Beating the MetaCafe Curse: Israel finally wins a consumer Web victory over the Valley

By Sarah Lacy , written on November 28, 2012

From The News Desk

Israelis are not particularly shy people. So why hasn't there been more ballyhooing about today's news that MyHeritage bought early Valley rival It wasn't until just now as I was catching up on the day's news that I even saw it.

How is that possible? I know a lot of Israelis, including MyHertiage's founder Gilad Japhet. Forget the $25 million funding round that accompanied the news. It's the purchase that's a notable psychological victory for MyHeritage and Israel's tech scene.

I first met Japhet back in 2009 at his office in Bnei Atarot-- a town that has more chickens than people. (That's a picture I took of Japhet on that trip, above.) It was one of several reporting trips I've done to Israel, and at the time I predicted that MyHeritage would be the rare Israeli consumer Web success story, featuring Japhet in my book on international entrepreneurship. It wasn't the popular choice-- far from the heat of the hip Tel Aviv Web scene. What's more: I said it could be the one to break something called the "The MetaCafe Curse."

MetaCafe was YouTube before there was YouTube. And its ignominious failure became shorthand for a frustrating pattern by which Israelis would start a company and a better-funded, better-designed Valley version would do it better and win.

That was the early narrative with MyHeritage and as well too. While was raising funds at a heady $100 million valuation, Japhet could barely keep his doors open. It scared Japhet. But he did what good entrepreneurs do when they are scared. He dramatically changed the version and acquired clone sites in other countries to bolster his lead. He acquired teams who could excel at UI and design too. It's interesting that Geni (and Yammer) founder David Sacks is joining MyHeritage's board as part of the likely small deal. It's a sign of how much Japhet has always respected his once-presumed conquerer and how much Sacks respects what Japhet has done.

The genealogy battle has long since shifted from a war between Geni and MyHeritage to one between MyHeritage and Still, having talked to Japhet during those early days when everyone was saying Geni would destroy his baby, today's acquisition had to feel pretty good.

The knock on Israelis is that they excel at solving very hard problems, but design and UI is their kryptonite. Even after MyHeritage focused on it, Geni still had a better UI. Japhet won out through sheer, rabid persistence.