Tel Aviv, Israel
The head, and only, offices of ChatVibes, an Israeli start-up company, consists mainly of three desks, four laptops and a white board occupying a small, dark room in need of paint and a decorator in a small, nondescript building on Tel Aviv's Rothschild Boulevard.
"This is the biggest meeting we've ever had here," says Uri Schneider, the company's director of social media, as he squeezes in a handful of visiting journalists. Across the room Chief Executive Officer Gilad Carmi and Chief Technology Officer Justin Alexander wave a hello. The other employee, described as a "tech guy," is somewhere else, which is just as well as there isn't any obvious place for him to work.
When Tel Aviv residents call their hometown "the city that never sleeps," they mean drinking and dancing. But a new unit of Mayor Ron Huldai's office, Tel Aviv Global City, wants to add a new element to the city's nightlife -- start-up entrepreneurs working all hours writing business plans and computer code. The goal is to turn itself into the high tech center not just of Israel but all of Europe in 10 years' time.
And, as unlikely as it seems at first glance, ChatVibes is just the kind of business the city aspires to attract. Despite its modest offices, the company is an infant tech powerhouse. It was the first to develop a video chat add-on to Facebook and even though Facebook itself has since introduced its own video chat, ChatVibes is still going strong. Schneider says it's the second most popular Google Chrome extension and its Facebook page grew by 282,500 "likes" to pass 2 million last month.
The company is cash-flow positive and the founders' turned down an offer for a major investment because they wanted to keep their company in Tel Aviv. Elsewhere in the same building, another company called Faunus (four desks, five employees and two ceramic chickens by a coffee urn) is developing technology for the early detection of viruses in chickens. Upstairs, 6Scan (two desks, three employees and 2 ½ others in California) is conducting beta testing of anti-hacker technology designed to protect small websites.
"We moved here two months ago. We've been around since April and just closed an investments," says its 26-year-old CEO, Nitzan Miron, who acquired his tech skills serving in the army. "People who come out of military units are good hackers."
Israel established itself as a high technology center, popularly known as the "Start-up Nation," over the last two decades. As the country's business center and biggest metropolitan area, Tel Aviv is already home to most of the nation's start-ups. Rothschild Boulevard itself was home to LabPixies, the first Israel start-up to be acquired by Google. Last month, another Rothschild start-up, The Gift Project, was snapped up by E-Bay.
But the city has bigger plans -- to combine cool technology with coolness all around -- to attract hip, young entrepreneurs who live, work and party in Tel Aviv and make it a world-class city in the leagues of New York, London and Shanghai.
"What we realized was that Tel Aviv's relative advantage is in the fusion of technology and innovation," says Eitan Schwartz, describing the city's strategy. He has the tech-sounding title of director of international content for the Tel Aviv Global City initiative. "If we want to be a global leader in one sector, it's probably going to be that."
If the city's restaurants and clubs aren't enough to lure them, the municipality is embarking on plans to offer tax breaks for start-ups, free Wi-Fi in designated areas, hand-holding for new businesses and hosting conferences that bring the global industry's leaders to the city. Indeed, this week the city was holding a combination tech conference and festival, five days of spectacles, seminars and networking in the city's trendy Jaffa Quarter.
Another key element is lobbying the national government to create a special visa that would allow foreigner entrepreneurs to come to the city to start up companies. Indeed, spicing the Israeli tech scene is a critical element to the plan, a way of boosting the city's cosmopolitanism and injecting new talent, says Avner Warner, who is in charge of Global Tel Aviv's international economic development.
That last element is a tall order. Privately, officials told The Media Line that government officials are wary about letting in people who might take away jobs or compete for investment capital with locals. Warner adds that Israel's location in the Middle East could also deter Europeans and others from settling in Tel Aviv with iPads and marketing plans.
Days ago, rockets launched by Palestinian militants based in the Gaza Strip rained down on Israel's south, including the coastal cities of Ashdod and Ashkelon. On Wednesday, as Global Tel Aviv officials were detailing their plans, the headlines were talking about Israeli plans for a military strike on Iran.
"There are many barriers to overcome. We can't do anything about the security barriers, so we just have to ignore them," admits Warner. But, he adds, in terms of personal security, the city is safer than many urban areas in the U.S. and Europe. "The streets of New York are less safe than the streets of Tel Aviv."
He was speaking at a branch of the Tel Aviv municipal library house in the Shalom Meyer Tower at the bottom end of Rothschild Boulevard. A relic of the pre-Internet era, it is being given new life as a place for budding technology entrepreneurs to get started with the help of the city.
Books and magazines are still there, but a large new space will be ready next month for 28 people whose business plans are little more than an idea in their head. If they pass muster with an admissions committee, they get to use the facility for three or four months, giving them access to desk space, Internet, a conference room, networking events and, perhaps most important of all, a place to bounce ideas and worries with others.
"You'll have a peer group of people going through similar things, similar difficulties, like fundraising," says Warner.
The idea of keeping the city's high tech entrepreneurs close to each other extends beyond the walls of The Library, as the new space is called. Tel Aviv is focusing its high tech thrust on a small part of the city, starting at Rothschild Boulevard and spreading south to the Shalom Meyer Tower and Jaffa, an area dubbed the Tech Mile, although it is more like technology Square Mile. It is the oldest part of Tel Aviv, an area filled with 1930s-era Bauhaus apartments and older structures gradually being restored as well as steel-and-glass office towers.
One of the newest ventures to take advantage of the city's heightened interest in things digital is TechLoft, which opened in September as a place where entrepreneurs with start-up ideas in their heads can get started. There is room for 70 of them over two floors in an office building on the city's Nahmani Street.
For a fee amounting to just $250 a month, they get desk space as well as conference rooms, an "aquarium" for brainstorming and basic office services. Speaking from a deck designed for parties and other events just off one of TechLofts' two working areas, Gilad Tuffias, one of TechLofts' two founding partners, says they have held 10 networking events in the first two months.
The idea of creating a seedbed for entrepreneurs is nothing new in the U.S. but it is new to Israel and may have more relevance in a country where few people have a garage to house their start-ups or even a spare room at home.
"We understood the need for entrepreneurs starting the journey of turning an idea into a reality for a place they can work out of," says Tuffias. "Instead of being in a coffee shop or at home, they can work with other entrepreneurs."
TechLofts doesn't expect to earn a profit from providing office space and services, but it hopes to earn money from making micro-investments of $50,000 to $250,000 in the most promising of the start-ups that settle in at the facility. They will supplement their cash investment with sponsoring time in Silicon Valley for the entrepreneurs and introducing them to future investors.
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