Isabel Maxwell profiles NewACT’s Rafi Ton in her continuing series on investment and high-tech personalities.
The setting for my interview with the energetic Rafi Ton, co-founder of mobile start-up NewACT, seemed very apt for we are in a new café right by Habima, Israel’s National Theater site in Tel Aviv.
NewACT is one of a new wave of innovative mobile companies now coming out of stealth mode. Its chosen arena is user-generated content management. The problem the company solves is the backing up and synchronizing of all user-generated content (contacts, calendar, SMS, MMS, pictures, video, audio, etc.) and other material from mobile phones and online with a superb and simple GUI and no behavior modification. Says Ton, "The software comes pre-loaded and is completely automated for the operators. We give them a free demo account, and it works like a charm."
Rafi Ton is a first for this column in that his background is in business rather than pure engineering or technology. He is an Israeli whose parents came to Israel in the first wave of Russian immigration in the early ‘70s. Although the entire family was engineering oriented, and Rafi spent his army service in landline communications, he wanted to do something more business-oriented with his career. He earned his degree at the law faculty of Haifa University where he specialized in high-tech law, investments and IP (this was the only faculty that had some focus on the Internet at that time, according to Ton) and spent time designing Web sites for family and friends. He subsequently took a job at the law firm of Eitan, Pearl, Latzer and Cohen-Zedek in Haifa, where he specialized in intellectual property law, corporate law and venture capital investments.
It was there that he was introduced to Followap, the provider of instant messaging and presence services that keep community members always connected. He left the law firm to be Followap’s first in-house attorney, VP Asia Pacific and head of business development. Ton managed the expansion of Followap for the next five years through 2005 and formed its key alliances with handset vendors, value added resellers and OEM channels. After a huge and successful installation in Turkcell in 2005, Ton felt it was time to move on.
He left for a stint at Comverse from 2005-06 – " somehow one has to pass through this [Comverse] stage" – where he was the business manager of commercial and business activities for the messaging Impress division.
But clearly entrepreneuring was in his blood, and the size of Comverse and the sheer number of people "involved in every step," began to get to him. During this time, he was carpooling with Yoad Gidron, the CTO of the integrated Messaging & Data Infrastructure division of Comverse, and former co‐founder and CTO of Mobilitec. The two spent many hours chugging up and down Highway 2 discussing the problems in mobile technology, which grew into a decision to do something on their own. They resigned on the same day from Comverse.
An original concept that Ton and Gidron took to Turkcell and for which they received seed money from Cedar Partners (" more because they liked the team"), did not pan out. At the same time, though, Ton was having severe problems in backing up his material from his phone. He and Gidron soon began NewAct to solve this need in an elegant and seamless way – " first for a vendor in Italy and then one in Israel, and now one in the UK, and it snowballed from there."
Rafi Ton
Why, I wondered, did the pair start by going to the mobile operators in Europe, and not the US? " The most important reason," says Ton, " has simply to do with numbers. If you consider the leading US carriers – Verizon, AT&T, Sprint – they are all above 50 million subscribers, which means that they will need huge systems; they will take a longer time to decide, and the process just takes forever. In addition, they always want companies who approach them to have previous customers and good references. No large carrier wants to be the first one to try a service from a company located on the other side of the globe. In the EU, you have tens of potential customers – many of them are small, they decide fast, and distance is less of a problem."
Commenting on location and language – and his wisdom about this is applicable to all companies, no matter what their product or service – Ton says, " When working with US carriers, a company has to have a domestic US presence, with local support with people who speak American. We may speak English, but we do not always understand the language. With mobile operators in Europe, it is much easier to communicate."
There is still an important requirement to have an agent or representative in the relevant country, " but," says Ton, " since both parties are not native English speakers communication is more open and more direct." I found this comment interesting as a native English speaker. What this means is that two non-native English speakers don’t have the ‘codes’ in their blood, so there is less chance of misunderstanding, and the words themselves are taken more literally.
We spoke about the challenges that come with selling to mobile carriers/operators and again why selling into Europe makes sense – "The sales cycle is a long process that can take between two months and 1 1/2 years. During that time you have to visit the customer numerous times. Hence, the cost of sale to customers in Europe is considerably lower."
Obviously, and from experience, Ton believes that Europe is a much better place to start sales for mobile technologies than the US. But he also appreciates that after a company has gained a few customers and has more financial resources, the US carriers should be high on everyone’s radar screen. I have a feeling that NewACT will be a growing footprint on the radars of Europe and of America and the rest of the world too in the not very distant future.
