Today Yossi Vardi, the renowned Israeli VC who backed many well known companies, including ICQ, came to visit me at FON. Yossi is intelligent, creative, funny and has a natural understanding of the Internet.

One way to get to know Yossi is through his portfolio. Here´s a list of the companies he´s invested with and they include Ilcu, Foxytunes, Gteko, recently sold to Microsoft, Fixya, a very clever customer support web 2.0 site, AtlasCT, a competitor to Google Maps, and Fring, competitor to Gizmo Project or Truphone.

But while knowing Yossi through his companies, present and past yields a good understanding of his personality, everyone tells me that the best way to get to know him is attending Kinnernet, which I plan to do next March. A quick look at flickr pictures tagged Kinnernet told a wild story. Yossi Vardi was in Spain attending a Bankinter conference on innovation that suprisingly it is barely known in Spain.

As he was leaving my office very impressed with FON, he asked me why did I think that there were not many other FON like companies in Spain. My answer? Because they threw us Jews out of Spain in 1492. His reply? Maybe that explains why Israel invested $1.4bn in new start ups in 2005 and Spain $100M.

Indeed, while I think there´s more and more creativity in technology in Spain it is still incredible that a country with 8 times more people should have less than 8% of the total investment of VCs in Israel.

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GILLES on December 2, 2006  · 

Martin Very interesting.subject
A little frustrated not to see it more developed.
Why the entrepreneurship and investment are so vibrating in Israel compared with the European countries? I think Isreal is part of the movement of emerging countries with the large number of Russian who emigrate in the country. .

Last month, Michael Moritz from sequoia Capital came to Bangalore to announce the launching of Sequoia India after the acquisition of funds of West Bridge Capital ( a small local venture capital firm).
We briefly discussed, and he said, unlike other funds, Sequoia is not at all present in Europe. No office neither funds in UK, in Germany… In Asia no office nor funds in Japan or in Korea. They are present only in three countries: China, Israel, and now India!
The judgement of sequoia is important: as you know around 10% of the value of NASDAQ is made up of firms funded by Sequoia.

Some vc recognized very early that Indians Chinese and the Russians were associated considerably with the creation of value in the United States in general and in the Silicon Valley particularly.
I currently advise in India a venture capital firm, and I am surprised every day by the quality of the businesses of technologies and the projects. The country still misses experienced global managers, but this is rapidly changing.
Many Chinese and Indians return in their country. And also more and more skilled foreigners are also attracted by the possibilities of these countries

Back to the question of Martin, why Israel attracts so much the investors especially in the field of high technologies?
My answer, is that many Russian scientists and engineer did not find in the ex Soviet Union the conditions of expression of their talent. They emigrated either in Israel or in the United States, and they some brilliant investors were at the rendezvous to fund them.
The investors who anticipate this trend deserve my admiration for their courage, their vision. Today still the migratory movement occur but in the two directions, from the emergent countries towards the United States, or from Russia to Israel.
Which country attract them, Spain?, France? Germany ?

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Jaco on December 2, 2006  · 


As someone who lived in Israel for 10 years, studying and working in Hi-Tech, I can assure you that most of the talent are Sabras, Israeli born, and not Russian immigrants.


I like an admire lot your blog style, open, sincere, smart and courageous. Besides, you write about everything. Since you compare a lot between Europe and USA, and in this post you are writing about Jews coming back to Spain, let me add a difference between Europe and USA that you have not commented yet…, Europe are less Jew tolerant than USA…, any comments on this?.

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torquemada on December 2, 2006  · 


I believe Jews being spelled is only another consequence of a totalitarian catholic church that convinced spaniards that no matter what they did in life, they would only reach heaven or hell according to their acceptance of the Vaticans rules.

That is no doubt the actual reason why entrepreneurship is not among our values. Check most other european countries above pyrenees and alps; not surprisingly their entrepreneurship ratios are better that ours.

But hopefully that has just started changing…

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XL on December 3, 2006  · 

Torquemada, the expulsion of jews in Spain wasn’t a decission taken by priest, it was taken by politicians.

The major reason was that many people didn’t trust in jews, because they were different.

And some clever people, tougth that the expulsion will be a great oportunity to be rich, they will not pay his debts, they will steal his propierties, the cities will grow taking the space of the ghetos…

The major problem of Spain was the 3 centuries as a metropoli, where we learn to don’t work and to live on rents.

During this time the spanish mentality despised the people who works to obtain a gain…
Also the people who had money invested into Goverment bonus, instead in develop a comerce, or an industry, it was more honorable…
That’s the reason of some actual problems in Spain.

USA is one of the largest catholics countries in the world, and they don’t haven’t this problem…

Holland is a catholic country, and it’s one of the most advanced in technology in the world…

So don’t search the easy solution to said it was the catholic church, not the spanish mentality, because this is an excuse to don’t assume our responsability…

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torquemada on December 3, 2006  · 

XL, I can’t believe my eyes:
Have you ever heard of the division between church&State, reached in Spain only 28 years ago, in USA in 1776, France in 1789, and Holland in 1815??

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Torquemada on December 3, 2006  · 

USA actually religion and goverment is quite the same.
What about creationism…

Please study more about the spanish history specially the constitutional history, where you will learn that Spain didn’t split religion and goverment 28 years ago, In fact we did it beafore France and Holland in 1812 (first time)

In France the Revoultion started in 1789 but until 1793 they didn’t change the rigths of the church

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XL on December 3, 2006  · 

Also Torquemada, I know in Barcelona 3 small microcredits programs to help unemploye to create his own start up, and all of them depends of the Catholic church. And I can told you that I’m sure that more than new 50.000 start ups per year are created thanks to Catholic church…

So I don’t think that Spain is subdeveloped in start ups terms as consequence of be Catholic.

Look, Switzerland (Catholic cantons), look USA…
Also I think that Basque, Cathalan, Valencian regions are more open mind to start ups.

But I repeat isn’t true that last year in Spain we only invest 100 millions in start ups

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"Yosser Hughes" on December 3, 2006  · 

I am slightly saddened to read of you doing the “jew bonding” thing especially as 1492 was a long time ago

I’ll allow it just this time as Yossi is such a gregerious character than he almost compels you to want to bond with him.
(and because I benefit so much from reading you blog: half baked posts and all)

As you know though Jews have long recovered from what happened to them 500 years ago.
Indeed if you read the islamic bulletin boards, you could start to believe that Spain is overrun with wealthy and powerful Jews!

Google “EL PODER DEL PUEBLO ELEGIDO” EN ESPAÑA” … you even get a mention yourself!

Admittedly this is a reactionary piece and almost certainly not 100 accurate.

And even if there is a point somewhere, its a long way from Jordi Cruyff to The Protocols of the Elders of Zion

Two final points:

– The CIA says that only 76.4% of is Jewish, so that $1.4bn figures comes down slightly

– Spain had two people in Red Herrings “20 Outstanding Entrepreneurs Under 35”.
Israel had zero.

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actual torquemada on December 4, 2006  · 

sorry XL, I didn’t understand before that you are a comediant. You are absolutely hilarious.

By the way, I didn’t write the last comment signed as Torquemada.

Martin, wake up, if your cash burn rate is too large, present your business plan to the Catholic Church, the biggest VC in Spain!!

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Patrick on December 6, 2006  · 

Well, this is a oversimplification although there is fire behind all this smoke.

In the catholic religion MONEY=EVIL. In Protestant and Jewish MONEY=BUSINESS/COMMERCE. Historicaly in Europe Catholics have owned the land and lived off it and the serfs while other minorities traded and travelled for new goods ideas. This generated a natural ability to innovate in order to survive and also internal community (financial) support like you also see in India and also in the Mafia.

At the end of the day it’s simple Darwinism with values that today’s measures of success and economic value creation.

I’m agnostic but believe in cultures.

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