If you're the CEO of a "hot" consumer Web 2.0 start-up, your next move is to relocate to Silicon Valley! At least that's according to 2 experts in this area: Metacafe CEO, Eyal Hertzog, and Danny Cohen, a partner at Gemini Israel Funds.

Hertzog mentioned how his company got surpassed by YouTube because he and his team out of Israel did not understand the video widget and MySpace phenomena. On the engineering side Hertzog pointed out that it was a huge burden for his company to hire talent. But he eventually did learn from his mistake and is now located in Palo Alto! Cohen

"We as a company has suffered a lot for doing that move too late [...] When you work from Israel and you're an Internet start-up, you miss a few important things [...] When we wanted to hire an engineer we could not find someone we could learn from. Because no one in Israel had experience with operating a web site in the order of magnitude of Metacafe [...] And then we saw that thing from Israel called MySpace and it looked weird (it was 4 years ago) [...] And then you read about this widget economy and you don't really get it because you are not in that reality. And then we saw a competitor, called YouTube, that came with this thing, a video widget... and we thought why would they do that... someone can use that widget and put it on their own website and they'll loose the visitors... and we thought they made a big mistake! [...] And you can't expect to do something which is blend into the new Web 2.0 culture without living it. It's not going to work"

Hertzog video after the jump.

Eyal Hertzog Bio:
Prior to co-founding Metacafe, where he drives product innovation and content strategy, Hertzog co-founded Contact Networks in 1998, one of the first interpersonal, professional online networks. Previously, he worked as an application marketing manager for serial networking startup Class Data Systems, which was acquired by Cisco.
He serves as an advisor to several US and Israeli high-tech startups on strategy, product roadmaps and technology architecture, and worked with Israeli venture capital firm Millennium Capital Venture as an investment advisor.