DECEMBER 2020
A HISTORICAL YEAR IN RETROSPECT
48 Digital Health Saving Lives with the Implementation of Digital Tools
20 Summing Up an Extraordinary
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Barcelona Innovating on the Mediterranean Shore
Editor’s PICK
Tal Berman Managing Partner, Rinnovation Group Welcome to another issue of Innovation Sage.
INNOVATION SAGE
As we finish the year of 2020 strongly, one might reflect on everything we’ve all been through this past year. This year will go into the history books. Although we are still unsure what kind of impact it will have over our lives moving forward, one thing is certain: the year 2021 is and will remain an enigma for quite some time. Will it resemble 2019? Are we living in a brand new world? Will it be somewhere in the middle? To be honest, none of us owns a crystal ball. Certainly though, we are all aware that things are changing at a fast pace, and that COVID-19 has been a catalyst, just like we have been discussing in our recent issues, for that change.
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We have done our best in this issue to sum up the last year, which as previously mentioned, is one for the history books. It was truly challenging to look at this year and talk about it while some of us are still licking our wounds from its implications. So many things have been said about the year of 2020, and nevertheless, we took the liberty to try to analyze it retrospectively. Most importantly, we picked three startups which shined in three different categories. Gong.io has been nominated by us as the startup of the year, SeeTree has been nominated as the AgriTech startup of the year, and last but not least Papaya Global has won our award for the breakthrough startup of the year.
Moreover, we kept discussing the 4.0 revolution, and this time we touched base with the healthcare industry. We have discussed the up and rising vertical of digital health — a vertical that we all realized its usefulness under the limitations of the COVID-19 crisis this past year. Other than assisting with dealing with the pandemic, this vertical has made the biggest impact. Startups in this emerging vertical are helping and saving lives with every new technological innovation. To simplify it, it is all about assisting caretakers with keeping their sanity and maintaining their own heath while they fiercely fight for our lives nowadays. Lastly, we talked about one of the biggest technological startup hubs in Europe: Barcelona. This hub has grown substantially in recent years, establishing itself as one of the main focal points for innovation in the old continent. We truly hope you enjoy this issue and gladly take any comments or requests. Please direct them to:
tal@rinnovation.xyz
ASSOCIATE Editor’s PICK
Eran Shlingbaum Partner, Rinnovation Group Other than food or utilities, health services are probably the most sustainable commodities out there. Like many other industries alas at a slower pace, this industry has been going through a huge change in the past years. This change has been accelerated due to the COVID-19 pandemic. The idea that we can also see our doctor remotely and not only face to face was considered science fiction a decade ago, or even irrational a year ago. What used to be merely a concept, which only tested as a beta within few health providers, today has become a standard. Digital Health influences customer experience, whether it is visible to everyone or not. Some digital health tools, patients have been experiencing lately, are through telemedicine and remote tests, like pregnancy tests. For some other digital health tools, patients may not even realize they are using them daily. Medical devices are being revolutionized as well, from an ability to transmit data to the cloud all the way to analyzing that data with the assistance of AI features. More importantly the ability to collect and analyze clinical data in a short period of time is quite transformational. Medical staff and researchers who used to spend thousands of hours manually collecting data themselves can now focus on analyzing it instead. What used to be huge hardcopy files carried around the hospital’s long halls are now a distant memory. Think about the hours and energy saved thanks to these new technological tools.
Bottom line, this new concept of data collected from the patient, which is then directly sent to the cloud thus creating a huge database, is quite amazing. Moreover, another impact of this concept is the shorter time patients spend in hospitals nowadays as the cycle, i.e. the time of the examination to the point when the results are analyzed by the doctors and other medical staff, is substantially shorter. Another thing we still need to discuss though is the end user, i.e., the patient in the modern healthcare industry. Medical institutions have become more and more customer-centric in recent years — a revolution in itself — and keep investing huge amounts in R&D and new digital developments to create a better customer experience for these patients. Chief Digital Officers (CDOs) are becoming critical to healthcare services and have taken on an essential role to realize these strategies. Unlike pure commercial industries, the health system still lacks enough resources. Investing in digital assets assists with optimizing these low amounts of resources and uses them to deliver better user experience for its customers. Although it got a lot better in recent years, still the level of service patients should receive needs to improve. It will be very interesting to cover the subject three years from now and see what other innovative services become the norm other than those which have already been implemented.
Innovation Sage’s Pick for AgriTech Startup of the Year 2020: SeeTree Rising to the Occasion. Summing Up the Year 2020 in the AgriTech Vertical
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The Year of New Opportunities - Summing up 2020
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Innovation Sage’s Pick for Breakthrough Startup of the Year 2020: Papaya Global
Innovation Sage’s Pick for Startup of the Year 2020: Gong.io
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Creating a Better Future for Mankind via the Use of Digital Technologies in Healthcare and Medicine
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“We are Here to Save Lives” – A Story of an Israeli Startup Creating a Better World through the Digital Health Domain
A Year of Change Surely. But Is It for the Better or Worse?
Digitalizing Healthcare or Providing Health Operators Digital Tools?
38 Winds of Change - 2020 FinTech Wrap-up
Entrepreneurship Through the Pandemic Perspective
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Is the Rise of Online Usage as a Result of COVID-19 Here to Stay, or Is It Just a Passing Trend? Future Trends that Will Shape the Future of the Digital Health Vertical
Barcelona – Great Food, Great Sports, and a Great Place to Innovate
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CONTENTS
INNOVATION SAGE
AGRITECH 6
CORNER
Innovation Sage’s Pick for
AgriTech Startup of the Year 2020: SeeTree
An Interview with
Guy Morgenstern
INNOVATION SAGE
Co-Founder & CTO at SeeTree
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his year established a real change in the agriculture industry. On one hand, we witnessed the perception change of the public on the importance of this industry, and on the other, it looks as if the 4.0 revolution has finally reached that vertical as well.
Being one of the companies which helped establish the ability of farmers to use data for better decision making along with amazing capability of scaling-up made SeeTree shine among the rest of the AgriTech startups. Investors seem to agree as lately the company raise its Series B
funding round of $30 million. Innovation Sage told the story of this startup back in our August issue when we interviewed Israel Talpaz, its founder and CEO. This time we sat with its other founder and CTO, Guy Morgenstern, to talk about this last year and the way ahead for our pick for AgriTech startup of the year 2020.
Hi Guy, great having you. So, how do you feel about our pick? Great to be here. It really feels great to be appreciated like that. It really reassures when people notice our valuable work. We travel around the world, and it is quite exciting when you meet with growers or agricultural corporations who already know us even though they are not our customers or ever used our product. Astonishing.
“When you analyze data from tens of millions of fruit trees, you gather huge insights in the process, which is scientifically speaking unprecedented.” Looks like this has been a great year for you guys. Can you sum it up? Our growth this year was indeed quite significant especially in regard to our ability to market our product and operate in vast areas. We penetrated the Brazilian market where we started working with huge clients. We learned quite a few things
about our customers’ needs, especially large customers. It is not only that the area is different and a lot bigger to handle but also the size of the data we needed to analyze. We improved our operations, which definitely helped us serve other clients we could not in the past. We serve large customers in California, South Africa, Chile, and many other prime locations. Most importantly, we have collected huge data on trees. When you analyze data from tens of millions of fruit trees, you gather huge insights in the process, which is scientifically speaking unprecedented. And you need to remember that this was all achieved in face of the COVID-19 crisis, so we are also very proud of the fact that despite the challenges, we were able to serve our customers to the best of our abilities.
Let’s talk about those COVID-19 challenges if you don’t mind. I will start by saying that our clients need us more and more in these times of COVID-19. The need for a product such as ours was emphasized because of the pandemic crisis. Our ability to analyze any tree within millions in each farm was substantial in times where mobility is limited. Therefore, thanks to our product, our customers were able to persevere and live up to the pandemic’s business challenges. One must remember that even in the midst of one of the greatest difficulties our world has faced in recent years, agriculture was needed greatly, and it had to maintain a similar production pace — some will argue even at a higher pace. Honestly, agriculture was less impacted by the pandemic, whereas other industries such as tourism and
such have been banged up. So, to sum up, COVID-19 has assisted us actually. Although I have talked about the positive impact of the pandemic, I cannot neglect mentioning the negatives. Operationally we had to make lots of adaptations to the known limitations like social distancing or quarantines. Obviously, we couldn’t have all our employees in the office at the same time. But management and the rest of the workforce understood the situation and did their best to overcome all obstacles. It was not easy, but we managed to succeed regardless.
“take a car manufacturing site as an example that is used to manufacture 1,000 cars per month and suddenly is asked in 2-3 months’ time to increase its capacity to 100,000 cars per month. We were actually able to increase our operations and reach such a milestone.”
INNOVATION SAGE
COVID-19 aside, SeeTree grew substantially this year. What challenges did the company face during this growth and what challenges did you face personally?
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We are all much used to transforming situations. For instance, none of us panicked when COVID-19 started, so mentally speaking, we are a very strong
company. Also, when looking at our skillset, we have lots of experienced people working here, therefore you could sense much agility and flexibility this past year top-down. Both of these aspects assisted greatly with the rollercoaster like year this company had. I mean think about it: take a car manufacturing site as an example that is used to manufacture 1,000 cars per month and suddenly is asked in 2-3 months’ time to increase its capacity to 100,000 cars per month. We were actually able to increase our operations and reach such a milestone. It was indeed quite challenging, and all of us had to work overtime to succeed. We had to invest a lot in development on the go, which is never easy. I credit that entirely to our team, who enabled us to focus on our next goals. As for me, in the past I worked in companies who faced the same challenges and situations, so it was not new by all means. I must emphasize that I love it, and I enjoyed every minute. The ability to navigate the ship in such a storm and also to see my colleagues giving it all themselves was very emotional and exciting. After we saw that we were able to scale up and managed to analyze so many trees, just watching these great reports flowing truly gave us the chills. If I had to, I would do that over and over again.
“We brought in bigger clients with much bigger needs, we had many funding rounds, and of course, we had to face the new reality of COVID-19.”
Objectively and subjectively to what do you credit SeeTree’s success? Let me start by telling you that we are still not completely content with our results yet. We are still a startup. Although many things worked out in our favor lately, we do want to improve some areas and keep pushing forward towards more achievements. Like I previously mentioned, I think it is all because of the great people who are working here from top to bottom. We all maintained our composure as we have many years of experience among us, and we know how to be resilient in the face of adversities. Think about what we went through lately. We brought in bigger clients with much bigger needs, we had many funding rounds, and of course, we had to face the new reality of COVID-19. Our biggest advantage is our ability across all levels to make the right decisions in these stressful times. Our CEO, Israel, is a very level-headed person, and that percolates all the way down.
“I do find agriculture very exciting, things like the connection to the land per se.” Looking at your company in specifics and at the Israeli AgriTech as a whole, you see entrepreneurs who are older than in other verticals. Does this play into effect when thinking about what you have just said? Agriculture is a very mature industry,
whereas other industries like advertising, tourism, or sports for example, are still quite young. Moreover, agriculture has yet to go through the information revolution, which these industries have obviously gone through years ago. That in itself entails a different kind of discourse. Moreover, these industries have a younger audience with different stimuli. Agriculture has its own pace and traditions, like family, land, etc. There are many advantages to that by the way, like for example, patience. Farmers have lots of patience and therefore different expectations. However, do not get me wrong. Unlike the general opinion, I do find agriculture very exciting, things like the connection to the land per se. Look, when I need to make an image video for my startup, I most probably have to work ten times harder than those cybersecurity startup companies just to show how great it is to assist fruit farmers. That in a nutshell is exactly why you need to be more mature working in this vertical. For youngsters who are coming from fully digital backgrounds, it will almost be impossible.
“The fact that agriculture is significantly less digitalized than other industries makes our customers hungry for a change.” Under the uncertainty of circumstances how do SeeTree plans for 2021? Currently, we are involved in many pilots — some are unpaid by the way. At any moment we can convert these unpaid
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pilots to paid customers. We are not too concerned as we have already built the foundations to handle the current situation. Any successful pilot makes us even more optimistic. The fact that agriculture is significantly less digitalized than other industries makes our customers hungry for a change. They really want to revolutionize the way they work. Many times we meet customers who have spent the past two or three years searching for a solution such as ours, especially the big ones. They understand that they need to make data driven decisions. They face huge problems of disease, pests, huge areas to manage, etc. Therefore, you may understand that the need is out there. They are totally ready and committed to try our product. Despite all uncertainties and crises, the future is bright for us. One more thing I would like to mention again is that the agricultural areas were less affected by the pandemic than the urban areas. So, again one needs to reflect between the impact of the pandemic on various industries and its impact on agriculture.
“We are in the front with state of the art technology and equipment, which in return enables us to input the best data.� How does SeeTree maintain its competitive edge moving forward? SeeTree will spend and invest further on R&D. We constantly recruit more developers, engineers, product people, and data scientists for that. Our mentality is to push forward. We will also invest in better equipment, be it better filming equipment or better flight equipment. One of our main advantages in the eyes of our customers is the fact that we are in the front with state of the art technology and equipment, which in return enables us to input the best data. Data is our biggest asset thus far. Anyone who would like one day to compete with us will have to collect the amounts of data we have already, which
is close to half a billion trees. That is again unprecedented in the way we reached this milestone. Fact of the matter is that no company out there today has so much data at the lone tree level in all parameters, and we are constantly applying more methods of mining more data in a way which makes catching us almost impossible. So, our unique data gives us a buffer, which gets bigger and bigger.
“We have developed capabilities to build upon the similar traits between different crops.” So, what is next for you guys? We started in citrus, and we are expanding in that family of trees all the time. We receive offers constantly to penetrate new crops and fruits. The good thing is that we have developed capabilities to build upon the similar traits between different crops. For instance, there are similar diseases for all types of trees in the same geographical area. So, whatever we decide to do next, we are quite comfortable to enter any new market. We just need to look at what trees are most similar in the parameters to the trees we have already analyzed. I can say that we are looking next at the deciduous family of trees.
“We want to become the standard for mining and analyzing data in the field of fruit trees.” Where do we expect to see SeeTree in five years? We want to become the standard for mining and analyzing data in the field of fruit trees. We aim to assist farmers with increasing their yields and ROIs. We want to make an impact in an almost scientific level in all areas we work on, like risk management, containing diseases, and more.
Finally, what do you wish for yourself with the new year ahead? We sure hope we will reach our milestones and achieve all our goals.
No doubt you will. Congratulations! Much appreciated. Thank you so much.
Rising to the Occasion.
INNOVATION SAGE
Summing Up the Year 2020 in the AgriTech Vertical
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Author: Tal Berman
Author: Sharon Vanek
Contributor: Mark S. Brooks
Investment Manager at Syngenta Group Ventures
Contributor: Adam Bergman
Managing Director at EcoTech Capital
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INNOVATION SAGE
his year was quite interesting for anyone involved in agriculture. The industry’s necessity was undeniable and looks like farmers have finally received the credit they deserved. Moreover, there was an increased demand for agricultural products due to the increased food consumption caused by the lockdowns and quarantines. This increase in demand in return made farmers look for solutions which may help them either increase production, reduce costs and waste of resources, or perhaps even all of them combined, thus finally bringing the 4.0 revolution to agriculture. “Resilience,” Mark Brooks, an investment manager at Syngenta Group Ventures, tells us proudly. “In the face of unprecedented changes and dynamics, the agriculture and food supply chains readily adapted to shifted demand dynamics. I find that comforting and a resounding example of resilience.”
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that it was a bad year overall. Just like the struggles we have all faced, even with an increased demand for their products, AgriTech startups struggled no less than the rest of us. “2020 started out with a lot of optimism coming off a record fundraising year in 2019. Additionally, we were seeing more companies beginning to generate commercial revenue. Much of this momentum came to an abrupt halt as the pandemic took hold. 2020 will be considered a lost year for many AgriTech companies, particularly those early in growth stage firms, which expected strong revenue growth, but instead experienced zero or negative growth,” Adam Bergman, a long term AgriTech investor and expert, paints a dark picture, but still remains optimistic for a bright future to come. “However, there seems to be a positive trend emerging as we approach 2021, and many companies look better positioned for strong growth this coming year, even as COVID-19 is likely to remain an issue for at least its first half.”
“There seems to be a positive trend emerging as we approach 2021, and many companies look better positioned for strong growth this coming year, even as COVID-19 is likely to remain an issue for at least its first half.”
“2020 has exacerbated pain points with labor and supply chain inefficiencies. It’s also been a great accelerator for ‘last mile’ innovations, like touchless meal delivery.”
This was the year where the AgriTech vertical thrived, and many of the startups within that domain saw a huge increase in the demand for implementing their products on a much bigger scale. Nevertheless, there is no denying
Let’s talk about the COVID-19 crisis. Although we hear throughout this Innovation Sage issue about it being a catalyst for innovation, our logical introduction has also suggested that, was it really? “Yes and no,” Mark says, and we can only imagine him scratching the top of his
head. “No, in the sense that 2020 has been harder than ever for entrepreneurs to build new relationships with customers to test or scale their ideas. Yes, in the sense that 2020 has exacerbated pain points with labor and supply chain inefficiencies. It’s also been a great accelerator for ‘last mile’ innovations, like touchless meal delivery.” Adam sees it completely different. “With many challenges occurring throughout the food and agriculture value chain, particularly with shelter-in-place orders during the beginning of the pandemic, we have seen a growing interest in indoor farming and digitalization of farm data.” Now, we would like to discuss the trends, which shaped this historical year. “One year hardly makes a trend,” Mark cools off the enthusiasm. “And what trends may have existed before 2020 are either broken or recalibrated. Nevertheless, I would say that 2020 has highlighted the need for a more connected agriculture and food supply chain, such as: demand forecasting, logistics, etc.” Adam seems to agree to the notion that we are playing in an entirely new ballpark. “With the need for social distancing, we have seen an increasing interest in automation and robotics. The specialty produce sector suffered similar issues as outbreaks occurred within their workforce during the harvest, forcing some growers to abandon and leave their produce to die in the field. This has led to a renewed focus on reducing food waste, which occurs at every stage of the supply chain. 2020 saw the emergence of companies focused on extending the food’s shelf life and finding ways to use typically unused or surplus foods.”
“COVID-19 seems to have had a positive impact in terms of interest in the AgriTech sector. Despite the many challenges, startup companies in agriculture are on track to raise more funds in 2020 than they did in 2019.” With that said, we can only imagine AgriTech investors changing their investments preferences and policies. “Our views are always evolving,” Mark tells us as he disagrees with our assessment. “While I cannot speak for the entire VC ecosystem, my views have not materially changed. I still believe AgriTech’s best days lie ahead.” But as we previously said, the AgriTech vertical has been taking much attention during these troubled times. “COVID-19 seems to have had a positive impact in terms of interest in the AgriTech sector. Despite the many challenges, startup companies in agriculture are on track to raise more funds in 2020 than they did in 2019,” Adam concurs with our statement and adds even more. “That being said, we have seen the emergence of a two-tiered financing market, where a few more established and well-known companies (Apeel Sciences, AppHarvest, Benson Hill Bio, Farmers Business Network, Impossible Foods, Indigo Ag, Memphis Meats, Oatly, Perfect Day, Pivot Bio, and Plenty) have raised large sums of money at high valuations, whereas many earlier stage companies have struggled to close financing rounds. We are also seeing an increasing number of investors drawn
INNOVATION SAGE
to this sector by the significant growth potential and the opportunity for a positive environmental impact in a sector that is believed to account for upwards of 20% of greenhouse gas emissions globally.”
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We hear that the focus is shifting more and more toward the later stages of the agricultural process, i.e. mainly postharvest, but what kind of sub-verticals within AgriTech have been drawing quite an attention as well? “Indoor farming generated increasing levels of customer and investor interest, starting with the launch by Gotham Greens of its third new indoor farm in less than six months, followed by AppHarvest’s public listing, and the Plenty and Driscoll’s joint development agreement for indoor-grown strawberries,” says Adam as he mentions a few interesting attention drawers. But, if we look additionally at geography, where is the scouting focus for novel ideas and
innovation. “The US continues to be the leading location for AgriTech innovation, with the Bay Area, Boston, New York, Research Triangle Park in North Carolina and St. Louis, Missouri as the key centers for innovation,” Adam talks about his domestics but then shifts his attention toward a more global perspective. “Innovation is increasingly coming out of Australia, Canada, Ireland, Israel, New Zealand, and the UK. Agriculture is a global industry, so it makes sense that technology innovation will happen around the world.” Mark makes a more specific observation. “Different countries are making different kinds of breakthroughs. India, for instance, is making a breakthrough with small holders being more connected to the supply chain. Companies like Ninjacart (in the Syngenta Ventures portfolio and based in India) have helped farmers there become more profitable.”
“Increasing focus on sustainability will be a further boost to investment and development of these technologies, which will bring innovation to an industry that is one of the slowest to adopt technology.” In conclusion, no doubt AgriTech as a startup vertical is on the rise, but is it here to stay? “This pandemic is a once in a lifetime event. Some opportunities that we cannot see today will be obvious when we look in the rearview mirror years from now,” concludes Mark. “I think automation, eCommerce, business model innovation, and climate change action will be some of them — automation because
of the pandemic’s impact on labor and touchless work; eCommerce because of the pandemic’s impact on how and when stakeholders in the supply chain trade; business model innovation because of the pandemic’s impact on how value is created and captured; and climate change because of the pandemic’s eye opening impact on reducing greenhouse gas emissions. Perhaps there are others, and perhaps I am completely wrong, but I guarantee there is an entrepreneur out there right now who is ginning up something great in one of these topical areas.” Adam looks at our nearer future. “I believe that COVID-19 will be a catalyst for increased development of AgriTech technologies to ensure that the supply chain can be more efficient and resilient going forward. I also expect that the increasing focus on sustainability will be a further boost to investment and development of these technologies, which will bring innovation to an industry that is one of the slowest to adopt technology.”
INNOVATION SAGE
SUMMING UP
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2020
Innovation Sage’s Pick
for Startup of the Year 2020:
INNOVATION SAGE
Gong.io
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An Interview with
Eilon Reshef
Co-Founder & CPO at Gong.io
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t has been quite a challenging year. No surprise on that statement and we have been talking about these challenges here at Innovation Sage magazine for quite a while. Not too many startups, though, unfortunately maneuver the challenges to their advantage. Remember the saying: “When life gives you lemons, make a lemonade”? In the case of Gong.io, a funding round of $200 million dollars with a valuation of $2.2 billion, is perhaps one of the best lemonades ever tasted. With the ability to scale-up tremendously and also a one-of-a-kind capability of realizing its vision, Gong.io is Innovation Sage’s startup of the year for 2020. We discussed our pick with Eilon Reshef, one of its founders.
Hi Eilon, great having you. Were you surprised by our pick? I must say that in a way I am quite surprised. There are many successful startups out there, and Gong is just one of them. I mean, anybody who was not aware of our existence until our latest funding round probably thought we have burst into the scene out of nowhere, but honestly for us, it was just another milestone reached. We have raised a lot of money in the past. Although our last round was only a third of the amount we have recently raised, it was still a nice chunk. Anyways, we are proud to be nominated as your startup of the year.
“After using our product, it feels as if without it, you are flying an aircraft without the use of a computer.” You have talked about those who are less familiar with Gong, so I will ask for their sake. What is Gong exactly? Our startup falls inside the category of
Revenue Intelligence, meaning we assist organizations who work with customers to understand their base better by improving all organizational customer functions per se, such as sales or customer success. Our technology enables the understanding of everything that occurs between a company and its customer base. We analyze video conferences, telephone calls, eMails, text messages, etc., and provide valuable insights thus assisting the organization to succeed. We can objectively advise what kind of deals are more successful, the customers’ needs and wishes, and other important commercial aspects. After using our product, it feels as if without it, you are flying an aircraft without the use of a computer.
What is your role in the company? Especially as we have learned that it has changed lately. I started as a CTO and was responsible for both product and technology. Lately, we have brought Ohad Parush on board, who led Akamai’s Israeli activities in the past, and he will be taking over the technology part. So, I will focus on the product from now on as the CPO of the company.
“Our total addressable market has just increased almost 100%. Think about it, people we have never expected to be our focus in an organization were requested to sell and get our feedback in order to learn how to do it correctly.”
INNOVATION SAGE
How will you sum up the year of 2020?
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I am still adamant to do this finalization before January 1st 2021, but if you push me, I must say it was a strange year for all of us. This year will be talked about for generations to come most likely. On the business side, two things happened to Gong. Firstly, our market doubled itself. In the past, half of the meetings between salespeople and their customers were face to face. Due to COVID-19, all sales meetings transferred to virtual. Do not get me wrong; we do have a solution for faceto-face meetings also, but that requires the salesperson to record the meeting through our app, and usually that does not happen. Now with everything gone virtual, our job is obviously easier. Moreover, none of us expect things to return to the way they used to — no way we will see a salesperson wake up, drive to the airport, fly to another city for a couple of meetings and return, ever again. There will still be face-toface meetings. God forbid, these will not take place ever again, but the balance
will shift dramatically towards more and more virtual meetings. Therefore, our total addressable market has just increased almost 100%. Think about it, people we have never expected to be our focus in an organization were requested to sell and get our feedback in order to learn how to do it correctly. Second thing that happened, which is actually negative, is the fact that companies have suffered heavy losses during this crisis. For instance, LinkedIn, which is one of our biggest clients, laid off some of their workforce on one hand and on the other hand have less money to spend on services such as ours because of revenues downfall. All in all, strategically our tools have become more significant to businesses. Our Net Promoted Score (NPS) was always high in the area of 70 when a customer was asked how content he or she was with our product. Now we are topping 80, i.e. people have no idea what they would have done without our product as they feel as previously mentioned it is like flying blind. It is sad to say we actually gained ground because of COVID-19, perhaps not as much as ZOOM did, but we grew substantially.
Looking at this new world you were talking about, do you think people got used to this reality, or are they still searching for their way in the dark so to speak? To answer this we need to split the business world to several parts. First, there are those who got hit very badly like restaurants, tourism businesses, even street shops for much of this pandemic. These businesspeople are experiencing a different life than ever before, and I sure hope they
will be able to return to what it used to. As for the world of technology, at first people in this industry pulled their handbrake hard in order to pause, understand the situation better and react. Then they actually found new opportunities when all the previously mentioned suffering businesses had to move online for sales. eCommerce exploded obviously, and companies like ours, Slack, or ZOOM grew significantly as well as people had to adapt new technologies in order to cope with the crisis better. Therefore, productivity has maintained itself although I must say I fear most companies have yet to realize the real cost of social distancing. Many companies were quite content with remote working and dispersed the workforce, but if you ask for my opinion, the social connection is imperative. In Israel, we still do go to the office part of the time; in countries like the US, they do not, and the psychological burden is quite huge. The energies are not the same, the quality of brainstorming is lower, and that without a doubt hurts the productivity of the team.
about them until about a year ago. I mean, businesses perhaps did but the regular Joe? No way. In our company we used Cisco’s WebEx. It is a little unpleasant to say, but as WebEx froze, ZOOM passed them quickly. Eric Yuan who was one of WebEx’s top engineers wanted to innovate but could not promote some new products he pitched to top management. And so, he left the company, founded ZOOM, and now this company is valued at more than $100 billion. We do not want to make such a mistake, and we will keep developing and innovating. We are about to double our development team in 2021. We started analyzing phone calls; then we gave insights to help improve the sales force. Now, we are building a sales assisting system to really help people sell more. In the future we would like to advise what the market really needs, not only the sales team, and so on, so forth. All these developments require better technologies and new products. Thus, we are running like crazy to reach these goals. If we will not do it, then our competitors, one of the big CRM companies for instance, will. I sure hope though we will be there before them.
“We are building a sales assisting system to really help “All white collar professions people sell more. In the future will continue, but they will have we would like to advise what the digital assistants working to market really needs, not only improve their productivity and the sales team.” success. The assistant’s job is not to replace the professional You guys peeked this year, and one question but to save them from doing must be asked: How do you maintain such a all the routine time consuming peek? tasks.” Five years ago, nobody had heard about ZOOM. More than that, most people around the world have never even heard
INNOVATION SAGE
One thing that is bothering, from all the developments you have been mentioning, is that one day salespeople will become obsolete.
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I do not think that is the future really. End of the day there are two types of professions. Drivers, for instance, will no longer be needed in the future as the world will slowly move to autonomous vehicles. By the way, nobody really enjoys driving — even professional drivers do not. Maybe motorsport drivers are the exception. But honestly, who enjoys sitting in traffic? However, all white collar professions will continue, but they will have digital assistants working to improve their productivity and success. The assistant’s job is not to replace the professional but to save them from doing all the routine time consuming tasks. You talk about doctors in this issue. The digital assistant for example will notify the doctor that
there might be a problem, but the doctor will verify and decide whether it really is. For the salespeople, it will be for instance a reminder to do a follow-up on the last eMail or call. No salesperson enjoys remembering every detail in any sales activity. In a couple of years the assistant will even propose an eMail template for the salesperson to send to a specific customer. However, the salesperson will be able to modify it or improve it in a way. End of the day, I cannot see a system ever replacing the human connection and touch.
And where are you in the process of creating such an assistant? Nowadays, we are at a stage where we can point out a risky deal. For example, our system can alert the fact that the salesperson did not talk to enough people before closing such a deal because usually he or she talks to four people and here,
he or she only talked to a couple. Or you only talked to low level employees when usually you close the deal with higher level executives. Or you think you will seal the deal in two weeks, but you have yet to discuss the price. These all sound trivial, but they are far from it, and we can do all these.
“When a company such as ours has such high valuation, it enters the one way street towards an IPO.” As Gong is quite close to ending its startup phase and becoming a high-tech company per se, what is next? When a company such as ours has such high valuation, it enters the one way street towards an IPO. Let’s be honest, there
aren’t many companies that can buy us nowadays, but even for those who can — and we have obviously declined many offers — we keep telling them we still seek to expand. As you may realize from our aimed future developments in the next few years, we are on the way toward building something meaningful. We certainly hope we employ roughly 800 people by the end of 2021.
Finally, what may we wish for Gong in the next years to come? We hope we can still create high value for our customers. All starts from that rule of thumb, be it more sales of our current product or sales from new products. I hope we keep behaving like a startup as much as we are allowed to.
Entrepreneurship Through
INNOVATION SAGE
the Pandemic Perspective
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Prof. Dafna Kariv, Contributor
Professor of Entrepreneurship, Adelson School of Entrepreneurship, IDC, Herzliya
W
e are all eagerly expecting Pfizer and Moderna along with other companies’ vaccine production and the subsequent FDA approval; yet, the COVID-19 pandemic is present, unleashing changes in every domain of our lives, and experts have already stressed it is here to stay, and we should work it out on how to live together with the virus. Its impact is prevailing and disruptive, hitting startups around the world. Though, alongside, it sets many interesting, once-in-a-lifetime opportunities, such as innovative products, services, and strategies that could be valuable to navigate the crisis and provide inventive and accurate responses to current needs. These needs are much more expanded than just the cure and include problems that have arisen due to the pandemic, such as education, communication, safety of elderly people, emotional dysfunctionality and distress, and the “stay-athome” related needs, including gaming and UX among others. While the COVID-19 pandemic has progressively prompted startups by introducing uncertainty, it also presents a unique situation that has no documented equivalent in the entrepreneurship literature. Startups are supposed to be an effective vehicle to minimize the effects of crises and have been recognized as a promising key factor in revitalizing the economy. Concurrently, and almost by definition, startups are born in crises, and they actually face multiple crises along their journey, e.g., generating financial resources, developing
competitive advantages, obtaining the best technologies, etc. Startups navigate more naturally within crises. Through their accumulated experience, they are equipped with the mindsets, tools, and strategies to cope with crises by exploiting opportunities, using more agile and proactive strategies, or engaging in disruptive innovations. At the same time, startups are also the carter that fuels crises. Their feasibility and sustainability rely on disruptive innovation, provoking the existing offerings, and recurrently pushing their ecosystem out of its comfort zone by reciprocally adapting the new development that they introduce. Accordingly, the concept of the “Day After” has shifted to a “New Normal” apparently in every domain that touches startups, e.g., social communication and interactions, vision, business models, innovation, remote work, new meanings of finance, the power of purchase and marketing, and founders’ psychological aspects. The implication is that even if the virus is controlled in the future, the changes that have already taken root in the landscape will endure and will require considerable adjustments in the affected domains. The pandemic requires a closer and deeper look into the multiple areas that are affected by its unexpected dynamics, to better predict, encourage and improve startups’ activity, to both respond to the actual needs, and to put the economy in motion.
Innovation Sage’s Pick for Breakthrough Startup of the Year 2020:
INNOVATION SAGE
Papaya Global
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An Interview with
Eynat Guez
Co-Founder & CEO at Papaya Global
W
hen you look at such a category and try to pick the one startup that burst onto the scene like a bat out of hell, it is always the hardest thing. Almost every new startup you hear about is either sexy, refreshing, or in most cases even both of these combined. However, one startup which shined the most, did it in an uprising vertical – HRTech. We discussed recently here in Innovation Sage the fact that the workscape is rapidly changing. Therefore, it is only fitting that a variety of startups will try to assist employers with simplifying the processes of managing a workforce that is currently looking at an old world, which is being erased like blackboard. Papaya Global is doing just that. Its innovative tool will help employers deal with a dispersed workforce and make the lives of salary accountants in all sorts of organizations much easier. We sat with its founder Eynat Guez for a talk.
Congrats Eynat, so how do you feel about our pick? Wonderful, it is always exciting when people realize your hard work, and for me, it is something I have dreamed about for many years. Any startup goes through these early stages where everybody is skeptical and keeps telling you your idea is no good or that nobody needs it. So, I guess we are past that phase right now, and people appreciate everything we have done so far.
“We adapted quickly to the understanding that we are not in survival mode but in a breakthrough and entering our growth stage.”
INNOVATION SAGE
32
If you don’t mind, please sum up 2020 for us.
To what do you credit your success so far?
God, this year was equivalent to many years of studying in any business school. It has been a year of survival. The year started with many optimistic plans, and back in January I remember thinking COVID-19 has nothing to do with me — it is all happening in the Far East. After we all realized what was really going on, we pressed the panic button and started looking at our B plans, scared from a judgement day scenario. Then we internalized the fact that the world keeps on spinning, and so we had to think of how to correctly answer all questions which arose from these global challenges. On the business aspect of things, end of the day this was a great year for us. We adapted quickly to the understanding that we are not in survival mode but in a breakthrough and entering our growth stage. What I personally understood during this year is that it is all about the people. If you have the right dedicated team, things will materialize.
I think that it is very basic. Ultimately, we solve a real problem. We are all coming from the world of HR, and we are able to look at this problem straight in the “eye” so to speak. Despite the fact that this problem objectively is quite dull and deals with many gray areas, it is still cardinal, and we are solving it well. Second thing is focus. We are very comfortable with what we are doing, and we pretty much know what needs to be done. Even when we finetuned our operations, we always went back on track and focused on the problem we are solving and the value we deliver to our customers.
“Even when we fine-tuned our operations, we always went back on track and focused on the problem we are solving and the value we deliver to our customers.”
So, let’s talk about that. What is Papaya Global? Papaya Global is a global salary management tool. Instead of micromanaging the salary per country, with all that is involved with it — laws, regulations, independent processes, etc. — we have created a system that has the capability to take all of these parameters, different processes and procedures, and consolidate them under one product. We combine the aspects of getting down to the minor detail while looking at the entire picture.
“Honestly, we are in a ‘growth stage on speed’.”
Where are you in the process? VCs like to call our stage: Growth. Honestly, we are in a “growth stage on speed”. We recruit roughly 20-30 new customers each month, some of which are very large. We are focused on improving our operations to correlate with this amazing growth.
“When people who are experts in our field heard about the problem we try to tackle, they agreed it is truly one of the fiercest challenges out there for companies.” Speaking of VCs, what do you think makes them trust you enough to invest so much money in your startup? VCs look at the numbers. Simple as that. I always say that other startups invented all
the well-known metrics way before I ever familiarized myself with these. All we do currently is just try to understand where we fit in ours. These past couple of years our metrics were great. Moreover, VCs look at startups the same way I described before. They scout the market for startups who solve real problems and challenges. When people who are experts in our field heard about the problem we try to tackle, they agreed it is truly one of the fiercest challenges out there for companies. Moreover, many companies we met with were very skeptical about our ability to solve such a unique problem. Finally, VCs are looking for the best people to execute their solution. When they see your growth coupled with high customer satisfaction, it is a great sign for excellent execution.
“I think that our top challenge in the near future will be who are top quality customers going to be.”
INNOVATION SAGE
You have yet to peak, and surely you will reach great peaks in the future, but now people are noticing you. How do you maintain your amazing positive momentum so you reach your goals?
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Each year brings forth its own challenges. I think that our top challenge in the near future will be who are top quality customers going to be. I mean selling to Coca-Cola is much more challenging than selling to SMEs. You always need to consider your next target audience and potential customers. You really need to dare in that aspect. As long as you maintain an innovative spirit, it creates a dynamic organizational culture. I cannot talk about the far future, but we will continue to do so in the next few years for sure.
“In 2021, we will be launching the first of its kind innovative tool — tool which will assist in the basic management of employees, a global HR information system that will manage the worker up until the payment of his or her salary.” Where are you headed to in the year of 2021? It will be most probably a very interesting year. We are constantly trying to triple
everything: revenues, new customers, etc. We are creating new functions in regard to our product. In 2021, we will be launching the first of its kind innovative tool — tool which will assist in the basic management of employees, a global HR information system that will manage the worker up until the payment of his or her salary. The system will have to co-exist with all new working trends, like remote work for instance, which is a trend that is here to stay even in a post-pandemic world. And again, next year we will start serving customers with ten thousands of workers or more. This is a completely new ball game.
What actions have you taken to prepare for this huge leap? We constantly recruit the best people. We always analyze our goals and what is needed to obtain them. We must support these goals with more technological
developments. We must recruit more strategic business partners. You need to dismantle it all to the tiniest of factors. Perhaps, you will not be successful in bridging all of these factors, but you must address each.
So, what should we wish for Papaya Global with a new year ahead? Let the COVID-19 vaccine come, and all will be okay for sure.
A Year of Change Surely.
But Is It for the
INNOVATION SAGE
Better or Worse?
36
Sharon Vanek, Contributor
Executive Director at CICC – California Israel Chamber of Commerce
F
or people from Berkeley to Bombay to Milan, 2020 means the dreadful global pandemic, which has brought millions of deaths and illnesses, and lost jobs — the mysterious virus that is upending everything “normal” in our lives. However, I have seen that the tragedies of 2020 have also created some opportunities, sparking speedy innovations in communities that until now were slow to adapt. For example, during 2020, investors and governments have been working cooperatively, creating some astounding medical breakthroughs. Global pharma investors stepped up their activities, speeding the development of breakthrough vaccines to combat COVID-19. Back in March, Johnson & Johnson and the US government were the first to announce that they will jointly devote $1 billion to boost the development of a vaccine. In addition, since March, other innovations have been sparked as businesses have been forced to pivot to meet consumers’ new needs. The restrictions of the “new normal” from “sheltering-in-place” to “social distancing” mean we rapidly see innovations that might have taken years to develop. From health and wellness to grocery shopping, to gaming, companies are extending their brands to meet the ever changing consumer needs. More than ever, millions of people around the world are depending on online services - from shared educational platforms, to financial services, to tools for collaborative work, to ordering food and consulting physicians to gaming.
The new global COVID-19 culture also means more online fraud, which has led to an enormous demand for innovative ways to protect people’s online privacy. An urgent need for help from fraud and cyber companies is increasing along with a growing demand for protective legislation and international anti-fraud collaboration. Low-income families, young children, and elders are quickly adapting to using technology and online services — from ordering medicines and groceries to taking classes, to “seeing” distant grandchildren. As more people need technology, small companies are discovering new technological opportunities — from selling, distributing, and installing equipment and tools. In addition to small businesses, traditional institutions such as government offices, schools, and healthcare systems are being forced to use technology in new ways. Some technological changes we are seeing were inevitable, but the new “normal” means institutions must change fast or perish. During this global pandemic, the idea that “Necessity is the Mother of Invention” is much more than a cliché. For example, FORD and GM quickly converted some of their production lines to manufacture respiratory equipment for COVID-19 patients. In addition to the daily bleak, COVID-19 medical news, innovative entrepreneurs and scientists are working fast, creating breakthroughs that will enrich our lives, long after the deadly virus is eradicated.
The Year of
INNOVATION SAGE
New Opportunities Summing up 2020
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Author: Tal Berman
Author: Sharon Vanek
Contributor: Michal Gilon-Yanai
Partner at Two Lanterns Venture Partners
Contributor: Brian Rosenzweig Partner at Janvest Capital Partners
H
ow do you even start concluding the year of 2020? Nobody could have predicted anything that has happened in this historical year for mankind. Even though the economic situation was hardly ideal for anybody for obvious reasons, and regardless of the fact that we still cannot comprehend the ripples this year will have on our future in other aspects, we can honestly say that many business opportunities have risen. We brought forward in this magazine many companies and industries, which thrived under the pandemic’s new circumstances.
INNOVATION SAGE
“We are constantly witnessing the brilliance, creativity, and resilience of innovators and entrepreneurs who are solving big problems, old and new, in all areas of life around the world.”
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But the few examples we brought forward have hardly scratched the tip of the iceberg. “It has been a sad and challenging year in many ways, but the many challenges the world has faced and continues to face, as well as changing paradigms in many industries have also created many opportunities for innovation,” Michal Gilon-Yanai, a scion to an ultraentrepreneurial family and a partner at Two Lanterns Venture Partners, tends to agree
with our introduction and assessment. “We are constantly witnessing the brilliance, creativity, and resilience of innovators and entrepreneurs who are solving big problems, old and new, in all areas of life around the world. This ranges from record speed vaccine development to the totally new ways we live, work, learn, eat, etc. For example, the emergence of multiple online events and conferences platforms and the rapid expansion of telehealth solutions over a few short months.” If you look closely at such cardinal problems Michal wisely mentioned, a few were as influential as what we have discussed on our previous issue, our new working habits. People suddenly, due to the pandemic, were ordered to remain at home by local governments. That phenomena has joined another one, which again we discussed in our October issue, of companies who are going fully or semi-remote regardless. “I think 2020 has empowered the remote worker to create and/or consume new technologies that can enhance their productivity and facilitate a new way of working,” tells Brian Rosenzweig, co-founder and partner at Janvest Capital, which over the last decade or so has been leading pre-seed and seed investment rounds in enterprise technologies being developed in Israel but commercialized in the US. “This goes beyond the obvious of the musthaves, like cloud infrastructure, and into productivity tools, task management, communications, and various types of freelance marketplaces.”
“This was a big year for ‘shift left’ technologies, that is incorporating more and more capabilities, functionality, oversight, and security, earlier into the software production lifecycle.” 2020 brought, as said, a new reality from its get-go, and therefore, we saw new innovative trends taking over the ones which were “ruling” the year of 2019. “This was a big year for ‘shift left’ technologies, that is incorporating more and more capabilities, functionality, oversight, and security, earlier into the software production lifecycle,” Brian tends to agree. “Moreover, security continued to be a big issue. Some areas where we see immense potential is in Identity, as well as Third Party Risk Management. Third, there is data and knowledge democratization across the enterprise. Lastly, we saw the emergence of productivity solutions, to bridge the working from home necessity.” Michal agrees with Brian but tends to look at things from a bird’s eye view. “Several new trends have indeed emerged related to pandemic response and the “Future of work / health / education / events” themes. Yet, I would argue that most traditional trends from the past years have remained in the driver’s seat, such as: AI, autonomous vehicles, and the digitalization of mature industries. We did see, though, areas such as telehealth and online meetings and events, which have seen explosive growth and are implementing changes that are likely to sustain, even if at lower levels, into the future.”
“We are seeing robust, highquality deal flow, and we have already made seven investments since our first close.” We have mentioned the economic downfall we are witnessing, which will, under most forecasts, worsen in the near future. Summing up the year together with two active investors makes you wonder how active they really have been in such a challenging time. “We are a new fund, so we are still in the process of fundraising ourselves, with a target final close at the end of February 2021. After our first close in February 2020, we did not resume fundraising for several months, similar to how many startups stalled their fundraising efforts for a while during the initial lockdowns,” Michal confesses. “We are now actively fundraising again and are encouraged by the investors’ renewed and strong interest in early stage hightech companies. On our investment front, we are seeing robust, high-quality deal flow, and we have already made seven investments since our first close.” Brian, on the other hand, surprisingly did not witness any challenges whatsoever. “All mentioned did not affect our activities at all. Janvest has, since its inception, been a ‘remote’ fund, i.e. three partners in three different locations. We continued writing checks even when face-to-face meetings were not possible, it just meant more time on ZOOM instead.”
INNOVATION SAGE
“From a VC perspective, we have a lot of success deploying in downturns accessing great companies at an early stage when a lot of early stage capital has retreated.”
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Even if things have gone somewhat according to plan, surely the investors have adapted new insights and policies before what Brian coined: “writing checks”. “We at Janvest don’t believe that we can perfectly time the ebb and flow of the global economy, but we are confident in our ability to diagnose where we are in any given cycle. As such, we employ both a recessionary and expansionary period playbook,” Brian confidently explains. “In 2019, we started prepping for an economic downturn and towards the back half of the year pushed our companies to go out and raise more capital to be able to weather a financial storm. In less than a year, our portfolio companies were, in aggregate, able to raise more than a quarter billion dollars. Our best performers are well capitalized and can go out and hire talent that may enter the market as companies try to downsize to cut costs. This will result in significantly better products hitting the market when the market eventually turns around. From a VC perspective, we have a lot of success deploying in downturns accessing great companies at an early stage when a lot of early stage capital has retreated.” Michal shares somewhat the same feeling. “There are of course
many individuals and companies facing significant hardship during this time, but as mentioned, there are also many new opportunities to innovate, which startups are pursuing with passion. It is impossible to predict, and it depends a lot on government policies that can accelerate or prevent major economic disasters. Due to the likely long-term uncertainty of macroeconomic conditions, founders seeking funding should consider additional buffers whenever possible.”
“If you only know how to function in the good times, you will ultimately face significant challenges through the lifecycle of your fund or investments.” No doubt this year has taught a lot of people much about how to cross any chasm and how to persevere in times of adversity. It is highly interesting to note what investors learned in these troubled times. “Firstly, you must use a recessionary playbook. If you only know how to function in the good times, you will ultimately face significant challenges through the lifecycle of your fund or investments. Second, a portfolio diversification is immensely important as just focusing on one type of technology or one market, no matter how ‘hot’ that market is, dramatically increases your risk. Third, I cannot emphasize enough the fact that hope is by all means not a strategy.”
“As a larger percentage of VCs that used to buy options at the seed round retreat from early stage and look to more mature businesses, that will enhance the need for startups to be extraordinarily high-quality in order to get their desired funding.” Lastly, with rumors of the upcoming vaccine and perhaps a return to normal sometime in the second half of 2021, what kind of a world are we about to witness? Is it going to be a hybrid kind of animal between 2019 and 2020? “Globally, the investment landscape will remain relatively unchanged from the last year or so. There is a ton of venture capital out there that needs to be deployed, especially by VCs that have raised massive funds over the last few years. This will force a lot of VCs
to continue looking primarily at large growth stage companies where they can get significant allocation,” Brian claims but paints a problematic picture for early stage entrepreneurs, which is a scary trend we have seen lately. “However, as a larger percentage of VCs that used to buy options at the seed round retreat from early stage and look to more mature businesses, that will enhance the need for startups to be extraordinarily high-quality in order to get their desired funding.” Michal tries to look at things from a different perspective. “Some of the trends that emerged during the pandemic, such as remote work and telehealth are likely to stay with us, but we will be able to choose the extent to which they are followed. New businesses are likely to grow and thrive in this process of optimization of how we live, work, travel, etc., and I think that soon innovators will also start to tackle longer term threats that this pandemic has alerted us all to and to mitigate the impact of similar future events. Overall, I think there will be general optimism that is likely to fuel entrepreneurship and investment activity and to help drive economic recovery.”
Winds of
INNOVATION SAGE
Change 2020 FinTech Wrap-up
44
Nir Netzer CPA (LL.B, MBA), Contributor Founding Partner at Equitech Group and Chairman of the Israeli FinTech Association, FinTech-Aviv
I
n a year that has been largely summarized by hardships and uncertainty, we have seen FinTech push to the forefront. In an industry that is typically characterized by adaptability and tenacity, startups and unicorns alike have recognized their opportunity to demonstrate the appeal of their products and services in an ever-digitalizing world. So here is what the world has brought us in terms of FinTech innovations. There are obvious winners here, and we took the liberty to mention the earners in these times. Throughout the ongoing quarantines, travel restrictions, work from home transitions and everything else 2020 has thrown at us, people have spent more time than ever online. While most businesses are still unsure of the total damage the global pandemic has ravaged
on their current and future prospects, many FinTechs have accelerated their preceding growth trajectory. From March until June this year, things moved somewhat slowly as the global economy nearly shut down and uncertainty was at its peak. However, CB Insights reported $10.2B of VC funding went to FinTech during Q2, which is consistent with the original trends. Q3 also saw $10.6B of VC funding, which indicates steady growth and stability even in difficult times. The leaders of these rounds were Digital Banks such as Monzo, N26, Nubank Chime and Lili, who tracked the attention of investors and customers alike. While the traditional retail banking approach suffered heavily, challenger banks have capitalized on people’s inability to bank
conveniently in-person. Their greatest value proposition is the ability to control your finances completely from your handset or PC, and this has never been more relevant. As a result, these services were able to severely increase their user base and move toward a multiple product offering.
INNOVATION SAGE
Chime and Varo have both grown significantly this year and now offer a full suite of financial services to their users; these include early pay access, high yield savings, cash advances and more. Another brilliant move in this space was made by Lili that offers mobile banking services for freelancers in a segmented focused offering that cannot be ignored.
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PayTech was already taking precedence in our globalized economy, but adding a factor that makes transacting in cash a physical danger certainly has helped with adoption. Though at first consumers and businesses were the targets of PayTech, the pandemic has forced governments and central banks to utilize these services as well.
Major FinTech players like Square and Stripe are setting the trends and heavily influencing young PayTech startups. Building out the realtime payments infrastructure is becoming a considerable priority in the modern world and the benefits are endless. But Startups like Openblocks are the ones who are bringing the exciting news to the discussion when they normalize cryptocurrencies for transaction purposes by bringing a universal payment solution for mass-market adoption, by turning crypto currency into real, usable money, and by transforming existing credit cards into “digital currency� enabled cards. COVID-19 has brought a new wave of retail investors, who make up for 25% of the stock market, up from just 10% in 2019. With that being said, WealthTech and Trading startups have seen quite the resurgence from what looked like an overall sector slowdown before the pandemic. CB Insights reports indicate Q2 and Q3 in 2020 both had $1.36B and $1.49B of VC backed financing, respectively, which is a marketed improvement of just $275M and $477M in Q4 2019 and Q1 2020, respectively.
While pioneering zero-commission trading platforms and a very appealing fractional shares trading offer, Robinhood added three million users this year. Many retirement planning startups have focused their attention on differentiating product offerings and specifying their target market. Whether you are an affluent working professional nearing retirement age, or a young, low-income earner, personal finance advice and education, as well as access to capital markets, is about to improve substantially. Since the 2008 financial crisis, financial institutions have had to learn to comply with new regulations, which created a massive boom in Compliance and Regulation Technologies over the last decade. This also encapsulates companies looking to minimize risks of fraud through cyber and biometric measures. Many of the top RegTech companies rely on big data and machine-learning, coupled with intense algorithms, to sniff out illicit financial activities like money-laundering, data breaches, and cyber hacks. Thetaray is one of the high-tech startups out there offering financial institutions easy implementation to their widely successful and proactive fraud prevention and AML technology. With more people and businesses participating in online marketplaces than ever before, this could not be more pressing.
InsurTech paints a similar picture of overall growth within FinTech, but in a distinctive way. While CB Insights reports a near tripling of InsurTech funding from Q1 to Q3 ($978M to $2.56B), they also specifically cite five mega deals ($100M+) that contributed to this figure, accounting for just under half of the $2.56B in total funding. The biggest being Bright Health for $500M and another super impressive round of $250M was made by Next Insurance on Q3. This demonstrates that FinTech sectors are not immune to the habits of their overall market as the insurance industry has always tended to favor more consolidation. This is especially apparent when we see BigTech companies like Google and Amazon wriggle their way into the industry through subsidiaries and controlling partnerships. While each sector within FinTech has had their own stories, the overall industry has thrived through innovation and creativity. We often see that tough circumstances bring out the best and the worst in people and true leaders emerge in crises. As traditional finance faltered, FinTech companies came to the rescue and made valuable ground on collecting market share in their potential client base. As new startups continue to emerge and FinTech evolves at this staggering pace, we have plenty to look forward to in 2021 and in the years to come.
INNOVATION SAGE
48
DIGITAL HEALTH
Digitalizing Healthcare or Providing Health Operators
INNOVATION SAGE
Digital Tools?
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An Interview with
Kerryn Butler-Henderson
an Associate Professor of Digital Health, University of Tasmania
N
o other industry needed much digital change other than healthcare. You hear the terms Digital Health, Telemedicine, mHealth, and others, and you get lost in this terminology. Patients have always found it hard to understand what their doctors were talking about, and now it seems that other than really making sense of the health jargon, things are becoming much easier. We chatted with Prof. ButlerHenderson, an international expert in the field, to try and clear some of the fog away.
Hi Professor, thanks for finding the time. My pleasure.
Please kindly tell us about yourself I am known for my passion and dedication to the promotion and advocacy of the specialist digital health workforce in Australia and internationally. I am a leader in the development of health informatics and health information management competencies, providing expertise in the development of several different competency frameworks. I am a fellow and director of the Australasian Institute of Digital Health and Deputy Chair of the Certified Health Informatics Australasia (CHIA) Examination Committee. I am also a Deputy Editor on the BMJ Health and Care Informatics journal. I supervise PhDs and higher degree research students and am involved in several industry projects.
“Health informatics is the science and practice of data, information, and knowledge to support the improvement of human health and healthcare delivery, so in turn digital health is the conduit (the technology and data) to achieve these functions.”
Can you define the terms usually used in the field: Digital Health / eHealth / mHealth? In the “Encyclopedia of Gerontology and Population Aging” I define health informatics as “the science and practice of data, information, and knowledge to support the improvement of human health and healthcare delivery”, so in turn digital health is the conduit (the technology and data) to achieve these functions. eHealth is no longer used as we have progressed from simply electronic, and mHealth is the sub-set of digital health focused on mobile technology.
What factors drove the health industry towards digitalization? If we are talking about the strict definition of “digitalization”, turning processes into electronic and digital formats, there are several factors. But if we talk about digital health, which is different as it is about digital tools being part of the work process (not digitizing existing processes), there are numerous factors: patient safety, citizen centric health, process and service
efficiencies, patient care planning and coordinated care, COVID-19, advances in technology, software and systems, health workforce capabilities, shifts in education, increases in both big and small data and evidence informed decisions, and increased governance and standards.
“We are finally recognizing it is not so much the technology that is limiting the potential but the limits we impose ourselves.”
INNOVATION SAGE
Where are we in the process of digitalizing the health industry? Do we see any results of a change?
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We are on this cusp of understanding that we no longer want to just digitalize processes; we want to change the process to incorporate digital tools. Whilst we are still creating systems that enable the electronic capture of information (3rd revolution technology), we are also using solutions that assist and inform our processes (4th revolution technologies). We still have a long way to go with these technologies, such as AI and cybersecurity, but we are finally recognizing it is not so much the technology that is limiting
the potential but the limits we impose ourselves.
Has COVID-19 assisted in driving this change forward? Why? It has in terms of making organizations realize we can no longer be complacent. But the rush to implement technology has both strengthened and harmed the argument for digital health. Changes to the funding of telehealth in Australia has increased the engagement in this technology throughout the health industry, whilst highlighting the lack of technology, governance, and workforce capabilities to use the technology in a safe and meaningful way. Hospitals that previously thought the digitalization of health records was sufficient to meet digital needs have now realized they still have the limitations of the paper record at the point of care, which on a COVID-19 ward is not a suitable medium.
“There is a strong argument that systems should be more patient focused instead of the traditional focus on organizational processes.”
What kind of innovations and technologies in specific are changing the health landscape? The big one in 2020 is telehealth largely because of the need to provide continuity of care coupled with isolation. Automation is another area as health manages the fine balance of being citizen focused but needing to operate as a business. As we move forward from discussing big data, AI has an increased role in health. Cybersecurity is the fourth area I had put on the list, with several attacks in the past shifting how we manage and protect health data. I think it is also worth mentioning citizen-centric and citizen-focused innovations. There is a strong argument that systems should be more citizen/patient focused instead of the traditional focus on organizational processes to align with other evolutions in health, such as outcomes-based health, coordinated care planning across the system, and citizen-led care.
What more needs to improve, and how, in your opinion? We need to do more towards my last point above. At the end of the day, our health system is here to meet the needs of the citizen. If digital health is seen as a tool to support health delivery, planning, management, and evaluation, it needs to be designed with the citizen at the
center. We also need to be doing more to increase the digital capabilities of the health workforce, both within education and training and through supporting the needs of the broader health workforce and supporting a specialist digital health workforce to meet the current demands of integrating digital technology into health.
“Many forecast the day when we do not refer to digital health — it is just called health.” Where do you see the digital health industry in the year 2030? Many forecast the day when we do not refer to digital health — it is just called health. I do not foresee that occurring by 2030, but I do foresee its increased application within health. AI and automation will greatly increase, changing decision support and operational work processes. Citizen understanding about health information and technology will also drive the change in the role of technology and data in health. But we need to start forecasting now how the 5th industrial revolution will impact health, so we can be ready.
Is the Rise of Online Usage as a Result of COVID-19
Here to Stay, or
INNOVATION SAGE
Is It Just a Passing Trend?
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Lilach Ben Artzi Levy, Contributor CDO Maccabi Health Care Services
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OVID-19 has affected our lives for a year now. At first, we were frightened. We did not understand the meaning of the pandemic—whether we would be able to continue our daily routines in accordance with guidelines or get used to the strange new realities of lockdown. It soon became clear that digital and online services were the rising stars of the time. At Maccabi Health Services, we are constantly working to improve, develop, and expand the remote medical and administrative services we offer our patients. We, like many other service providers, invest much effort in developing these capabilities. However, our investment is not always reflected in the usage of these services among certain groups of the population—mainly, the older generations who are accustomed to consuming such services in the way they have been using them for decades. Then came COVID-19 which brought lockdown and social distancing in its wake. The resulting situation forced us to stay home, and physically accessing services was no longer an option. This meant that even the technophobes and people unaccustomed to the digital world have started to consume services through online platforms. The percentage of online service usage has sky-rocketed since the beginning of the pandemic. Older patients have learned to ask for prescriptions, referrals, and approvals through the application. People have changed their habits and are starting to communicate with doctors through digital platforms. Additionally, they have discovered that it is more convenient to send a request to their doctors using these platforms, rather than going for physical consultations. On the organizational side, processes that otherwise would have taken months or years, have been expedited and are set in motion within weeks. It may be said that COVID-19 did a great service to digital uses. Customers adapted behaviors and habits that would never have occurred
with such force, were it not for the pandemic. However, is this a passing phenomenon? Is the change derived only from the consequences of unprecedented times, or has this resulted in a permanent change? It is tempting to say yes, that people have understood how convenient and efficient it is and will continue with digital use. But in reality, the facts are more complex, especially in the world of medicine. The truth, as always, is somewhere in the middle. Our faith and natural inclination for physical encounters with our doctors, all the more so as Israelis, is unavoidable. In Israel, and perhaps the whole world, the expression “go see a doctor” means meeting your doctor face to face. There is something about it which comforts us—we start feeling better just by visiting the doctor. Thus, it is safe to assume that post-COVID-19 we will see a relative proportion of patients returning to physical appointments. With regards to the technical and bureaucratic matters involved in the world of medicine, we have succeeded in teaching a very large proportion of the population not only how to use digital tools, but also to like it. My mother, your aunt, our neighbor, who used to visit the clinic once a week to get a prescription, have come to know that it can be done through a digital platform. It is quick, easy, and even benefits their health. In summary, it may well be said that COVID-19 instigated a revolution within the world of digital health and medical services. Even if it is temporary, and people return to their former habits, it is clear that a dramatic change has taken place. Many industries are adapting as a result of COVID-19 and are writing history as they do. The digital world is no exception.
Creating a Better Future for
Mankind via the
Use of Digital Technologies
INNOVATION SAGE
in Healthcare and Medicine
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Author: Tal Berman
Author: Sharon Vanek
Contributor: Gary Gershony
MD, FACC, FSCAI, FAHA, FRCPC, Director of Cardiovascular Research, Education & Technology at John Muir Health Cardiovascular Institute
Contributor: Josh Makower MD, General Partner at NEA
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hat is more important nowadays than our health? You may think about it for a while, but opine you will not find an easy answer to this question. Mankind has recently learned about the power of nature and how in spite of the fact that we are most probably the strongest creature on our planet, we may still be beaten somehow. However, medicine is the science of understanding our imperfections and weaknesses and researchers in the field never took anything for granted unlike the rest of us.
INNOVATION SAGE
These days we are all waiting for the ultimate solution to the current pandemic crisis, the vaccine, which according to latest news reports is soon coming. However, in the day to day world of medicine the reality is totally different. “Medical Devices serve important clinical needs in ways that drugs cannot,” says Josh Makower, the co-founder of the Stanford Bio-design Innovation Program and Founder of ExploraMed which is a medical device incubator that created several medical device companies including Acclarent, NeoTract, Willow, Moximed, NC8 amongst others. Currently a General Partner at NEA, a large, diversified VC firm, he is responsible for the medical technology investing practice. “We all rely upon medical devices, from glasses to hearing aids, joint replacements to pacemakers and heart valves. These are durable therapies that improve lives every day.”
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“Digital health is the convergence of medical devices and digitalization.”
Therefore, new players arrived at the ballpark. Business entrepreneurs, who realized the huge need for digitalization of our health services or more so creating digital tools to assist in bettering healthcare. “Digital health is a broad definition, and many people use it in a variety of ways,” says Gary Gershony, a wearer of many hats, so to speak. A 25 years interventional cardiologist in both academia and the system, a researcher in the field of cardiovascular disease where he designed novel intervention systems, a serial entrepreneur with two medical devices exits under his belt, and these days a venture capitalist investing in early stage medical and digital health startups. “It encompasses many types of technologies, but for me, it is the convergence of medical devices and digitalization. It may refer to things like telemedicine or remote patient monitoring, but so much more than that. There are plenty of areas in medicine which are ripe for disruption and bring much more efficiency. Something simple as what Uber did to transportation, if that could be brought to the medical industry and improve the way patients are treated.”
“The ability to scale to so many people and the potential market being so large has made such innovation attractive.” Okay then, we understand what Digital Health means, but what is so wrong with the way things are handled right now if we put COVID-19 aside for a moment? “The world is going digital, and thus, it makes sense the medical industry would as well,”
claims Josh. “Not all therapies are as amenable to the advancements that digital technologies can deliver, but certainly the impact of AI, machine learning, data science, cloud computing, video communications, etc., has permeated almost all healthcare service models, the product development process, and almost all aspects of what we do.” Gary tends to agree with his colleague in that regard. “The ability to scale to so many people and the potential market being so large has made such innovation attractive. There are so many opportunities nowadays where many medical devices are inert and lack the power to communicate, interact, and obtain data, that will soon no longer be the case. Devices that we implant will be smarter, will be able to provide feedback, to upload data to the cloud, and other novel abilities.”
“COVID-19 has driven a greater willingness to adopt telemedicine, and that change will stick with us where appropriate.” In COVID-19 times, we all understand the importance of our medical staff and caretakers. We want to protect them as much as possible, so that they can protect
us in return to the best of their abilities. The worst thing that may happen to a country or region is the collapse of its healthcare services, and we have witnessed it happen too many times in 2020, even in western countries like Italy or the US. However, as always and as we claimed in the past, in times of huge crises people tend to think outside the box. “Although many patients have unfortunately died this pandemic actually accelerated many necessary changes in medicine,” agrees Gary. “In my health system and a neighboring one in the Bay area, who are operating together, data showed that prior to COVID-19 less than 5% of the patients were being seen remotely. Data from recent months, however, showed that over 50% of the patients were being evaluated successfully via telemedicine. There is no need, therefore, to go back to the old ways after COVID-19 is over and done with. The pandemic proved that digital health is far more efficient and forced regulators to permit it. The strong push though will be driven mainly by the patients themselves. Think about it — you drive to the doctor’s office, sit at the waiting room until it is your turn, then get checked for let’s say roughly ten minutes, and drive back. An entire operation of roughly two hours just for a procedure which takes a handful of minutes? That hardly makes any sense. So, by either logging in to the doctor’s webapp or by the use of medical devices that assist in bettering the telemedicine services, this entire operation becomes much
INNOVATION SAGE
more efficient.” Josh shares the same thoughts. “I think COVID-19 has driven a greater willingness to adopt telemedicine, and that change will stick with us where appropriate. Initially adoption was slow, but the recent crisis has thrust it on us quickly, and I believe patients and physicians are realizing how useful it can be, but they also see situations where it has limitations. I think it will find a permanent place in our armamentarium.”
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So, where are we in terms of the process of digitalizing perhaps the most important industry? The answer to this question is very tricky since none of us, as proven lately with COVID-19, knows really what kind of challenges humanity will face even in the near future, and what treatments will prove effective. “We are getting there, but change is slow,” confirms Josh and brings forward other factors. “In some cases, the delays in adoption relate to the substantial hurdles that need to be crossed for regulatory clearances. In other cases, it is simply the inertia of change, and in other situations, the inadequacy of our payment models which do not fully reward investments in infrastructure and instead are focused on events—procedures, utilizations, or visits.” Gary shares information from the field. “We are seeing a robust deal flow of startup companies in countries such as the US, Canada, and Israel, which are trying their best to overcome recent challenges. You can just read it in the newspaper to find out how many companies are trying to tackle the COVID-19 challenges nowadays.” Still there are many areas which are being improved as we speak by an
array of technological know-hows and excellent novel ideas. “There are too many to list,” jokes Josh as we ask him what kind. “Some, in which we have invested in are: Setpoint Medical’s innovative neuromodulation approach towards the treatment of inflammatory diseases like rheumatoid arthritis, Moximed’s novel minimally invasive therapy for early stage osteoarthritis, Magenta’s slimmer percutaneous ventricular assist device for temporary cardiac support, Willow’s wearable breast pump for moms, and DOTS personal allergen detection system. I could go on as we have a much larger portfolio than just this.” Gary defines other areas. “Nowadays, innovators in the field of digital health use various novel methods and technological abilities, such as precision medicine, population studies, electronic health records, artificial intelligence, virtual reality, computer vision, chronic disease management, etc.”
“There is so much left to solve, which creates great opportunities for future innovators.” However, is it enough? Hardly. There is still much to improve it seems. “There are needs everywhere in medicine and surgery,” Josh calms the enthusiasm a bit. “In my role at Stanford Bio-design, we send teams of students and fellows into an array of clinical areas every year, and they always come back with great needs
and great ideas. There is so much left to solve, which creates great opportunities for future innovators.” Gary prefers to look at the pandemic for answers. “Looking at the way the US has dealt with COVID-19, it was in a fragmented way. We will have more pandemics in the future. This has been foreseen by very smart people like Bill Gates, who invested their time and money to accept the fact that we will face global challenges in the future. The ability to have a more systematic approach to this will be ultra-important.”
“Learning how to prevent unnecessary admissions to hospital will be key by using better evaluation and monitoring methods.” And so, as we take a look into an unknown, perhaps even a little scary future, we do
see the light at the end of the tunnel. “Ten years from now all the new therapies we have today will be mature and in widespread use,” promises Josh. “There will be next generations of all these therapies, and they will be better and most likely more accessible to a wider population. I am hopeful many of the therapies I mentioned before will also be in common use, and we will be solving the next set of unsolved problems.” As always though, Gary seems to enjoy the patients’ perspective. “We will see a tremendous amount of innovation in the next decade. Learning how to prevent unnecessary admissions to hospital will be key by using better evaluation and monitoring methods. Similarly, after the release from care, we see that patients do not comply with the orders they have received before from their doctors, especially in medication usage. We will need to be able to monitor it better by using biomarkers and other types of sensors. The medicine industry will significantly evolve in the next decade for sure.“
Future Trends
that Will Shape the Future of
INNOVATION SAGE
the Digital Health Vertical
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Levi Shapiro, Contributor Founder, mHealth Israel
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he biggest driver in the US Healthcare market (which accounts for 48% of global healthcare spend) will be policy changes from a new administration. These will have massive effects. Expansion of Affordable Care Act - The pandemic laid bare the disparities in US healthcare, which according to the Commonwealth Fund, ranks LAST among developed nations on measures of healthcare quality, efficiency, access to care, equity, and longevity. A system dependent on employers for health insurance left an enormous swath of the population, including low-skilled, parttime gig, and unemployed workers, outside of the safety net. At the same time, America’s tolerance (even preference) for monopolies means that hospitals, insurance companies, pharmaceutical companies, device makers and doctors are wildly overpaid by international standards. Using the Affordable Care Act, federal and state governments (which account for half of healthcare spend) will enact change. Expect to see a greatly expanded public health insurance option and meaningful checks on monopolistic practices to reduce cost. Expect to see more reform at the state level. Even before the pandemic, states faced an unsustainable burden. Payments for Medicaid spiked from 20.5% of spending in 2008 to 28.9% in 2019. The 39 states (including DC) that adopted the Affordable Care Act according to kff.org will push for broader insurance coverage and lower industry margins. “Deaths of Despair” – COVID-19 is having unexpected effects on mental health. In Japan, where there was no national lockdown, suicides in October rose to their highest number since 2015. Japan is one of the few countries to publish recent suicide statistics. Other countries may see a similar pattern, including disproportionate levels (+83%) of female suicide. Male suicide rose 22%.
Well Being Trust reports that in the US, the economic fallout, social isolation, and uncertainty caused by COVID-19 will account for an additional 75,000 deaths. This follows a long-standing trend, evident since the mid1990s, of “deaths of despair” (alcohol / drug misuse and suicide) impacting middle-aged, white Americans, particularly those without a college degree. Expect legislation across the developed world, including in the US, to ensure systemic and centralized approaches, particularly at the local level. A patchwork of programs tends to be less effective than unified coordination and policy. “Coronasomnia” and Sleep Disruption Sleep deprivation, always prevalent, became a population health crisis during the pandemic, with residual impact across conditions, including heart disease, hypertension, AFib stroke, diabetes, obesity, depression, acid reflux, asthma, memory loss, decreased sexual desire, and liver problems. Regulators, providers, and consumers have adapted. In the US, the Centers for Medicare & Medicaid Services (CMS) dramatically expanded coverage for telemedicine services and increased payment rates for virtual visits. A report by EnsoData claims providers and sleep clinics transitioned 70% of treatments via telehealth. Research at Michigan Medicine has confirmed that cognitive behavioral therapy sessions via telehealth are as effective as inperson treatment for people with chronic insomnia. After stocking up on toilet paper, consumers made a run on sleep meds. According to Express Scripts, demand increased 15% at the outset of lockdown. More recently, use of digital therapeutics and mobile applications has grown. Juniper projects the sector to grow 865% by 2025.
“We are Here to Save Lives” A Story of an Israeli Startup INNOVATION SAGE
Creating a Better World through the Digital Health Domain
64
An Interview with
Eyal Gura
Co-founder & Chairman of the Board at Zebra Medical Vision Ltd
F
or many years, Israel was the land flowing with milk and honey and also with medical device innovation. Therefore, it is not a big surprise five of CB Insights top 250 “Most Promising Digital Health Startups” will be Israeli as well. While many NASDAQ traded Israeli companies have been producing innovation in the health industry for years, the Startup Nation is starting to produce undertakings in the field of digital health as well. Perhaps the most noticeable startup out of an ever increasing bunch is Zebra Medical. We had a chat with its founder and chairman, Eyal Gura.
Hi Eyal, how great it is to have you here. Thank you so much for having me guys.
Tell us about your background. I have been an entrepreneur for the past 20 years, and Zebra Medical is actually the fifth company I have founded. It is, however, my first digital health startup though. As said, I have founded before Zebra many other startups, like PicScout (acquired by Getty Images), PicApp (acquired by Ybrant Digital), and The Gift Project (acquired by eBay).
“I had a hunch that if one can use all the x-rays which were interpreted before that, one can surely help to interpret future x-rays.”
So why Zebra? The idea of Zebra Medical came from a personal need. I was fortunate to survive a diving accident in Mexico. I had an x-ray, and I needed a doctor who would interpret these. However, nobody with these skills was available in that area. I had to wait for a long time until a doctor arrived, and that was very frustrating for me. At that time, I was still managing my undertaking PicScout which I have mentioned. I thought to myself, I have a company who can skim through millions of pictures to identify copyright violations, but there is no tool out there to help now as I am stuck in this unfortunate predicament. At that time, I had no idea whatsoever about machine learning, deep learning, or any sort of AI. However, I had a hunch that if one can use all the x-rays which were interpreted before that, one can surely help to interpret future x-rays.
Where are you now in the process? We are selling our product, we employ over 90 workers in Israel, India, the UK, and the US, and we operate in huge markets all over the world, like Japan, Australia, Mongolia, Brazil, Europe, and more. Our products are FDA approved, and our AI works on three main modalities: mammography, CT, and common x-rays. We continue on our journey to cover more and more of these.
“Our product without a doubt can save lives.”
INNOVATION SAGE
How exactly does it work?
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It is very important to be familiar with the process before Zebra’s solutions kick in. God forbid somebody arrives at the hospital with a head injury, and the ER sends them to the CT. The output then enters the hospital’s digital archive and awaits in line for a busy radiologist to interpret it. Now, what if the patient’s brain is bleeding? We are wasting crucial time, and the patient is at a real danger of suffering an irreversible damage. With our solution, the AI can skim quickly through many other CT outputs and can alert when there is an emergency or crisis. Our product without a doubt can save lives. Moreover, women are going through mammography every other year to prevent and detect breast cancer. Most of the time there is nothing wrong, but on rare occasions, there are signs of cancer. The big problem occurs when a radiologist misses these signs. In Europe, for instance, the law says that every mammography
has to be interpreted by two radiologists in order to reduce these unfortunate cases. However, in most places, there are not that many radiologists, so in most cases, AI can be used as the second interpreter, and in cases where there is a conflict between the interpretations, the case is then transferred to a second real radiologist to decide. With our products, a lot of mistakes were detected early and saved lives with these women getting the right treatment.
What has changed in the world in recent years which made products such as yours cover these huge gaps in modern medicine? To be honest, I assume doctors were aware of these gaps and their lack of capabilities. I am not so sure. People are shortsighted. You always hear about people who dismiss climate change or think that they can postpone their diet for ten more years. People are not that good at recognizing trends and detecting real dangers. There are several trends that have been quickly developing recently. The first one is over two billion people who joined the global middle class and can afford medical care. There are also many medical devices which are being produced by companies like J&J, Philips, etc. However, one thing which does not increase like we would have hoped is the number of doctors. To make things worse, 25% of the available doctors will retire sometime within this decade. On the positive side in many parts of the world, a huge amount of data was accumulated. In most places around the world, this data is unusable for various reasons, but in other parts, like Israel, this data is digital and usable since it is organized and concentrated. Finally, all the
latest development in the field of machine learning on one hand and on the other the power of the modern computers together with the availability of cloud computing, that also assisted a lot. All in all, these are exciting times.
“We have unusual personnel here at Zebra. These guys could have worked in so many other companies and make much more money, but they decided to spend their time and wisdom to save lives.” Recently CB Insights picked Zebra Medical as one of the 250 most promising Digital Health startups. Your social impact, as you described, is amazing. What is the main factor in your opinion that made you so successful? Our team hands down. We have unusual personnel here at Zebra. These guys could have worked in so many other companies and make much more money doing the usual of making people click on ads, play a mobile game, or move virtual currencies around, but they decided to spend their time and wisdom to save lives. May I use this interview to invite more developers to join this exceptional team?
By all means! Thank you. Seriously, this is very emotional for me to experience every day. Other than that, we have access to the exceptional data, and that immaculate team can create more and more products without pausing any of the company’s other activities because the data for the next projects is patiently waiting for them to use it. Like every other startup, we have made many mistakes along the way and even more because we are the first of our kind. But we learn from these all the time and improve.
“A lot of the areas in medicine which needed physical care in the past are being done differently nowadays.” Generally speaking, what is in your opinion digital health? There is a whole new echelon in the field of medicine, which is called digital health. This echelon is based on data. A lot of the areas in medicine which needed physical care in the past are being done differently nowadays. For instance, in the past a urine test was done traditionally, but nowadays a fellow Israeli company healthy.io enables the patients to do these tests at home themselves. The same goes for pathological and radiological tests. Many technological companies have recently transferred the physical part of these tests to data, and
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there comes a smart algorithm to analyze and interpret it. COVID-19 has pushed it forward, just like people who were very adamant to buy goods online are now using eCommerce sites daily because they have to. Hospitals and healthcare services are using digital solutions like ours because women are in quarantine and cannot come to do a physical mammography.
“Only 2-3% of the hospitals in the world are using AI for interpretations. The rest has only heard about it in conferences.”
Let’s put COVID-19 aside for a minute and talk about other factors that made digital health a norm.
Will this fascinating trend continue, or have we reached the limit?
There are psychological factors and physical factors. The millennials who grew up with a tablet in their hand have no problem accepting the concept of talking to a doctor via video conferencing tools. Older generations do still perceive it as problematic and irresponsible. Same thing goes for the new generation of doctors, who are millennials themselves, and they feel comfortable as well with this concept. Therefore, the psychological barrier with time will be reduced more and more. On the other hand, today’s technologies and bandwidth whether it is 4G or the newly adopting 5G enables video conferencing to be very firm, trustworthy, and people believe it can be a platform to get medically checked by their doctor. Moreover, there are technologies these days which can analyze your eye via video conferencing as the quality of the broadcast is high enough. These are physical barriers which are being reduced nowadays, and together with the psychological barrier reduction, are pushing the implementation of digital health products forward.
We have only just begun. Unlike eCommerce, where the only thing blocking it was the psychological barrier I have previously mentioned, and I will explain again. Everything can be bought nowadays online, and the only thing left to see is how many people will actually do it. In the field of digital health, the reality is completely different. In the US, for instance, the healthcare system has turned digital only a few years ago. There were no digital records of patients, and that means there is no data to analyze, i.e. turn to digital solutions or use AI. Most digital health providers are startups in a relatively early stage. In our area I can tell you that only 2-3% of the hospitals in the world are using AI for interpretations. The rest have only heard about it in conferences.
“Our vision is to become one big digital lab for every visual medical thing.”
What is next for Zebra Medical? Our vision is to become one big digital lab for every visual medical thing. We started at several radiology related areas since that is the biggest and toughest domain. We developed from analyzing CTs, to x-ray, and then to mammography. We have yet to touch even the worlds of ultrasound and MRI. There is much work to do as there are dozens of other products we are developing for radiology before we will enter these new domains. Recently, we introduced a new tool in the field of orthopedy due to a demand from J&J to make operations to change implants more efficient. It seems that nowadays they implant in the knees and shoulders based on trial and error as they cannot know the size before the patient is asleep, and they cut into it. With the use of AI, we will reduce the time of the operation significantly.
“Digital tools will free the doctor to concentrate on their main tasks and not on other low priority tasks like typing stuff into their PC.”
Where do you see the world of digital health in the year of 2030? I love to give a metaphor from the world of air travel. When you fly, and suddenly the plane gets into turbulence, you wonder what the pilot is doing. But truthfully the pilot is asleep. The only time pilots are needed is in takeoff and landing. The rest is being done by the use of autopilot. And there is nothing wrong with that. The flights are great, and there are more flights (unless we are talking about COVID-19 times) than ever before. Medicine will be almost the same. Doctors will be able to use many tools, which will provide information about the patients before they even see them. Many tools will dismiss the patients’ need to go physically to the doctor’s just so they will not catch anything while waiting for their appointment. All these tools will free the doctor to concentrate on their main tasks and not on other low priority tasks like typing stuff into their PC. There are many things to be excited about and a bright light at the end of the tunnel.
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INNOVATION SAGE
BARCE
ELONA
Barcelona
INNOVATION SAGE
Great Food, Great Sports, and a Great Place to Innovate
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Author: Tal Berman
Author: Eran Shlingbaum
Contributor: Soly Sakal
RHOMBUS Global Consulting
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hat better way to start talking about Catalan innovations than by talking about all the amazing food, which these easy going people have invented. From Chupa Chups suckers, to Seafood Paella, and from Barceloneta Bomb to Vinegar Cruet. These iconic foods are not the only thing that took the spotlight in one of the most famous cities on this planet. In the past decade it has mostly been known for its football or soccer (depending on where you live) team that has been a magnet for publicity. However, slowly but surely, Barcelona has become one of the most innovative cities in the world. Ranked 27th in Startupblink’s startup ecosystem ranking and 21st in 2thinknow innovation cities index, the big metropolitan on the Mediterranean’s western shores has been creating waves and bringing sustainable entrepreneurial vibes. “Barcelona has always been the most innovative, open, and technological city in Spain for a long time,” claims Soly Sakal, a local veteran entrepreneur, consultant, and investor. “After the Olympic games in 1992 the city was upgraded, and we enjoyed a wonderful journey for the past 25 years in that regard. Moreover, we have a great ecosystem for new businesses. Barcelona is by far the top city in the world for international students, and that in itself provides a huge advantage especially in comparison to other cities across Spain.” According to Catalonia Trade and Investment, a public agency that works to attract foreign direct investment to Barcelona and Catalonia, there are 1,500 startups operating in Barcelona as of today. A wild number of 64% out of these are deeply involved in today’s technological trends, such as cloud computing, AI, big data, etc. Slowly but surely, the city, which attracts many foreigners to start
their undertakings in it, is becoming the 3rd most popular among entrepreneurs surpassed only by Berlin and London. We tried to understand the source of success this city has amassed during this past decade in becoming one of the leading hubs in the old continent and the entire world.
The Luring Lifestyle Does Its Trick Being one of the most attractive cities in the world in any sort of index, Barcelona has always attracted foreigners to its borders. “The lifestyle in Barcelona is amazing,” Soly says. “You have wonderful beaches, and just one and a half hours drive away, you have great ski resorts. Barcelona is a small city, easy to find your way in it literally. Moreover, our location is great. We are relatively close to everywhere.”
“It is always important to attract talent. Talent will come if there are opportunities, not only for the quality of life.” Salaries in Barcelona perhaps are not as high as they are in London or Berlin. In a report by Mobile World Capital Barcelona from 2019, while the average annual salary for software engineer in London is €64,000, and in Germany €61,000 Euros, in Spain it is only €40,000. But despite this huge difference, the cost of living in Barcelona is far more reasonable in a way that compensates for that. The education and healthcare systems are great, and of course weather is ideal to go to the beach
in the summer. More importantly though, a clear example for its attractiveness in bringing in highly talented people is a BCG report from 2019 ranking Barcelona as the 5th most attractive city for digital experts. That in itself represents a huge talent pool of highly skilled people, 32% of whom according to Catalonia Trade and Investment, have a technological background of some sort. But a rare and astounding figure brought by the same agency is that 15% of the founders of startups in Barcelona are foreigners. “It is always important to attract talent,” Soly tries to explain this important concept as we are coming from a country that relies almost completely on locals. “Talent will come if there are opportunities, not only for the quality of life, which is important— do not get me wrong—but far less. Talent also brings more talent; it is a snowball effect. Metaphorically speaking we have the hardware; now the software is how to attract brains.”
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Great Education with an Iota of Creation
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But foreigners are not the only people dipping their feet in that pool. Three Barcelona based business schools exist in the FT business school rankings.
“The academic institutions are not only providing excellence in education but also an ambience for talented people to network and work together.” IESE Business School ranks 13th in the global ranking of 2020 and came 6th in the European rankings back in 2019; ESADE Business School ranks 24th in the global ranking of 2020 and came 13th in the European rankings back in 2019; and lastly while EADA did not rank among FT’s top 100, it did rank 28th among Europeans business schools in 2019. So, with three tier 1 business schools in the city, the ability to recruit high profile business graduates is very promising. “These institutions are not only providing excellence in education but also an ambience for talented people to network and work together,” Soly, who joined IESE last year to teach and lead a few programs says enthusiastically. “They have also created great vehicles to start new companies as well. Also, with the help from a great chain of alumni, these schools have greatly assisted in the growth of the local ecosystem.”
Money Flows like Water in the Besòs River However, there are clearly other factors to support a technological hub. Perhaps the most important is the access to venture capital. According to Catalonia Trade and Investment, there are over 100 venture capital firms located in Barcelona. Some are of foreign investors originated in the likes of the US and Germany. For instance, Glovo App, a LogisticsTech startup, raised €150 million a year ago in a series C funding round, led by investors from Abu Dhabi and Switzerland. According to the Mobile World Capital Barcelona previously mentioned report, in 2018, approximately 46% of all VC deals in Spain were done in Barcelona for a staggering amount of €871 Million. Of course, this cannot exist without the support the city grants in itself in order to attract these entrepreneurs and not lose more ground versus the up and rising startup scene in Madrid. On the country level, there are several packages and the ability to secure visas easily for foreign entrepreneurs who wish to start or move their business to Spain. Bureaucracy seems to be less than an issue as it has been in the past, with the ability to open bank accounts quickly, easily, and inexpensively. The city itself assists entrepreneurs as well with its special agency Barcelona Activa at the forefront offering advice, training, support, and networking. Moreover, the city converted an old industrial zone, El Poblenou, to a new vibrant area for startup and high-tech companies called: The 22@ Barcelona Innovation District.
Competition with Madrid but this Time not on the Football Pitch Many Spanish entrepreneurs and talented workers are moving out of the country, 7% to a neighboring EU country, whereas 4.3% are moving outside of the EU completely according to the Mobile World Capital Barcelona report. While losing the battle to other countries in much smaller figures than the likes of the UK, where 35% of its tech workers are leaving for a non-EU country, is still acceptable, losing ground domestically is absolutely not.
“Madrid today is in a higher position if we are talking from a businessman perspective, but still it seems more appealing for young entrepreneurs to come to Barcelona.” Nowadays, the startup scene is Spain’s capital, Madrid, which is gaining ground. Startupblink ranks it 35th globally, only eight spots behind Barcelona. While in 2018 only €340 Million were invested in Madrid originated startups, more Madrid based startups were on record than those in Barcelona according to the Mobile World Capital Barcelona report. Does that symbolize the fact that Barcelona is losing its magic? “Competition is always great in an entrepreneurial mindset, and having two hubs in our country is a very good sign.
The problem is that right now we are not really competing,” worries Soly. “Although I am a Barcelona citizen, I can still say objectively that Madrid today is in a higher position than us if we are talking from a businessman perspective. Madrid has made a great change and made itself quite attractive to start new businesses in terms of available opportunities, taxation, and more. While it still seems more appealing for young entrepreneurs to come to Barcelona, honestly Madrid is more stabilized politically, and that reflects on their ability to manage entrepreneurship and innovation much better. For me, I think the huge growth we experienced for almost three decades stopped, and we are in a stage of stagnation.”
INNOVATION SAGE
Finishing Touch of Optimism
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Nevertheless, Barcelona remains a top innovating city in the global perspective with unusual financial support. It will probably remain a hot spot for startups in the fields of wellness, FinTech, and tourism, the city core industrial strengths, and just like any other huge city in the world, there will still be plenty of opportunities to innovate.
“We have been able to attract talent from all of Europe. if you are a young company, a startup, Barcelona is still the place to be at.” “Madrid attracts great talent domestically, whereas we have been able to attract talent from all of Europe,” Soly concludes. “Madrid might prevail in attracting multinational companies, but still if you are a young company, a startup, Barcelona is the place to be at. We will need to be more resilient though, or we will lose the opportunity to remain a powerful hub. Barcelona has everything working for it to become the capital of the entire Mediterranean. We will have to find ways to invest lots of money in new technologies and attract more great international talent. We recently lost some opportunities to the unstable political situation, and that will have to improve, but at the end of the day, I still see a bright future for our city.”