If you ever wondered where new internet ideas come from – they come from places like the minds of the people who entered the Exit ‘09 contest. The contest, sponsored by a slew of Israeli companies (chief among them Israeli development house Sergata) is open to anyone with a good idea – and if the idea is good enough to get into the contest, they could win a “startup package” worth $250,000 (including $100,000 in cash)! Even better – the format of the contest is a sort of “reality TV” show, where fans of startup ideas can vote for their favorites, with a panel of judges (top people from Google Israel, IBM, The Marker, and others) picking the winner.

Most of the 26 contestants put up a video on the Exit ‘09 site describing their idea or technology. I wrote about the contest in a Jerusalem Post article (which you can see here), but here I wanted to say something about the videos (ie, the ideas) – which got me thinking about the whole business of “innovation.”

There were a couple of really original ideas – one entrepreneur wants to put up a site where people who wear hearing aids can adjust them using a website, another plans a “pet interface” site for dogs and cats who are at home all day alone (they can communicate with their masters, or even with other pets!). Another site would provide a “virtual shrink” for counseling and coaching.

But many of the other ideas seemed to be very similar to already existing web sites and services. So, if the contest was based on “innovation” – having a really good, different idea – many of the contenders wouldn’t have qualified to be in the contest, based on what I could see.

But modern “innovation” – the kind that makes you hundreds of millions on the internet – isn’t necessarily just about having a unique idea. It can be about having a unique twist on an existing idea. It’s about the packaging, the marketing, the way you convince people to use it – the way YOU see it being used. You can take an existing idea and tweak it, turning it into something big – much bigger than the original idea you were tweaking. That’s really all you need!

Believe it or not, one of the biggest “breakthrough ideas” of the internet era – distributing music over a network – is actually a century old! The Tel-Musici Company of Wilmington, Delaware, was, according to this article, streaming music directly to users’ homes in 1909 – via the telephone! Customers would call Tel-Musici and order a selection, and for three cents (seven cents for lengthy operas), the company would stream music to the customer’s phonograph, via a special transmitter connecting the phone and the phonograph that “intensifies and enlarges the volume of sound of all phonographic records but eliminates the metallic, rasping and grating features which have heretofore constituted an objectionable feature of phonographic concerts.”

I couldn’t find any references on whether Napster inventor Shawn Fanning was aware of Tel-Musici, but I wouldn’t be surprised if he was. And there are lots of other examples of successful programs that conquered the market from less well-marketed previous offerings.

In other words, to succeed in the internet business, you don’t necessarily even need an original idea! And one thing I get from watching the videos on the Exit ‘09 site is that you don’t necessarily need much technical knowledge either (many of the presenters say straight out that they don’t have a technical background). And in fact, the premise of Exit ‘09 is that the winning idea gets lots of help from the dozen or so companies offering programming, marketing, and branding help. All that gets outsourced to the service providers. In other words, the only thing you have to bring to the table is the “tweak” – the little twist that will put even an already existing idea into a new light. Exit ‘09 proves it (and a number of friends of mine who began successful startups prove it too).

Wow! It that’s all it takes, what’s stopping us from raking in the bucks?!?

Tags: Barack Obama, Business and Economy, israel, Jerusalem, Jerusalem Post, Middle East, Napster, Shawn Fanning

I’m always on the outlook for cheap cellphones, considering how much I (and my wife and three teenagers who have lost a coule over the years) depend on them. But I got tired of getting ripped off by Orange, Pelephone, et al, not so much for the service, but for the old phones they try to pawn off on us, selling them for twice the price they retail for when new! As I wrote a couple of years ago, all you had to do was compare the web stores for the Israeli phone companies where they list the prices for their devices, and compare them to the prices you can buy them for unlocked on Amazon.

I even proved that it could pay for Israelis to order the phone; even after you pay the customs and the sales tax and shipping, the “full price” devices the Israeli companies are selling can be had from sites like Amazon for a third of the price! And when it comes to the “kosher” phones they market to the Chareid public, the Israeli cellphone companies outdo themselves; for their “mehadrin” lines, they take TEN year old analog phones (probably purchased for 2 cents on the dollar!) and sell them for even MORE than they charge for the latest 3G phones!

So, I took a conscious decision a couple of years ago – never again would I buy a phone from Orange (with whom I currently have my account). Instead, I order unlocked tri- or quad-band GSM phones from Amazon, to be brought back either by me or by friends. Comparing the prices, it made sense.

And, I was about to do the same thing this year, too. Finding myself in need of a cellphone, I checked out my favorite department on Amazon, and found that they were selling the wonderful Nokia 5800 MusicExpress for $299 – a bargain, considering its capabilities. Nokia fans had been touting this model as an “iPhone killer” (a title that now seems to have transferred to the N97), because it has a touch screen, plus all sorts of extra features even the iPhone 3G doesn’t have (video recording, expandable storage, and as many Symbian apps as the iPhone has for its platform).

Somehow, though, this week I found myself in an Orange store – where I saw their latest ads for the latest “deals” they were offering. Like a dog that’s been whipped one too many times, I of course looked the other way – but the salesperson was available and I had to wait around for something anyway. One of the deals showed a tiered pricing system on some devices – like, if you speak a certain number of minutes a month, you pay less for the device. Maybe there was a deal to be had. Who knew?

So I asked. I explained to the salesperson what my strategy was, and how I was going to save a ton of money buying a top of the line, relatively new phone directly and unlocked. He checked his computer and told me, “well, you speak about 200 minutes a month and pay X amount per month on that phone. So you’re a good candidate for a deal.” Yeah, but how good?

“How about this: I’ll give you the Nokia for 499, and a package for 18 months that will give you 200 minutes, 200 SMS messages,  3G internet (the device has wifi too), and I’ll even throw in two months of GPS free.” 499!?! But I told him I was paying 299.

It took me a couple of seconds (yes, I can be “slow”), but then it hit me. This is Israel! And he’s offering me a $299 phone for NIS 499 (in six interest-free payments) – which is about $140 at current exchange rates! Not to mention the 35% I am now saving on my actual phone use! And, to top it off, he threw four Orange painter caps into the bag with the phone (and we all know that we die for the cute “freebies” the cellphone companies give out!).

I’ve been checking the phone out, and it seems to work. I’ve also been searching all over for a “refurbished” sticker and I can’t find one. I mean, there must be a catch! Why would Orange be selling this phone so cheap (of course, they should really be giving these things away, like companies in the rest of the world do). The only issue I could find is that phones manufactured before February 2009 may have an issue with the earpiece getting loose. I haven’t been able to determine the manufacture date of this unit (logic would say that these discounted phones are leftover stock that had problems, but equal logic would say that it’s unlikely Orange or any retailer would have had such a large stock of phones left over from more than six months ago). However, if this is one of the problem phones, I’ve got a one year manufacturer’s warranty, so I’m covered there. Still scratching my head, though – what’s come over Orange to make them so “generous?”

(P.S.: This happy occurence does not make me more optimistic about the pricing structure for the iPhone when it finally comes out in Israel. I explain why here).

Tags: Android, GSM, iPhone, israel, Mobile phone, Nokia, Symbian, Touchscreen

After many months, the Modu phones finally go on sale in Israel this week. The Modu, for those not familiar with it (informative article about it right here) is the modular phone that changes its functions, depending on the “sleeve” you put it in. They have, for example, a sports module, which lets the phone record steps, running speed, distance, etc. Another module turns the phone into a mini-boombox, which plays great stereo music. Yet another module turns the device into a full screen video system, letting you watch movies anytime, anywhere.

At 43 grams, the Modu is the lightest cellphone in the world, all by itself (you don’t need a sleeve for the basic phone functions). At NIS 500 (about $130), the Modu is a bargain, considering the usual cost of phones here. Unfortunately, it’s only available for Cellcom customers right now. It is also to go on sale soon in the Philippines, Central and South America, India.

The Modu was supposed to have been released months ago, but according to Modu CEO Dov Moran,  the project suffered unforeseen delays, with investors getting cold feet and supply issues (Texas Instruments, which Modu relied on for the phone’s chips, announced it was getting out of the cellphone business, and the Chinese company that manufactured the unit and the sleeves shut down). All’s well that ends well, though, and Moran finally has fulfilled the Modu dream of developing a phone with advanced functions that won’t strain users’ budgets.

Tags: Cellcom, DovMoran, India, israel, Mobile phone, Modu, South America, Texas Instruments

Usually, mixing business with politics isn’t such a good idea if you’re trying to sell somebody something. You never know whom you’re going to offend, and the customer (and cash) is king.

But if you’re just giving away your product, I guess politics can play a role – maybe a big one. That’s definitely the philosophy of Zvi Schreiber, CEO of G.ho.st. When you hold an opening event at a gap in the security fence (“separation wall”) separating Jerusalem from Bethlehem, you’re wading ankle deep in one of the hottest political issues in the region.

That’s exactly what Schreiber did, launching the final beta version of his G.ho.st virtual operating system at “this symbol of division,” according to special guest Tony Blair, who added “I’ve done many launches in my life, but this ranks as about the most unusual.”

With G.ho.st, users can store up to 15 gigs of files, and use an office suite with their files, browse the internet, and access their e-mail from any computer in the world. User accounts are stored in the “cloud,” the one run by Amazon, and you can log into your G.ho.st  account anywhere.

Why the security fence? Because most of the programming for G.ho.st  is being done by programmers who live in Ramallah! G.ho.st’s corporate offices are in Israel proper, but Schreiber has outsourced almost all of the G.ho.st  architecture work to programmers in the Palestinian Authority (according to what he told me). “I’m perhaps the only CEO in the world who can’t visit the company’s main office, even though it’s like 15 kilometers my house in Jerusalem,” Schreiber said at the event.

In my interview with him, Schreiber described how staff meetings are held in a gas station near Jericho. “We’ve even had company meetings there, since it’s the only place we can get together that both sets of employees can get to,” he said. But it’s worth it, he added; “I’ve always wanted to make a contribution to coexistence, and a high-tech firm with offices in Israel and the PA seemed like a good way to do it.”

What to make of G.ho.st? The question come up because there are those who are accusing G.ho.st of “exploitation” in the guise of “promoting coexistence.” Why? Schreiber says his PA programmers are well compensated – “I’m not aware of any other company in the PA that gives out options to its employees,” Schreiber told me – but for sure the salaries those benefits are based on are going to be significantly less than he would pay to Israeli employees.

In that sense, Schreiber has succeeded in replacing Bangalore with Ramallah. If you think there’s nothing wrong with exporting jobs to the Far East, then there’s nothing wrong with exporting jobs to the Palestinian Authority; if you believe employers have a responsibility to their national entities and the citizens of the country that afforded them the opportunity to be in a position to employ others, then you have a problem with G.ho.st.

In addition, because the Palestinians are such bitter enemies of Israel, some would argue that Schreiber is wrong on two counts: One, he’s providing jobs to Palestinians who want to see us dead (or maybe just deported), and two, he’s exporting jobs that Israelis would be happy to do during these recessionary times.

According to this AFP article, most of the Ramallah employees work for a third of the pay of their Israeli counterparts. Quoting Dror Globerman of Ma’ariv, the article says:

“I think the incentives are definitely there. (The West Bank) is cheap and close, and Palestinian engineers are talented people.”

So it’s all about the money for G.ho.st – or is it? The AFP article goes on to say:

However, the persistent threat of political instability still encourages most Israeli entrepreneurs to look to calmer parts of the globe. “No one can guarantee that a Palestinian engineer will always be able to reach his office or have an Internet connection,” Dror says. “Israelis are used to having these fears addressed to them by foreign investors.”

In other words, Ramallah is not Bangalore. Given the volatile political and security situation, work could be suspended due to an IDF action in response to a terror attack at any time, or (probably more likely) a shootout between Hamas and Fatah troops near the G.ho.st offices. (Given the rampant crime in the PA, I wonder if Schreiber has to pay protection money to criminal gangs – or the “official” police -  in order to be left alone? See, that’s a question you can’t ask a CEO!). For dealing with those issues, Schreiber deserves a lot of credit.

And G.ho.st fits right in with Binyamin Netanyahu’s declared desire to help the PA economically – the idea being that once Palestinians get a taste of the “good life” in Israel, they’ll have a strong incentive to play peace ball. That there is something to this is clear when you speak to Arabs in Wadi Ara (as I did) about what they think of proposals to move the border and rope them into Palestinian Authority controlled areas.

So what do you think the Palestinians think about all this? Do they feel “colonialized” or “exploited” by Schreiber? Not according to this article by Ma’an, the official PA news agency.

The project, three years in the making, was funded by the Benchmark Capital Fund and Noa Rothman’s foundation, and hired Palestinian and Israeli developers trained in local universities to push forward the development.

“It was a program aiming to bring some of the prosperity and skills to Palestinians that have brought success to the Israeli [IT] industry,” one organizer said.

The program’s launch, in front of Israel’s separation wall in the Bethlehem-area town of Beit Jala, focused on the potential of creativity and economic development for the creation of a stable future for both Israel and Palestine.

Of course, there was the requisite paragraph afterwards on how there needs to be a full Israeli withdrawal to the pre-1967 borders and the return of descendants of refugees, etc. etc. But it sounds to me like Ma’an knows a good thing when it sees it. As the AFP article quotes Ramallah office director Khaled Ayyash as saying:

“We are creating jobs, we are getting good salaries, and we can work here in Palestine instead of going abroad.”

Tags: Benjamin Netanyahu, Middle East, Tony Blair

So was it a fraud – a scam – as so many now seem to believe? Was the story earlier this week about the miracle LifeKeeper patch – the patch that could predict heart attacks in advance, and give blood sugar readings without injections – cooked up for some nefarious reason?

If you haven’t been following this story, you’ve been missing some high drama. After the initial news reports on the patch developed by the SafeSky company (I have to admit, I thought from the start that it was a strange name for a medical device company!) that was now valued at over a billion dollars, after the company made a deal with MicroStar International to sell a one third interest in it for over $300 million, an avalanche of reports appeared questioning whether there really was such a deal, or if the patch even existed. The patch has never been seen by an independent third party, apparently; MSI denied that there was any deal with SafeSky, and has even threatened to sue for defamation if their name was not kept out of the story.

CEO Gabi Picker quit, saying that he, too, had never seen the device, or any of the paperwork revolving around it (like FDA certification). One of the principals of the company, Arik Klein, served time for crimes some years ago after he was convicted of fraud. The deal was mostly worked out by fax and e-mail (some reports said), with the e-mail address not really that of MSI, but of an e-mail address that looked legitimate but was really owned by Klein himself. Etc. etc. etc.

So how could so many intelligent people (I’d include myself in that number, but I’m not that intelligent!) fall for this alleged scam (we’ll get back to that word “alleged” in a minute). Only because so many other medical and tech miracles have come out of Israel in recent years.

I spoke with my buddy Jameel at length about this story – he didn’t believe a word of this from the beginning. He is also a certified EMT who has had (unfortunately) much experience with heart attacks and the like, and according to him, the signs of an imminent heart attack (high blood pressure, an adrenaline rush) could be attributed to many factors other than heart problems, such as exercise (but for people with weak hearts, wouldn’t those signs indicate increased danger anyway?). Plus, he says, the idea of a non-invasive method for checking blood sugar doesn’t exist either.

Well, I’m not a doctor (I don’t even play one on TV!), so I can’t comment on the medical aspect of what Jameel says. But I do know something about medical devices and software technology – and the idea of using sensors to determine a threshold (such as heart rate) that sets off an alarm is nothing new. The patch is supposed to relay the information it collects by bluetooth (certainly not unfeasible). Similar technology – sensors, alarms, communication – can be found in any number of products. The issues being disputed are getting the data (using sensors in a patch) and communicating it (the patch is thought to be too small to hold a communications chip).

But I still say that the scam is “alleged” – meaning that there really could be a LifeKeeper patch.  According to this story, the folks behind the patch are to appear on Israel Channel Two Friday night in an exclusive interview, and will continue to claim that the patch exists, and that it will be sold. Dr. Amos Bouchnik, a respected businessman who is half owner of the company, says that there will be a big deal for this patch, which does exist. “I believe that there will be many deals. The company called SafeSky will be worth $20 or $30 billion in the future.”

Is he crazy? If you believe the whole thing is a scam, and considering the week Bouchnik had, you would have to think so. And yet the man is a millionaire several times over. You would think that he would drop the pretense at this point. Any value that could have been attributed to this scam has now been compromised. Some said it was designed to pull in investment money, others said it was a money laundering scam (lots of money going into the SkySafe account that could be sourced as part of the deal by tax authorities). But the story has been reported around the world by now; who would sink their money into this?

In other words, what does Bouchnik get out of going on TV and continuing to make claims?

Until I get a satisfactory answer, I’m sticking with “alleged” scam – and hoping that this is the real thing!

Tags: Crime, Fraud, Heart disease, israel, Money laundering, Television, U.S. Food and Drug Administration, Warfare and Conflict

At first it sounded like another dream deal: An Israeli company sold a one third interest in a medical device it developed to a British-Taiwanese company for $370 million – making the total value of SafeSky’s LifeKeeper Patch over $1 billion. The deal, between SafeSky and Micro-Star International (MSI), is one of the biggest ever in relative terms for an Israeli hi-tech industry.

According to the company, the LifeKeeper patch can read information about the wearer’s medical state – recording data such as body temperature, heart rate and rhythms, blood pressure, and blood sugar levels. When you wear the patch, the information is transmitted via Bluetooth to a cell phone, where an application records the information. The phone program evaluates the data, and if the information being recorded indicates that that wearer is in danger of a heart attack or stroke, it can send an emergency message out to doctors or emergency services, who can then locate the wearer using the phone’s GPS capabilities. (I’m proud to say I had the first full English-language report on this, which you can read here)

Sounds like a medical miracle! And the fact that a company was willing to stake so much money for just a partial ownership seems like a miracle, too – in fact, it’s pretty miraculous that any company would have that kind of money around today!

Maybe it’s jealousy or politics (one of the co-inventors of the patch is said to be a good friend of Prime Minister Netanyahu), but a smattering of reports have appeared in the Israeli press over the past day or so questioning whether there was a deal, or whether the patch even exists! This, despite assurances by the owners that the deal was done and the check from MSI is already in the hands of SafeSky’s Tel Aviv lawyers. In an interview for a print publication (whose name I am not authorized to reveal online!) the interviewer asked co-inventor Amos Bouchnik about the reports, and he dismissed them:

“We’re not paying attention to them at all. We’ve kept the device under wraps at the request of the purchaser in order to ensure maximum industrial security. MSI will conduct a presentation in Tel Aviv in the near future and demonstrate it to doctors. The company has been examining this device for the past 18 months and it is indeed a device that will change the face of medicine.”

SafeSky is a private company, it made a deal for a product it owns, and it doesn’t have to reveal any details of its work – including to the media. But apparently the media doesn’t agree. Channel One ran a rather snide report questioning whether the device even exists! As if Bouchnik and his partner Arik Klein (Netanyahu’s friend) made the whole thing up! Note that both are very successful dentists, of all things – entrepreneurial dentists, who own chains of dental clinics and are involved in several other businesses. SafeSky, which they wholly own, has other products as well, such as “a better solar panel,” which can collect 100 times more energy than panels currently in use.

Not only do the two own the exclusive patents to the patch: They have never taken VC or other investment money, meaning they don’t owe anybody anything.

And therein probably lies the root of their spate of bad press, if I know my Israeli reporters. Probably some goon demanded to see the patch in action, and Bouchnik and Klein told them no way – to which the reporter got very offended and threatened to do a hatchet job on them. Unimpressed, the two sent the reporter his or her way, and s/he made good on the threat by running a nasty story questioning not only their ethics and reliability, but their sanity (as if they made the whole thing up!)

And if you think I’m being too hard on the reporter, I invite you to listen to the news magazines on Israel’s second radio channel (Reshet Bet), at 9 AM, 10 AM, Noon, and 5 PM. In the many live interviews with newsmakers they conduct, the speakers – ranging from politicians to plain old Joes – have to contend with constant interruptions, innuendo, and overall nastiness and rudeness. I mean it; speakers get interrupted by the hosts at nearly every sentence. It’s as if the hosts have to hear themselves speak every few seconds, in order to make sure everyone knows they’re in charge! That’s the caliber of reporter in Israel’s media – and making up a story just to get back at a company that doesn’t want to play ball with them is definitely not out of the realm of possibility. (Note: Picture is NOT of the LifeKeeper Patch, but for illustrative purposes only!)

Tags: Barack Obama, Benjamin Netanyahu, Embassies and Consulates, Government, israel, Micro-Star International, Middle East, Tel Aviv

Lest you think the Arab boycott of Israeli goods has passed from the earth, rest assured that it has not – and its latest victim is Israeli cellphone application maker Trixcell. This is the company that makes professional-looking magic tricks for cellphones that anyone can do. I’ve interviewed the guys from Trixcell (Shlomi Grandes and Menny Lindenfeld, who is a world-renowned professional magician) a couple of times, and have written a couple of articles and blog posts about them.

The tricks are really good (check out the videos on their site), and what’s most amazing to me is that this is the first time in history that sleight of hand is now possible for everyone; before, you had to spend weeks, if not years, perfecting the kinds of tricks you can perform using your cellphone and Trixcell’s illusions. What Photoshop did for graphic art and Quark xPress did for page layout, Trixcell is doing for magic – namely, putting it in the grasp of the non-professional, thus breathing new life into it and opening up many more markets for the profession.

But in my latest conversation with the Trixcell guys, they told me that their applications – which are sold in 90 countries around the world – have been banned in Egypt, because someone figured out that they were an Israeli company. Apparently they left the name of one of their developers in the credits of an application, and an Egyptian customer of Mobinil, the country’s largest cell service provider, complained that there were Israelis involved in the tricks. Not wishing to seem too “Jew-loving,” apparently, Mobinil dumped the Trixcell tricks. Grandes told me that it never occurred to him and Lindenfeld to hide the origins of their applications, and they had no intention of doing so either. He also told me a couple of things I promised not repeat; his official comment was “Israel has a peace treaty with Egypt, and even if they criticize Israel there, Trixcell only deals with business, not politics, so it’s a very unfortunate reaction on their part.”

Egyptians may be willing to boycott Israeli magic tricks – and Ariel detergent, since it shares a name with a former Israeli prime minister, and has a logo sort of looks like a Star of David (Proctor and Gamble, no stranger to logo lunacy, changed Ariel’s logo in order to de-emphasize the ‘Israeli’ connection). Maybe none use Motorola phones, because of the company’s Israeli connections, preferring Nokias or Sony-Ericssons.

But how do they handle Intel? I mean, since most of Intel’s processors were designed at least partly in Israel (nearly all of the company’s laptop processors were), and since so many computers carry an “Intel Inside” logo, what computers do Arab Israel-haters use? AMD? Well, some boycott sites do instruct their lackeys to do just that. But then, they probably didn’t hear about AMD’s eventual intention to open a research center in Israel, since “AMD considers Israel as a center of knowledge and innovation, and we do consider making a strategic investment here.” But you have to believe that at least some people – even among those advocating boycotts of Israel – are using Intel-based computers. If you ask me, it’s chutzpah of the first degree – using the computer or laptop brought to you by Israeli brainpower to advocate a boycott of that same Israeli product! Bizarro!

Tags: Advanced Micro Devices, Egypt, Intel Corporation, israel, Magic, Middle East, Mobinil, Prime Minister of Israel