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Milk, honey and high-tech
Posted By Abigail Klein Leichman On July 20, 2009 @ 5:31 am In | No Comments
Many talented individuals contributed to Israel’s emergence as a high-tech hub second only to Silicon Valley. But if you had to name names, Ed Mlavsky’s might top the list.Using an innate ability he describes as “instinct tinged with chutzpah,” the 80-year-old, London-born research scientist helped put Israeli high-tech on the world map.
Today, as chairman and founding partner of Gemini Israel Funds, the former chemist oversees investments in some 32 startups specializing in everything from green information technology to internet-based couture. Seventy percent of the limited partner investors are American; 30% are European.
“It doesn’t matter where they come from,” Mlavsky tells ISRAEL21c. “They’re all mini-globalists. The smell of money from France, Italy or Switzerland is difficult to distinguish from that of America.”
Pitch-forked into the Holy Land
Mlavsky moved from the UK to the US in 1956, with a background in growing silicon crystals – the building blocks of modern electronics. Working at semiconductor manufacturer Transitron, he quickly “acquired a certain facility for writing winning R&D proposals,” as he relates in his new autobiography Milk and Honey and High-Tech.
That winning knack brought him to the attention of Tyco – now a multinational conglomerate – where he made his mark as much for his chutzpah-based business deals as for his silicon-based solar technology innovations.
In 1977, Mlavsky was “pitch-forked into the Holy Land,” as he puts it, for a two-year stint on the US-Israel Advisory Council.
But he and his wife Sally, and their three teenagers ended up staying, as Mlavsky was tapped for the executive directorship of the newly established Israel-US Binational Industrial Research and Development Foundation (BIRD) in 1979.
In those pre venture capital days, BIRD was a primary source of funding for the R&D projects of Israeli tech companies and a channel through which they could penetrate the US market.
Low-tech efforts led to high-tech sales
Since it was also pre Google back then, Mlavsky acted as “a human search engine,” combing printed directories to find appropriate foreign target companies to match with Israeli start-ups.
Thanks to his low-tech efforts, overseas firms were soon buying Israeli high-tech products, establishing R&D facilities in Israel and even purchasing Israeli businesses.
By the time Mlavsky stepped down from BIRD in 1992, the foundation had invested $92 million in more than 320 projects that generated more than $3 billion in sales. It continues to foster relationships in the high-tech sector.
Before long, Mlavsky was offered the directorship of a VC being formed by an Israeli holding company, a Boston-based international private equity company and an Israeli government entity. It was Sally who came up with the name: Gemini Israel Funds.
Gemini served as a model for Israeli VCs to come, though the worldwide economic slump has thinned their ranks. Mlavsky sees this as a positive development; fewer VCs lead to more serious applicants.
“We’re getting many less frivolous or ill-thought-out propositions nowadays, because people with a half-assed idea know they’re not going to get funded,” he says.
A country of problem-solvers
Because of the tiny domestic market, Gemini-backed companies must do business overseas – mainly in the US and increasingly in the Far East – in order to survive. Mlavsky says that political and economic conditions have not lessened foreign corporations’ interest in establishing subsidiaries in Israel.
“The quality of people here is quite remarkable,” he says as he glances out his window overlooking Israel’s Microsoft headquarters in Herzliya Pituach.
“The whole culture, which I admire but really don’t understand even after 30 years, is comprised of problem-solvers. These bloody Israelis just don’t give up.”
That dogged approach, he believes, stems from the country’s constant fight for survival. “As long as we remain under threat, the best people are going into the military and getting projects and responsibilities way beyond what young men and women of the same age are confronted with anywhere else in the world,” says Mlavsky.
The military culture also forges loyal personal relationships that carry over to business, he believes. “In some of our companies, all the people came from the same unit in the army. When you put together a team here, they have a long-standing, trusting relationship and an understanding of how each one works. That translates into an extremely low turnover rate in high-tech here. It’s not that we’re more intelligent, but more effective per capita,” he says.
A former national master bridge player, Mlavsky is an avid reader and tennis player who enjoys sharing his business expertise with university students and new entrepreneurs. “When I say ‘Call me,’ I mean it,” he says.
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