Last week was the Marker‘s Internet event, and although I wasn’t there (Guy wrote about it in my blog), I did hear a lot about it from my partners and from other friends. The feedback was strong and clear – we are in a bubble. There are too many entrepreneurs, too much money, too much investor interest and too many me-too ideas.
I thought about it a lot, trying to reflect the message from Israel to the overall atmosphere in the valley. In Silicon Valley a lot of people are talking about the increased valuation and the huge increase in Internet companies. However, greed is still beating the fear. I guess there is a clear reason for this. For many of the US VCs, Internet investing is something they have been doing for many years having experienced big wins in parallel to some losses. The current inflation is something they are aware of, but they have the confidence to continue doing Internet deals and to make money on them.
For the Israeli general partners its very different. Most of them made little money in Bubble 1.0, and are extremely worried to invest now and get hurt again in Bubble 2.0. Very few Internet companies made money in Israel, and that has a huge impact on the fear level.For the future of this industry in Israel – we have to see companies making money in this round. Metcafe, Fixya, Pando and Yedda are examples of interesting companies with real traction. Hopefully they will be winners, and will create more confidence in Israeli Internet investing.