BOV Passionscape 2.0
The new wave of Israeli start-ups focused on B2C & B2SMB & Passionware
Benson Oak Ventures is releasing our updated Passionscape: outlining the array of Israeli start-ups in the B2C / B2SMB / Passionware space encompassing web3 as well.
Israel is well-known for deep tech in cyber, business solutions and artificial intelligence, and more. However, Israeli founders have also been very active- and hugely successful - in leveraging innovative ideas, technologies - combined with creative approaches and business models - to build global brands around B2C and Digital SMB and now, passionware - tools and platforms that enable anyone to start, grow and scale a business.
Our Passionscape 2.0 includes a new section on Web3 (replacing the previous one called blockchain and crypto). Web3 is a core component of Passionware as an extension of mass-market consumer and SMB platforms -- new economies providing an open place for commerce, underpinned by shared ownership, where a token acts as an orchestrator providing utility and ownership for contributors and investors alike.
The crypto focus in Israel has been mainly on the technology and infrastructure of blockchain but recently we are seeing more Web 3 projects. For example, in the area of crypto wallets, there have been a wave of Israeli companies around MPC including consumer-focused ZenGo and enterprise plays involving exits (Curv, Unbound) and Fireblocks raising at $8 billion. Layer-2 blockchain infrastructure company Starkware recently raised at a reported $6 billion valuation.
Below we list details on how we categorize these verticals and our main criteria for company inclusion. We apologize in advance for any omissions. Please let us know ASAP about companies that you believe should be included!
And most of all if you are a very early stage start-up in B2C, B2SMB, and Web3, we would love to hear from you!
If you are interested in learning more about Web3 and hearing from founders in the space, we are hosting a three-part Series on Web3. The first event is coming in a few weeks — “Three is The Magic Number: Understanding Web3 and The Platforms of The Future”
For more info and details on the event, email us at celina.mukarker@bensonoak.com
Before we get to the general FAQ, let's start with the basic question -
Why do we group B2C, B2SMB, and Passionware together?
While these categories can have different value propositions, user personas, and business models (as is the case with everything under "B2B"), they tend to share important characteristics. Most entrepreneurs who start their own business (so-called SMBs) - whether a "lifestyle" business, a tech start-up, or a passion-based business - think, act, and purchase the same way as mass-market consumers when it comes to choosing a product to drive their business. As a result, we see the convergence of many attributes for what can be termed a "consumer" and "prosumer". This is even more pronounced in Web3 startups where convergence ties to the business models and shared ownership.
Product. B2C and B2SMB products share qualities of easy-to-use, great UX and UI, and give users a sense of ownership and control - whether it is an app, service, product, or core infrastructure. SMBs do not typically have a CTO or CIO to vet and implement internal tools and products. Therefore, B2C and B2SMB-focused companies equally require product and leadership teams that have the mindset of "direct to consumer" and ensure the development of lightweight product offerings. This is why so many such companies are able to sell to both user bases with very similar product offerings.
Brand. Consumers and Prosumers both want and rely on a brand they feel they can trust for purchase decisions. This is even more true in Web3 products focused on community.
Customer Acquisition. Most B2C and B2SMB companies do not have inside sales teams but must rely on performance marketing, organic and word of mouth (see brand), and great customer support that treats their user base as a community. Pricing and plans must be simple, direct, and enable trials to engender trust and brand loyalty. This mindset again allows companies to navigate both worlds. Again, this is, even more, the case in Web3 where word of mouth and community drive acquisition.
What is PassionWare again?
Read our blog here for the full picture. the TL: DR version —
Passionware = tools enabling the creation of products and services stemming from people’s own creativity.
Passionware represents the new wave of tools enabling anyone to be an entrepreneur, run a business to earn a living, and at the same time, chase one’s passions.
Why is it lumped in with B2C and B2SMB?
Looking at the directional trends of Web 3 and its economies underpinned by shared ownership — Passionware is the convergence of consumers and SMBs.
We see Passionware as covering the dual aspects of
infrastructure and creation tools (for entrepreneurs) and
distribution aspects to the community through marketplaces and platforms
This requires the exact same mindset outlined above - light and easy-to-use product, focus on brand, and scalable customer acquisition techniques.
Why is it its own vertical and color?
Passionware companies enable entrepreneurs to be a digital business (Shopify, Wix, Honeybook, and all types of XYZ-Tech verticals) and in some cases go a step further and also provide a branded platform itself for distribution (Eg Web3) Many passionware companies are basic B2SMB infrastructure and we have placed them in their respective verticals.
We use here a separate vertical just to describe the passionware companies that operate an entire business (not just one department) and/or provide external platforms as well. Frankly, it's an art, not a science! Passionware companies on this list power entire businesses encompassing content creation, artisans, and even dog-walking.
How do you define Web3?
We see blockchain as having a key role in the evolution of the Passion Economy as an enabler of entrepreneurship and currency for passion-based economies. The use of digital branded currencies and incentives will foster more synergies and participation between creators and followers. The use of new incentives and community involvement will serve to complement mass-market customer acquisition and reduce reliance on performance marketing and inside sales teams. These decentralized micro-economies will not only support the new passion-based entrepreneurs to make a living but also have the potential to grow into macro-economies whose branches foster scale from contributors to the ecosystem at multiples levels.
What are the criteria for inclusion?
We have generally applied the criteria of either having significant funding (greater than $1M) or some market traction to be included. This is also a function of companies that are on our radar through deal flow, as well as the cooperation of our team and venture advisors. We are open to new suggestions and comments. Feel free to add a comment below or reach out to celina.mukarker@bensonoak.com
Please do share this blog with friends, colleagues, and especially those outside Israel. It will behoove the entire ecosystem if the rest of the world understands and appreciates the new wave of start-ups focusing on building global brands for consumers and entrepreneurs of all types.