Dov Moran is no stranger to the Israeli press. Nevertheless, he has only one news item in his office, which he presents after a feverish search, when the topic of capital markets arises. The article is a study published by Ma’ariv, in January, 2012, about the failed start-up Modu, which was led by Moran, after a failed fundraising attempt on the Tel Aviv Stock Exchange (TASE). The final collapse of Modu took place more than a year before the publication of the article in Ma’ariv, and most of the correspondents who covered the company had already forgotten about it. But the timing was not coincidental.
“They were very obviously getting at me,” said Moran of the article in an interview with “Globes” on the occasion of the iNNOVEX 2014 conference. The connection between the article and the Israeli capital market does not stem from Modu’s failure on the TASE, but rather from the fact that Ma’ariv was, at the time, part of Discount Investment Corporation, a subsidiary of IDB Holding Corp. Ltd. (TASE:IDBH), which was controlled by Nochi Dankner, who, until recently, was one of the biggest players in the Israeli market, and whom Moran had spoken out against in an interview he gave to the press in the summer of 2011, regarding the social justice protests.
Whether the sense of persecution is rooted in borderline paranoia, or whether the article was, in fact, payback from Dankner, mention of the Israeli capital market brings forth emotionally charged, and extremely critical, statements from Moran.
“The Israeli capital market has a systemic problem that affects the entire Israeli economy, pension funds, and high-tech,” he says, “The regulation is flawed, and has created a crazy situation for the Israeli economy, in every respect. There is no investment process that encourages entrepreneurship and technology, or even just intelligent investment. Other than a select few who have understood the formula and how to use it, for their own personal gain, no one benefits from it.”
“I am sorry about Nochi”
One of the notable heroes of the capital markets, Nochi Dankner, has lost his fortune. Do you think there is a chance things will change?
“The truth? It saddens me. I am sorry for the man. I hope he will find his way in a more modest life. It will be okay, and will bring positive outcomes one way or another. But the fact that it is happening, this is a good start for the change that is needed. The question in Dankner’s case, and others, is, why did it happen? It is not because he is a bad person, but because he was allowed to do it. But recent developments in the market inspire optimism, because as soon as you begin asking why it happened, that’s the beginning of the solution.”
These days, Moran can be found in Moshav Yarkona, in the Sharon region, and our meeting takes place a few hours after the monthly “Barbeque Day” that takes place in the yard. Today, Moran operates out of the offices of the start-up company Comigo, where he serves as an angel investor, in every respect. He counts 15 companies that he is involved with, half of them as an entrepreneur, and the others as an “involved” seed investor, as he describes it. “My investment stats are pretty good,” says Moran, “despite that fact that I have had to close a few companies.”
The blossoming of the memory market, and the generous multiples that companies in the field are benefiting from, do not cause him to dwell on M-Systems, which he sold to SanDisk at the end of 2006 for $1.6 billion. Today, he says, “Microchips and I have grown apart; I don’t deal with it anymore.”
Still, the M-Systems people are in the background. Many of the companies in which he invested were founded by M-Systems alumni. One company founded by a former M-System employee that Moran did not invest in, much to his chagrin, is Waze. One of the company’s founders, Ehud Shabtai, worked at M-Systems.
After his experience with KeyView, Moran is convinced that the world of PCs is nearing its end. He attributes the tragedy he anticipates for the desktop computer to Microsoft and its operating systems. Microsoft, in his opinion, has turned into an institution that preserves what exists, and does nearly no innovating.
According to Moran, “Microsoft did such a terrible job with their new operating system that they deserve that Windows 8 should disappear, and, along with it, the desktop computer, to be replaced by tablets, smart set-top boxes, and laptop computers, which will primarily serve professionals,” he says, and launches into an assault on the software giant from Redmond.
“What I can’t understand is how Microsoft messed up with Windows 8. They had five years to buy iPads and see how to make a product that works quickly, comfortably, and easily, without viruses or complicated installations. I have no doubt that they did not bother to buy a single iPad in order to see how an operating system should look.”
Wait, you know they’re looking for new CEO, right?
“I have no doubt that if I - or someone else with an entrepreneurial background - were to go run Microsoft, I would be better than the CEO. I’m not bragging, even though it sounds it; I would do better than their current CEO (Steve Ballmer).
“There is an organizational culture of anti-creativity in this enterprise, and anti-consideration of user needs. This is a terrible culture. Microsoft needs to bring in someone from the outside who will change this culture. If they don’t do this, what happened to Nokia will happen to them too.”
When Modu was launched at the mobile trade show in Barcelona, Moran was quoted as saying, “Nokia has no chance and they need to go to church and pray,” a statement that he denied having made, but was actually, in retrospect, quite accurate. Despite the fact that the failure was not related to Modu, Nokia’s value did crash a few years after that “prophecy,” and the company’s mobile operations were bought by Microsoft in 2013 for a fraction of what they were worth at their peak.
“There is one thing that was done well at Microsoft, and that’s the X-Box (Microsoft’s gaming console - S.S., T.H.). Because it was done in separate territory, and Microsoft management was not involved, it is a success,” Moran continues, “People will attack me and say that it is a company that earns billions of dollars, but that is irrelevant. It is a monopoly that has profit every year because the way it was built and created and supported makes it a monopoly, in my opinion, and a monopoly does not need to be good to be profitable.”
I’m happy with what I do
Despite the fact that both Modu and KeyView failed, Moran continues to dabble in hardware. Over a year ago he founded the start-up Comigo, which offers smart solutions for companies that broadcast television over the Internet.
“Comigo began selling last year in Europe, Central America, and Southeast Asia. Not in the US, because the market is dominated by the cable and satellite companies, and you need a lot of money to get into it. It’s difficult to enter the Israeli and Chinese markets for the same reason,” says Moran. “We ended 2013 with sales of $3 million. That’s not amazing, but we hope to reach sales of $15-20 million this year and break even.”
Comigo is not Moran’s only start-up in the world of smart TV. In early January, Moran presented Meet Bob, which is developing a device to transform simple televisions into smart TVs, intended for the consumer market.
Would you consider creating a mobile phone again?
“I will not return to the mobile phone market, at least not from the hardware side. But I have already learned never to say never.”
Moran is currently active in the medical market with Sensible Medical, which raised $17 million in November, 2013, from Boston Scientific, and Moran hopes that he is “on the way to a nice exit”; in a company engaged in diabetes research, Glucome, which is operating beneath the radar with a “very revolutionary solution”; and dental company MedicNRG. In education, Moran founded Learni, a company in which he serves as chairman, which has developed an educational system for tablets.
Recipe for iPad
Moran is also an angel investor in completely different kind of company, a lifestyle company, Kinetic Art , which developed a cookbook app for the iPad called Look & Cook, which is being promoted by Apple, Amazon, and Intel. “I am happy with what I do today. I see a lot of companies, and a lot of innovation. It seems to me that in another five years I will be doing the same thing,” he says.
Is there a chance that you will go back to leading a company as CEO?
“It is possible that in the future I will want to lead a company, if they offer me the job at Microsoft I would leave and go there,” he laughs, “but don’t worry, they won’t.”
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2014
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