Software for enhanced human interaction on the Web

Here is another newborn creature spawned by Mirabilis: a client-server that empowers Internet users to surf in Web sites in groups, and communicate with one another, with one of them leading the group.

Yet net2gether was here before all the others. The company is both built better than the others and doesn't compete with them. net2gether's business model took on several of the favorite elements so loved by investors in Internet companies today: e-commerce, organizational software, Internet-based technical support and distance learning.

Why is net2gether's software N2G of interest to organizations and schools? The reason is that it provides synchronized surfing. Take a virtual friend (or boss, instructor or teacher), and glide through cyberspace together, as he guides you through. The chat window N2G provides enables the "leader" to lead you through the Web's maze or through Intranet guidance presentations, give you explanations and important information. The leader leads the virtual trip. Several channels can be used, and several trips made simultaneously. These capabilities accord N2G at least the potential of reaching the deep pockets of the organizational markets and the prestigious market of distance learning.

How does the company propose to earn profits from these markets? Raphy Ben-Dror has a solution. One target audience consists of smallish e-commerce sites, which can download the software for $100, and promote a combined N2G brand. These sites will be able to use the software to give surfers customer care by taking them to screens providing information about special offers, for example, while holding sales dialogues. Another target audience is medium-size specialized sites that can provide surfers with added value by synchronized surfing. This package is more expensive, as it consists of several channels. It costs a few thousand dollars.

The third target audience is leading sites, which will accord the software their full brand name, and get the interfacing adapted to their sites, a sort of Yahoo!. This is a strategic move and Ben-Dror is unwilling to elaborate on the economic implications. The strategic implications, on the other hand, are obvious: exposure for the software to a large user audience.

The Internet application, together with the business earnings model have given N2G what most competitors do not get: financial backing by major funds at the seed stage. While most Israeli competitors depend on family money and ties, or generous angels, N2G harvested $1.5 million from Bank of Boston's venture capital arm, and from Genesis, which has posted several of the best exits in our market. The financing round is likely to prove part of a larger round of $10-12 million.

However, N2G is somewhat behind the competition. For quite some months, Gooey, U-tok, Multimate and their rivals have working software, each with a number of thousand downloads. In contrast, N2G only went on the air with its software a few weeks ago. With all due respect to the reputable investment, a few months in the Internet sector is a tremendous amount of time, and $1.5 million is not sufficient for penetrating a brand name on the Web, certainly not after the competition has already made its presence felt.

"Globes": You need to make a blast with advertising.

"That's true. Our offices are in the US, we have an American PR firm, and we're planning to go for a combination of public relations and media, and look for a strategic partner."

Net2gether already has a staff of 22 at the company's Haifa development center (working on developing the technology), and in Ramat Hasharon (applying the technology developments), and in Boston (management and marketing). The company is in fact a spin-off of Order-in-a-click. It was set up five years ago by Haifa University behavioral sciences graduate Dr. Raphy Ben-Dror who fell in love with the Internet and decided to abandon academic life to open a virtual grocery to sell records, flowers and similar merchandise to Americans. The idea for net2gether grew out of what he refers to as "a personal incident". "I was with a friend who was looking, together with her daughter, for a present to buy for her husband on the Internet, and had a sudden inspiration." At the time, Ben-Dror was reading about the theory that says many start-ups fail due to the initial ideas. "I personally experienced this," he says. Ben-Dror roped in his brother Dan and the two invested in the venture most of their money.

Ben-Dror believes that his background in organizational development assists him in understanding what surfers want.

Published by Israel's Business Arena on 7 February, 2000