The Internet

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17 Νοε 2013 (πριν από 3 χρόνια και 10 μήνες)

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The Internet


From where,
where to…?

Shlomo Kalish, founding partner
JGV

February 2002


All materials contained in this presentation are confidential and not intended for
distribution without the written consent of Jerusalem Global Ventures.

CONFIDENTIAL

Agenda


Overview of JGV


What Was


What is


What will be


Investment themes

CONFIDENTIAL


Founded by Dr. Shlomo Kalish


VC fund focusing on seed/early stage Israeli startups


Focus on funding exceptional individuals


Strong GP’s and professional staff


Managing $200M from world players




Overview of

Jerusalem Global Ventures

CONFIDENTIAL


Dr. Shlomo Kalish


Founding Partner



Founder of Jerusalem Global Group which represented such
successful companies as:
Amdocs, Orckit, Creo, Galileo

Technology, QXL, PictureVision, Memco, DSPC, Breezecom, ESC
Medical Technologies, and Xacct.


General Partner in Concord Ventures I, LP (Saifun, Exent, Oridion)


PhD from MIT, faculty member of the School of Management at Tel
Aviv University


IDF Air Force fighter pilot



Jonathan (Yoni) Hashkes

Managing Partner


IT



Co
-
founder of Magic Software (NASDAQ: MGIC)


Co
-
founder NDS, a News Corp Subsidiary (NASDAQ: NNDS)

General Partners

CONFIDENTIAL

Jerusalem Global Background


Seven years of leadership in financing high
technology in Israel


Highly recognized and respected name in Israel

CONFIDENTIAL

Institutional & Strategic
Investors


Africa Israel Investment


Agilent Technologies


Time Warner/AOL


Bank of America


Bank Hapoalim


Bausch & Lomb


China Development Industrial Bank


Clal Industries


Conexant Systems


Comverse


Executive Investors



AMCC (MCC)


Check Point


Chiaro Networks


Galileo Technology


Merril Lynch


Qualcomm


Raza Foundries


Saban Entertainment


Texas Instruments





CTC Itochu Techno Science


DEP Technology


ECI Telecom


Eurocom Communications


Motorola


NDS


Net2Phone


Poalim Investments


STI Ventures


Telecom Italia Lab


Tyco


Limited Partners

CONFIDENTIAL

IT Portfolio


APPower Systems
: Enabling software publishers to communicate
with their users (URM) and the users with other users from within the
application.


Kashya
: Storage

Networking over WAN.


LocatioNet Systems
:
Location
-
based services platform with unique
mapping and delivery services.


Mobile Economy
: Billing and settlement for mobile
-
Internet.


Unicorn
: Enterprise information unification.



CONFIDENTIAL

Internet: what was


In the beginning: the original sin


free for all


anonymous


Opened to everyone:


Killer app: email


WWW


presentation languages


For publishing information/entertainment


Commercial ISP’s: AOL, Compuserve, etc.


Commercial access to email and information


NetScape formed to commercialize WWW


Quick time to billions $$$


E
-
Commerce

Ebay, Amazon


The big bang…

CONFIDENTIAL

The Big Bang


Virtual World


no need for physical anymore


Ecommerce, entertainment, relationships, etc…


Day traders and internet traders set the agenda


Running stocks, rumors sites, breeds grid…


Investors follow through


Hundreds of billions $ invested in
1000
’s of companies


“The WorldWide Democracy


anyone can sell, advertise, no
entry barriers, quick time to $$


Forget old economy


long live the new economy!!!

CONFIDENTIAL

Some Examples


eToy.com, pets.com, anything.com


Names selling for millions of dollars


Internet VC’s

CONFIDENTIAL

Reality sinks in


The dot
-
com death toll more than doubled this year,

with at least
537
Internet companies either going out

of business or seeking refuse in bankruptcy court...."

-

Associated Press article, Dec.
28
,
2001


Hundreds of billions of $$ erased in market value


CMGI from $
40
B to
400
M


Idealab from $
4
B IPO to being sued by investors

CONFIDENTIAL

Was vs. Is


The world is not virtual


Billing, Inventory, shipment, installation, returns, service, training


People want some physical relationships


Real people


Real space


Real time


The world is not infinite:


Finite number of people


24
hours in a day


Finite amount of money

CONFIDENTIAL

Was vs. Is (contd.)


Old Economy vs. New Economy:


There is no free lunch


Value of a business is the NPV of cash flow


Can you generate profits?


You need to:


Strong brand


Relationsips with customers?


Loyalty


Uniqueness


Premium value?

CONFIDENTIAL

Was vs. Is


There is no democracy:


One big player in every field


eBay


AOL


Amazon


eTrade


Yahoo

CONFIDENTIAL

So if everything is changing

what’s constant?


Homo Sapiens


Have basic needs:


Security


Communications


Entertainment


Etc. etc.


Technology provides for:


Better, faster, more powerful


Question is:


Are you supplying a basic need to someone?


Is this a pain factor?


Can you do it better/cheaper than the competing technologies


How do I develop an ongoing relationship with the customer?

CONFIDENTIAL

What is the internet


New more powerful/efficient/quicker communications medium


With good publishing/presentation capabilities (TV)


With ability to switch to each one individually (Telephone)



And….


Also allowing computers to communicate….

CONFIDENTIAL

Communications


Past:


Mail


Phone


Fax


Internet


E
-
mail


Instant Messaging


Video/Voice


Cellular communications


Mobile email


SMS


MM Comm.

CONFIDENTIAL


Business and the Internet


Each business provides customer with a service


Customer is willing to pay for service:


Killer problem


Able customer


HW components, information components, human components


All businesses have to have phones!!!


However, need to remember:


Customer

micro marketing


Relationships


Feedback


Higher the information level


the more “internetti…”


Newspapers



WSJ, Venture Wire


Entertainment



Napstar,


Banking


On Line trading

CONFIDENTIAL

Business Models


No free lunch


pay per use and per quality


Develop the infrastructure to support this


QOS


Security


Billing


Customer relationships


Information: Subscription for defined segments


WSJ, VentureWire


Advertising for mass market communications


Yahoo, CNET (portals)


eCommerce:


Existing brands and stores have to use internet


One key pure play player in each category


eBay


Amazon

CONFIDENTIAL

What will be


Bright future


great efficient communications and publishing
medium


Communications


Entertainment


Information


Changes the way we interact and do business


Every business must have it


Most people will have it


However, it enhances what we do, not replace

CONFIDENTIAL

2002
Positive Trends in Israel


Technology based vs. e
-
commerce, dot.com


Fundamentals are strong:


Highest rates of VC/GDP (USx
3
)


Highest rate of Engineers/Capita (USx
2
)


More experienced entrepreneurs


Entrepreneurship spirit high


Labor, rent & services costs are falling


Lower prices


Better people


Better due diligence


More time to build strong companies


Less competition in seed



CONFIDENTIAL

What makes a success


Great leadership


A leader is someone that people will follow (Drucker)


Experience, salesmanship, charisma, integrity,
dependable, motivated, energetic and agile


Customer focus


A specific customer (with ability to pay)


Identify a real painful problem


Position a solution to solve problem


Cost cutting


Increase efficiency


CONFIDENTIAL

JGV Focus


Focus on infrastructure & enabling technologies


Looking for network infrastructure and
middleware platforms


Serve as basis for operators to deploy revenue
generating applications / services.


Leveraging changes in the market and/or new
technology.


Two existing investments:


LocatioNet



Mobile Economy


CONFIDENTIAL

Happy Purim!!


Mishenichnas Adar Marbim Besimcha!!


Thank You



Dr. Shlomo Kalish

Jerusalem Global Ventures


CONFIDENTIAL

Is the Internet Good or Bad


Technology is neutral


Depends what you use it for..


Help the needy


Educate the remote



Or



Promote hate and Nazism


Teach terrorism


It is another little world:


You decide if it is going to be good or bad

CONFIDENTIAL

Success (Contd.)


Leverage the strengths of others


Work with the giants


Outsource everything


Money makes the world go around


Raise when you can and always more


Maximize your LT value, not your percentage

CONFIDENTIAL

The Mobile Market


CONFIDENTIAL


770
million wireless subscribers currently


12.6
% of the world’s population


Penetration to double in next
5
years (
Yankee Group
)

The Cellular Market opportunity

Source:
UBSW

0
200
400
600
800
1
,
000
1
,
200
Q
1
/
1995
Q
1
/
1996
Q
1
/
1997
Q
1
/
1998
Q
1
/
1999
Q
1
/
2000
Q
1
/
2001
E
Q
1
/
2002
E
Millions
0
.
0
%
5
.
0
%
10
.
0
%
15
.
0
%
20
.
0
%
25
.
0
%
Total subscribers
Penetration
Source: UBSW

CONFIDENTIAL

Subscriber Growth Is In Developing World



Cellular operators in the US and W. Europe need to look
beyond total subscriber numbers for future growth

Growth In Subscribers By Region,
2002
E
0
%
5
%
10
%
15
%
20
%
25
%
30
%
35
%
40
%
Latin
America
Eastern
Europe
Asia
Pacific
World
North
America
Western
Europe
Source: UBSW

CONFIDENTIAL

Opportunity To Leverage Subscriber Base


Developed world
-

High penetration


Opportunity to sell new handsets, services and
applications

2
Q
01
Penetration Rates
0
%
10
%
20
%
30
%
40
%
50
%
60
%
70
%
World
W
.
Europe
Japan
US
Source: ML & GS

CONFIDENTIAL

Future Revenue Drivers

Market inflection points drive new opportunities


New network / handset technologies


2.5
G
-

GPRS, EDGE and CDMA
1
XRTT


802.11
x


3
G


CDMA
2000
, W
-
CDMA


Java enabled handsets


Enabling New Services


Mobile access to business applications


Messaging


Gaming


Location Based Services


Video and imaging


Billing


CONFIDENTIAL

Models for the future?


Asia leads wireless data penetration.


Japan has by far the highest wireless data
penetration of subscriber base.


Japan:
69
% of cellular subscribers


NTT DoCoMo (I
-
Mode)


27.8
m


J
-
Phone (JSkyWeb)


8.5
m


KDDI (EZWeb)


8.6
m


Java handset users
75
% higher ARPU ($
32.5
)


Korea has more than
2.5
m wireless data
subscribers (
8
% penetration).



CONFIDENTIAL

Trends


Lots of Startups


4000
per year in Israel


Over
100
,
000
on a worldwide basis


Lots of Money and Investors


$
40
B rate/year in US alone


A lot of non
-
institutional money

CONFIDENTIAL

Extreme Competition


Need to assume there are many others like
you


Problem


you don’t even know who and
where


What to do?



CONFIDENTIAL

Critical Success Factors



Time to Market


Better to be quick to market with an OK product


Perfect Execution


Can’t afford trial and error


Partner with the Giants


Develop relationships with market leaders to rise above
the noise


Global from Day One


EC and Japan are not followers any more


CONFIDENTIAL

Time to Market


Time to money


Buy versus build


money can buy time


Manufacturing


Site building and E
-
Commerce backbone


Distribution and sales: OEM, Private Label


R&D


Operation


Parallel everything


Get customer involvement from day one


Other

CONFIDENTIAL

Perfect Execution


Need to hire experienced executives


Seek on
-
line coaching by experts


Get customers to design your service/product


Use professional assistance to maximize
efficiency


Lawyers


Head hunters, etc.


Have global help with local expertise



CONFIDENTIAL

Partnership with the Giants


Building brands becomes too expensive and risky


Develop relationships with entities who have the
connections/network


Formulate business models that win/win/win


How to work with:


LP’s that are giants


Bring in the giant investors


Management that “know the giants.”

CONFIDENTIAL

Global from Day One


Used to be


USA, ROW follow


Major trends:


GSM


Imode


EC Unification


How can a startup be global?

CONFIDENTIAL

Cellular market food chain


Network operators


Network Infrastructure vendors


Middleware vendors


Application vendors


Consumers

CONFIDENTIAL

Infrastructure Vendors



Infrastructure improvements


Antennas, base stations, indoor coverage


Smart components


Amplifiers, Modems


Security and Authentication


Interoperability between different wireless
standards



CONFIDENTIAL

Network Operators


Billing


mediation, content based


Network Management


Profile Management


Differentiated service/QoS


Application enabling platforms


CONFIDENTIAL

Middleware & Application
Vendors


Platforms:


Gaming


Messaging


Location


Voice recognition


Video and Imaging


Enterprise App Access


Billing





Applications:


Multi
-
user interactive


Teenage communities


Fleet management


Call center


Sports video clips


Field Workers


Mobile Commerce

CONFIDENTIAL

Killer applications beyond vanilla voice?


Voice is still an opportunity for cellular operators


New voice driven applications


Best interface for wireless applications


Cellular voice converts downtime into uptime


Car phones, hands
-
free etc


Voice recognition technologies maturing:



Semantic based Natural Speech Recognition overlays


Security


biometric identification / authentication


Voice enabled portals / call centers


SMS


has shown to be a killer app


What's next? Multimedia messaging? Unified
messaging?

CONFIDENTIAL

Wireless broadband data without
3
G?


Wide scale
3
G deployments not for many years.


Emerging med/high bandwidth wireless standards:


802.11
b


11
Mbs


802.11
a/g


54
Mbs


Bluetooth


short range up to
723
Kbs


22
m WLAN enabled devices by
2006
(
Forrester)


802.11
x / Wireless LAN


Mobile data hot
-
spots (airports, hotels, restaurants etc)


Enterprise networking


rich wireless functionality


Additional data business for cellular operators?

CONFIDENTIAL

JGV In The Wireless Arena

CONFIDENTIAL

JGV in the wireless arena:


Advanced

data
-
billing infrastructure
enabling operators
to offer
flexible pricing structures

for Internet content
and data services
.




Real
-
time telco
-
grade billing platform


Signed contract with NetCom (Norway) for full deployment


Late stage discussions with other European operators.


Platform enables service driven billing, first application:


Mi
-
800
-

Mobile
-
Internet subsidized
-
access service similar to the wire
-
line
1
-
800
/
0800
free
-
phone.


Strong management team led by Ofer Bengal, CEO
-

Founder of RIT
Technologies.


CONFIDENTIAL

JGV In The Wireless Arena

IP mediation
IP mediation
IP mediation
IP mediation
IP mediation
IP mediation
IP
IP
mediation systems
mediation systems
Comptel
HP
Xacct
Narus
Comptel
Comptel
HP
HP
Xacct
Xacct
Narus
Narus
Turn
-
key data
-
billing solutions
Turn
Turn
-
-
key data
key data
-
-
billing solutions
billing solutions
data
data
-
-
billing platforms
billing platforms
Ericsson
Comverse
Ericsson
Ericsson
Comverse
Comverse
Billing systems
Billing systems
(pre/post paid)
(pre/post paid)
Portal
Amdocs
Lucent (
Kenan
)
Sema
(LHS)
Logica
Portal
Portal
Amdocs
Amdocs
Lucent (
Lucent (
Kenan
Kenan
)
)
Sema
Sema
(LHS)
(LHS)
Logica
Logica
IP mediation
IP mediation
IP mediation
IP mediation
IP mediation
IP mediation
IP
IP
mediation systems
mediation systems
Comptel
HP
Xacct
Narus
Comptel
Comptel
HP
HP
Xacct
Xacct
Narus
Narus
IP
IP
mediation systems
mediation systems
Comptel
HP
Xacct
Narus
Comptel
Comptel
HP
HP
Xacct
Xacct
Narus
Narus
Turn
-
key data
-
billing solutions
Turn
Turn
-
-
key data
key data
-
-
billing solutions
billing solutions
data
data
-
-
billing platforms
billing platforms
Ericsson
Comverse
Ericsson
Ericsson
Comverse
Comverse
data
data
-
-
billing platforms
billing platforms
Ericsson
Comverse
Ericsson
Ericsson
Comverse
Comverse
Billing systems
Billing systems
(pre/post paid)
(pre/post paid)
Portal
Amdocs
Lucent (
Kenan
)
Sema
(LHS)
Logica
Portal
Portal
Amdocs
Amdocs
Lucent (
Lucent (
Kenan
Kenan
)
)
Sema
Sema
(LHS)
(LHS)
Logica
Logica
Billing systems
Billing systems
(pre/post paid)
(pre/post paid)
Portal
Amdocs
Lucent (
Kenan
)
Sema
(LHS)
Logica
Portal
Portal
Amdocs
Amdocs
Lucent (
Lucent (
Kenan
Kenan
)
)
Sema
Sema
(LHS)
(LHS)
Logica
Logica
Mobile Economy’s technology forms a
new a layer above existing IP Mediation
and Billing Systems

CONFIDENTIAL

Thank you


Contact Information:

Shlomo Kalish




Micah Avni

Phone: +
972
-
2
-
572
-
2222


Phone: +
972
-
2
-
572
-
2230

E
-
mail: skalish@jgv.com


e
-
mail: mavni@jgv.com