Tech Trends, Market Trends

The OurCrowd event in Israel gives us some ideas of where we might be going

It was good to be back in person at OurCrowd’s global investor conference in Jerusalem this week. The last one was three years ago, and following the pandemic and a major financial correction, we are in a very different world and the event reflected that. Over the span of a few days we got to drink from a firehose in terms of opinions and thoughts as to where we are headed when it comes to tech and finance. At the same time you are getting pitched non-stop by entrepreneurs who are all quite aware that investors from all over the world made the hike to the heart of the Middle East to source new deals. And one of OurCrowd’s flagship companies, Vancouver-based Sanotize used the conference’s audience to run an actual patient trial. So what stood out, any recurring themes or highlights? Let’s see:

Buzzwording - Lover or hate it, tech is about buzzwords. And it was very hard to find during this conference any reference to blockchain or crypto. It was as if these phenomena had never happened or even existed, not a peep. No, ChatGPT was the new thing, but when a speaker challenged the audience by asking what GPT stands for, only one person stood up to answer and he actually got it wrong. Seriously, this was probably one of the most savvy crowds on the planet, but no one was apparently able to answer the question with “Generative Pre-training Transformer”.

Investors - The markets have changed and it is clear that valuations are now under pressure across the board. Shlomo Dovrat from Viola Ventures bluntly stated that SAFEs and Convertible loans are history and no one should really be using these instruments any longer. Investors now set the terms. He added - and thereby challenging my often repeated assertion to founders - that the billions of ‘dry capital’ waiting to be deployed is a myth. With the rapid change in the interest rate environment and other investment alternatives opening up, there are lots of venture capital pools that are or will be liquidated with funds being returned to LPs. And judging from the news over the past few weeks these higher rates may be here to stay for a while.

Consumer has Plateau-ed - Dovrat also pointed out that the wave of innovation and growth spawned by social, cloud and mobile has run its course in the sense that the spectacular growth curve we have seen between 2007 and now is starting to flatten. Consumer tech is a key example, there is just too much on offer, the cost to acquire new customers is too high and there is very little new under the horizon. So if you get a call from a consumer-focused start-up that is raising using a SAFE, you may want to reflect on that carefully.

AI - Yes, ‘artificial intelligence’ has been one of the key themes moving tech for a while now, but it is becoming much clearer how it will now disrupt every single sector that we know of, displace large chunks of the white collar work force (note: social crisis coming) and create the next tech behemoths whose names we do not even know today. But the possibilities with massive data sets are endless and therefore this is the place where investors should be spending their time. When it comes to AI, we are in 2007.

Save the Planet - So apart from AI, the conference focused clearly in on its actual theme which was ‘save the planet’. From a cool drone reforestation start-up to solar panels to a start-up producing real milk without using a single cow, the message was clear. We have the ability and an abundance of tech to create a sustainable way of living on the planet. When the current political situation in Israel itself came up, OurCrowd’s founder, Jon Medved, retorted quickly by saying that innovation is actually way more important than politics. Let’s save our place to live first, the rest will follow.

Peace in the Middle East - The OurCrowd team was one of the frontrunners to capitalize on the Abraham Accords, the peace agreements between Israel on the one hand and the United Arab Emirates, Bahrain, and later Morocco and Sudan on the other. Never ever before have business representatives from these nations come to Jerusalem. You could feel the emotion of witnessing history when Arabs and Israelis shook hands and hugged on stage. The wish what should be next was clear: Israeli and Arab founders working together building great start-ups. I have long argued the Middle East is the next place to be for investment and growth and you could see it happen right at this conference.

Alternative Investments - Look, if you do not like venture debt, equity, start-ups, whatever, there are huge returns in other areas, such as entertainment. That is, if you have the right content, the best screenwriters and of course, the hottest actors. Here too, the conference delivered by having Israel’s greatest star, Lior Raz aka ‘Doron’ from the Netflix smash hit Fauda on stage with his show’s co-creator and writer, Avi Issacharoff. When the latter was asked why their effort had been such a global success he pointed at the bald guy sitting next to him and said “because of him”. Probably, yes. But the script is truly something else and that is what’s been driving it. If you haven’t seen it, go for it now, all four seasons.

Conferences like this always inspire and actually should take a bit longer in order to digest everything and have longer conversations. But business moves fast and all participants moved on, much like tech and investment itself, to the next thing.