Israel Innovation 2.0

Emblaze Mobile, a subsidiary of Emblaze Ltd., announced yesterday that it was ending its efforts to bring the First Else, its linux-based smartphone, to market.

The announcement had been expected for quite a few months, especially when it failed to meet its Q2 goal of partnering with a wireless carrier. The phone, which debuted in London last November, was hailed for its user-interface which made it easy to access all of the phones functions and features with just the scroll of the thumb. The quality of the device, from the phone to the camera and everything else, wowed those who got to play with it. In fact, it was named the First Else, because it wasn’t just a smartphone, it was something else.

Perhaps the most disappointing thing about its failure is that it was a completely Israeli device. All the hardware and software was developed in Israel. Had it taken off, it had the potential to create lots of jobs in different sectors and to revive Israel’s long-lost manufacturing industry. There’s so many things it could have done for Israel’s tech sector and the Israeli economy overall. On a personal level, I was looking forward to the day when I could sport the First Else and show it off to friends and acquaintances here and abroad.

Instead, it’s failure is a reminder of the poor condition Israel’s tech industry is in. When I first read Emblaze’s announcement yesterday, I, of course, went on to Twitter and shared the article. I noticed afterward that a few friends had already shared the news with me, and one’s response was “add it to the list of magic tricks coming from Eli Reifman’s sleeves. Now you see it, now you don’t.”

Eli Reifman, the current President of Emblaze, co-founded the company in 1994, and is the one mainly responsible for growing it into a publicly traded company. At its height, the company came close to breaking into the FTSE 100. The company’s glory days didn’t last long though due to many factors.

One reason for its most recent failure with the Else is the approach the company took with developing it. In 2009, Emblaze shareholders tried to take control away from Reifman in protest of the Monolith project that he envisioned would “transform the world of mobile phones” when it launched in 2010. While a visionary with seemingly the right ideas, Reifman’s role in the management and execution of the project was less than stellar.

Unfortunately this isn’t the only such story and is connected to the performance of the rest of the industry. For all the success that Israel has had in innovation on the startup level and for multinationals (R&D for them), it is not sustainable. All of the conferences that I attended this past May and June reflected that in the discussions that took place. The solution is to try to grow big FTSE 100 companies but to do so requires good managers who can transform their startups into large companies and then lead these companies. Emblaze’s story reflects the current and past failures of the industry, and, if things stay the same,  the future of the Israeli tech industry.