July 24 (Bloomberg) -- When air-raid sirens sounded across central Israel this week, programmers at BioCatch Ltd. joined thousands of their neighbors in rushing to the bomb shelter. Unlike most others, the BioCatch team made sure they had their laptops in hand.
“We have no alternative but to keep going,” said Benny Rosenbaum, chief executive officer of BioCatch, a cyber-security startup whose coders spent their time in the shelter working on a project for a Brazilian client.
With thousands of Hamas rockets targeting Israel and many flights into the country canceled due to the fighting, technology workers have had to find creative ways to adapt. Though the industry’s travails may seem small in a conflict that has taken the lives of at least 650 Palestinians and 32 Israelis, they illustrate the stark realities of operating in a country perpetually at risk of war.
Since tens of thousands of Israelis in the army reserves have been called up for service, tech companies must learn to manage without key employees. Tech investor Jonathan Medved said top people at one company he’s backing were ordered into battle just as managers were completing an important business proposal.
“You’re trying to make a deadline and all of a sudden two or three of your programmers are in Gaza,” said Medved, CEO of Jerusalem-based OurCrowd Ltd., a crowd-funding site. “But Israeli companies are set up to handle reserve duties so they find a way through.”
At Tel Aviv-based BillGuard Inc., which helps consumers identify mischarges on their credit cards, programmers were on a conference call with Amazon.com Inc. working on an application for that company’s new Fire Phone when air-raid sirens sounded.
“The guys at Amazon were in shock,” said Raphael Ouzan, a BillGuard co-founder. Nonetheless, the work continued, and when Amazon’s phone starts selling on Friday, BillGuard’s app will be on it, Ouzan said. “They don’t care if there’s a war or not, so we keep on coding.”
Ouzan said he had to cancel several meetings in Tel Aviv after foreigners postponed visits. The U.S. Federal Aviation Administration on July 22 barred American airlines from flying to Israel for almost two days, and European officials recommended a suspension of flights, after a rocket fired from Gaza landed about a mile from Ben Gurion International airport. The FAA has lifted its ban, citing “significant new information and measures” taken by Israel.
Tourism has been less resilient than tech. About 30 percent of visitors expected this month have stayed away, said Ami Etgar, general manager of the Israel Incoming Tour Operators Association. Hotel occupancy is as low as 30 percent in some areas, the Israel Hotel Association estimates, and an industry that welcomed a record 3.5 million overseas visitors last year is faced with lasting damage.
“There is a major impact on tourism and other consumption-oriented industries,” said Tal Zohar Avda, CEO of FXCM Israel, a currency trading house. “But most economic sectors continue to operate as usual.”
Rick Mann, head of the mergers and acquisitions department at GKH Law Offices in Tel Aviv, said the pace of transactions in technology is likely to be unaffected by the fighting in Gaza.
“From past experience, we don’t usually see a dramatic change,” said Mann, 51, who worked on the sale of Waze Inc. to Google Inc. for about $1 billion last year. “The decision by certain airlines not to fly into Israel can have a negative impact just as a practical matter, in terms of conducting meetings. But we don’t expect that to be a long-term problem.”
At Easy Social Shop headquarters on Tel Aviv’s ritzy Rothschild Boulevard, a team of six workers was holding a heated discussion about the company’s growth strategy when the blare of sirens sent them running for the stairwell.
“Our work continues as normal,” said founder Nissim Lehyani, who served in a military-intelligence unit from 2000 to 2003. “But every once in a while we have to switch gears.”
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