: Storytelling.

Sure, Steve must have been good at pitching his company and selling his vision earlier in his career to have gotten that far. But what Simon describes goes beyond all that. It is a religious support of Apple products by a mass following that endorse it through their buying power. They not only choose to spend their hard earned dollars on the generally more expensive Apple products but also vehemently defend these products even when they perform below par.

This type of devotion is naturally associated with religion, but also with books and movies that rise to cult status to create mass followings (and sequels!). They are based on powerful storytelling infused with a mission – a why – that people want to be a part of.

Shifting to a second example, I want to share a recent email discussion I’ve been having with my good friend Gil Eyal, the founder and CEO of HYPR (now merged with Julius). Gil is my go-to-guy for all things influencer marketing related. He has worked with some of the biggest names across movies, music, sports, etc. in designing and running successful marketing campaigns.

Observing some recent headlines regarding influencers backing some questionable choices (in my opinion), I asked Gil whether these influencers care what they were associated with or was any headline coverage considered good PR? Or as the old saying goes – “there is no such thing such as bad publicity” – attributed to PT Barnum.

I was actually surprised at how definitive Gil’s answer was. He unequivocally stated that these influencers do indeed care. However, he continued to explain to me that it is not just about being affiliated with products/services that they genuinely care about (or at least are not strongly against). Rather, it is that they have worked very hard to achieve their success and recognition so they must protect it. And monetize it. But that is for a separate post as we are working on an idea to help them do this better.

Which brings me to my third and last example, our personal journey in building a new micro VC. In recent conversations with potential LPs we keep hearing them ask about our “super power”. While I think it comes through pretty well in our deck, I find myself needing to explain what isn’t necessarily obvious in the deck. Namely, that we are developing a brand, not just a single investment vehicle.

We have a unique approach to investing in seed stage deep-tech companies through the blend of what we do. It is not just one specific thing that gives us an edge. Sure, there are others that do elements of what we offer. There are some really great investors out there today and we are lucky to work with many of them. (Too many to name here, but you know who you are. Thank you for your collaboration across the ecosystem!)

But our core values could (and should) be applied to any new venture. Our current seed-stage deep-tech fund or our future funds, whatever they may look like. (Again, we have ideas and are already working on them…)

Creating a brand is about recognition. Flash an image, mention a name or quote a tagline – immediately everyone knows who you are and what you are all about. I’ve never needed the spotlight, though I don’t necessarily shy away from it. At times, I even enjoy it. Usually when I feel that I can add value. Not as a pulpit from which to preach or as a soap box to chase publicity. I am comfortable being backstage and just making things happen. Truthfully, as an investor – that is the role. We should remember that.

When I was a teen, my mom used to say to me that if you don’t publicize what you have done, then nobody can give you credit. That is true. But still something I struggle with. So, in 2021 I am launching a few initiatives to help spread the word about what we do and how we do it. If you don’t feel like you are hearing from me (or at least more than in the past…) then please hold me to this. Thanks.

Deep Tech vs Now Tech

I find myself struggling with the question of whether Deep Tech must always be a long-term prospect, by definition.

Sure, creating meaningful innovation takes time. Deep Tech means that a lot of research and development is going into this new product or service. And as an early-stage investor this would lend itself to a long-term investment strategy.

Accordingly, most of the companies that we invest in require significant R&D before they can go to market. We focus on these companies because that is where we can roll up our sleeves and lend a hand. We find ourselves mentoring them as they navigate early customer engagements to bring the voice of the customer into the R&D process. This helps create truly game-changing innovation and strong product-market fit. And the next round of funding to continue their growth.

But then I meet a deep-tech-driven company that believes they are market ready. They are usually wrong. If so, then we can still add a lot of value and they are just placed later on the spectrum of early-stage, a little closer to a Series A than to a Seed round. Still well within our wheelhouse. However, if they are right, should we even be considering them as an investment opportunity?

From a portfolio construction perspective it makes a lot of sense to have some “later stage” companies which may generate earlier returns. It also balances the levels of engagement required from our team amongst the portfolio companies, as far as the time we spend with each.

Despite these considerations, I find myself second-guessing myself. Am I too just being anxious instead of practicing the patience I preach to my LPs? Or can Deep-Tech be engaged with the market and still be considered Early-Stage?

I welcome your thoughts.

“That’s a great question!”

Now that demo-days and conferences have gone virtual, I find this statement outworn and, in most cases even fake.

Every speaker wants to create a sense of engagement with the audience. One way to do so is to show genuine interest and reflect it back towards them. When a question arrives from the moderator or from the crowd, it excites us to see the speaker excited to share their answer. The audience mimics the speaker. A genuine willingness to engage with a tough question and use it as an opportunity to both learn something and dispense additional information can be contagious. More good questions will follow. We all thirst for knowledge.

In the past when the speaker opened their answer with “That’s a great question!”, you could expect one of two things. Either they were genuinely excited and were about to engage in an interesting response. Or, they thought it was a terrible question asked by an imbecile who they were about to fry publicly with a strong response. As for the audience, in both cases they were excited to enjoy the show.

Today it feels like a speaker opening their response with this type of statement is doing one of two things that are entirely different from the above. At best this indicates a planted question to allow them to make a point they couldn’t fit into their originally allotted time/remarks. But sadly, it often reflects indifference. Probably due to Zoom fatigue. Hopefully not due to lack of depth in understanding their product/market/opportunity.

As we continue to adapt to this new work environment, the fundamentals of presenting remain true. If you haven’t read it yet, I suggest the great book: Own the Room: Business Presentations that Persuade, Engage, and Get Results – by David Booth, Deborah Shames and Peter Desberg. I keep seeing this book in offices, some of them owned by great speakers who I wouldn’t have thought would ever need it. Maybe they did and now they don’t.

If you don’t have a copy on your shelf then pick one up on Amazon. And read it. Before you set it on the shelf.

Have they come out with an updated version adapted to video conferencing? Has anyone else?

They should.

Balancing Conventional Wisdom

There is a lot of conventional wisdom out there. Most people are happy to share even when not asked to do so..

And often it sounds really smart. I am referring to the kind of things that just make sense when you hear them. For example:

Founder A is looking to raise money for their startup. They will ask fellow founders, friends, family, investors, read blog posts and listen to podcasts. She will hear statements like the following:

Take whatever you can raise. Raising $1M is the same work as raising $2M or $10M so raise more if you are already raising.

Diligence your potential investors. Be sure they add value beyond capital and that they will be there for you during the hard times and not just the good times.

Raise only what you feel is completely necessary. Grow through hustle and hard work to create value that will be recognized in the next round’s valuation terms.

These three statements all make sense but could actually be contradicting each other. The best board member may not have the deepest pockets. The more capital you raise, the faster you can grow, right? Or are hustle and grit more important?

Let’s take this one step further.

Investor B is considering an investment. In “VC school” they were taught the following:

Never miss investing in a great company because of valuation.”

Be sure to make the numbers work because it is all about returns to your LPs through your ownership percentage.

Both are really important points. Which often contradict each other. This exacerbates the challenge faced by our Founder A above as she tries to develop her fund raising strategy and navigate the process, balancing the feedback she receives from each pitch.

Creating a balance and clear path from all of this good advice, is not simple. It is the “art” part of venture capital. Different funds have offered alternative approaches to solving this.

The large firms – A16Z or First Round Capital – have done a great job of creating value beyond their capital and an ability to support companies long-term. They are truly great investors and not just a brand name. But these types of offerings are limited to large funds who generously invest portions of their management fees (the larger the fund the more fess there are to go around) towards creating these support systems for their portfolio companies.

Smaller funds need to be more creative. A lot of the value is added through the active involvement of the investing partners themselves, with limited support staff if any. This makes the balance a lot trickier. I really like the approach created by Founder Collective (and now copied by many other small funds including SapirVP) by which they focus on getting all their capital in early and then position themselves to be diluted alongside the founders. This creates an alignment that I have found valued by most founders. In return the founders are willing to give up a little more equity in the early round so as to have such an investor onboard and in their corner for the subsequent rounds. 

Both approaches focus on value-add investing. These were the best type if investor I’ve worked with and from whom I learned much. Now it is our turn to provide this for the next generation of great founders.

I think it is important for Founder A to remember that when an investor says that they are “founder friendly” that does not necessarily mean that they are exactly on the same page. There are different interests at play. Maintaining this balance is not simple and can often derail an investment process. As I am constantly reminded. But when the balance is established great achievements can be realized together.

For further reading on this topic I suggest Jeff Bussgang’s Mastering the VC Game.

Musings from a second lockdown…

We have now been in our second lockdown for 2 weeks and we have at least another two weeks to go. While our work is being done differently, it has not slowed down. On the contrary, we are finding ourselves busier than ever with even more to juggle. Despite no need to commute.

Since we are at the mid-way point of this lockdown period (we hope!), I thought it might be a good time to stop and reflect. Here are some observations and musings from my mind wandering. I welcome your feedback and perspective.

  • Deals are getting done in the VC world. Valuations are down but some may say this is just a “correction”. That is ok as long as we aren’t slashing valuations just because we can. Rather it should reflect companies adjusting to COVID and understanding the long-term impact on their market. In some industries that might actually raise a company’s valuation (Amazon? Zoom?).
  • As long as the players continue to act in good faith then good deals should get done. Founders need to be a little more modest and investors need to be a little less greedy. Don’t forget, this is a repeated game and long-term brand matters.
  • Real estate is going to change. Across the board and across geographies. I should have bought into many of the deals I have seen the past couple of years but passed on because “I wasn’t doing real estate…” – invest early and often. The secret of compounding.
  • Remote work will remain significant, but I don’t think we will eliminate offices entirely. The adoption of tools and new practices was accelerated but so are the downsides to it. We will not all just work from home going forward. But more of us will, even if just part of the time.
  • EdTech is more complicated. Thank God I am married to a licensed teacher who wasn’t actually practicing that craft when COVID hit. She is home shepherding our kids through classes and assignments while not actually needing to teach a class remotely herself. Teachers and students need to be back in a classroom. That is, until we can actually bring a virtual classroom experience to the home (pick your futuristic pop-culture reference). Not all learning needs to be done in a classroom – I am glad to see more assignments and work done virtually – but this Zoom thing isn’t working for us.
  • Digital Health is also a different story. Here I think we will see the longest and greatest impact as technologies enabling telemedicine, health operations efficiency, discovery and diagnostics are all being rapidly adopted by an industry which has been reluctant to change. There are many more elements here that I think will stick around once we get past this pandemic. If only for the fear of the next one.
  • As I have written before, for me personally and for my “job”, the lack of in-person meetings has made things more complicated. Sure, I hate sitting in traffic like everyone else. And air-travel gets old quick too. But I miss being able to spend time with people and get to know them. To pick up on the non-verbal cues and body language. See them in their element and in other settings beyond their Zoom-background-of-the-day. I look forward to walking through the labs and “feeling” the team/science/product/culture of each company. I’m even ready to got back to coffee-shop meetings which I had become bored with. Please make my latte soy. Thanks!

New Year Restrictions

In Israel we are on our way into lock-down. Again. Just as the Jewish High Holidays are upon us. A time of coming together to bring in the new year with prayer – giving our thanks for the previous year and sharing hopes for the new one – with family and friends, in synagogues and around our tables… Well, that is not going to happen this year.

While some may argue that this is most fitting considering the past 6 months, it is still frustrating. Frankly, I think we could have done better.

It is easy to blame the government (now that we finally have one!), and some might even say that they prefer this approach as the easy way out. It seems to me that the timing of the lock-down actually makes sense. Besides it limiting the masses customarily coming together, it also takes advantage of the numerous vacation days already built into the Israeli calendar during this time of the year. In their defense, I do realize that this is the first pandemic they have been called on to lead us through. But the numbers are rising quickly and every delay creates a sense of “too little, too late”.

The period leading up to Rosh Hashana – the Jewish New Year – is a period of introspection. Taking stock of where we are and who we are. Compare these with what and who we want to be. Make commitments to do better in the new year… Take personal responsibility for making the world a better place by each doing our part.

“An early lesson I learned in my career was that whenever a large organization attempts to do anything, it always comes down to a single person who can delay the entire project.”

Ben Horowitz
The Hard Thing About Hard Things:
Building a Business When There Are No Easy Answers

I look around and I know that we can do better. We must take personal responsibility to adhere to the social-distancing guidelines, while creating personal accountability for the health of others in our communities.

That is the only way we can contain the pandemic, as we continue the search for a vaccine… May it arrive swiftly in the new year so we can start to rebuild – emotionally, economically and, most importantly, together.

Shana Tova! May it truly be a good year of health and prosperity for us all.

Un-Real Meat

The food-tech space has gotten hot over the past few years. Industry specific funds and accelerators have sprouted to advance these companies and lots of $$$ are pouring in to revolutionize an industry we consider outdated but in reality has always been innovating.

The food industry has thin margins. Consider the many interested parties involved by the time it reaches the shelves in your local grocery store, all looking to make a $1. Each link in the chain has been innovating to optimize their slice of the pie to capture more profit. From the raw materials to manufacturing to shipping and stocking the aisles – all have seen significant progress over the years.

This need to optimize is especially true for the producers for two reasons. The first is economical as mentioned above. Aggregating the raw materials and creating a product that needs to hit the shelf at a price point the consumer is willing to pay while allowing for everyone in the chain to make money. Otherwise it just does not work.

The second is health. We have been learning just how bad our eating habits have been for our bodies and the search for healthier food is no longer reserved for the do-good-health-nuts of yesteryear.

All this comes to play in the alternative meat industry. We already have major players in Impossible Foods and Beyond Meat, with many start-ups at various stages of development following quickly behind them. It has been fascinating to learn about this industry and I have come to a key observation. The food industry is all about marketing. Brand recognition is critical and differentiation is not just by taste, health attributes or cost. Those become secondary as brands compete for your love. But first they need to get you to pick them up off the shelf.

On a recommendation from Ben Wiener, I have been reading Billion Dollar Burger by Chase Purdy. The sub title says it all: Inside Big Tech’s Race for the Future of Food. So far it has been a great read providing the insights above and more.

If I were to define it a little differently than I originally stated above: The food industry has always required innovation. They are changing how they innovate, adopting tools and practices from high-tech and start-ups. Is this really different than industries that had little to no-innovation till the past few years such as prop-tech?