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Israel start-up scenes – innovation on the edge

In 2009, the best-selling book “Start-up Nation: The Story of Israel’s Economic Miracle” brought the incredible success of Israel’s high-tech and start-up sector to the world’s attention. Today, Israel is still ranked #1 by number of start-up businesses per capita.

In the past four months, I have had the privilege of living and working in a Kibbutz, while meeting Israeli start-ups and VCs to learn about the secrets of this tiny entrepreneurial paradise and experience the Start-up Nation for myself. From what I have seen, most start-ups are built with international markets in mind from day one, given the small domestic market (of 7 million population). The most popular overseas destinations are the US and Europe due to the country’s historical ties with these markets. In the last couple of years, Israel has started to attract increasing interest to and from Asia, both for funding and as an expansion target market. In July 2016 Playtika, an Israeli Mobile Gaming company was acquired by a Chinese consortium for $4.4 billion.

One way Israel is working with Asia is via technology transfer. Both universities and private sector businesses have been developing bilateral connections in Asia, tapping into local talent to drive development of new technology. Once the product is ready for commercialisation, the local Asian partner is then ideally placed to assist market launch

Israel VS Silicon Valley

Why Israel and not Silicon Valley? This is the question lots of start-ups ask before coming to Israel. There are strong strategic reasons – given the historical ties and geographical proximity, Israel can be seen as a gateway and testing ground to the European and the US markets. Currently, 300 multinationals have its R&D centers located in Israel. Imagine if your start-up wants to arrange a meeting with Google or Microsoft, it may take you some time to get an appointment with a junior manager. As an entrepreneur in Israel, if you send the word out, you could quickly arrange a meeting with the Head of Research to pitch your ideas!

For Australian startups, if you are still at the early stage trying to test the technology, Israel will be an ideal place. Here you can share and learn from leading industry experts, modify your beta products with industry inputs, and perhaps test your product with a smaller population. If your product is ready to launch , I would say Silicon Valley will be a better choice given its willingness to accept disruption.

Start-up culture in Israel

The authors of Start-up Nation argue that Israel’s entrepreneurial success owes much to the culture of the Israel Defense Forces (IDF), in which service is mandatory for most young Israelis. IDF service fosters a culture of taking responsibility in a chaotic, un-hierarchical environment [Hebrew: Balagan] and achieving objectives with minimal guidance from the top through creativity, improvisation and breaking the rules if required.

All entrepreneurs can benefit from the prevailing culture of creativity, disruption, challenging authority on merit, absolute trust in partners, and surviving through adversity and uncertainty.

During my time in Israel, I was fortunate to meet and socialize with current and former members of the IDF, and I was greatly impressed by their resourcefulness and resilience.

In practical terms, Israel has a healthy and mature start-up culture and ecosystem. With some help from government initiatives in the early 2000s Israel developed a vibrant start-up culture; plentiful co-working spaces, and events for entrepreneurs and VCs all throughout the year. There is a strong sense of camaraderie and everyone is happy and willing to share their experience and knowledge to help others to grow and succeed.

SOSA Landing Pad for Australian start-ups

Thanks to Austrade Israel, I also visited the first Australian Landing Pad in Tel Aviv – SOSA. SOSA is a unique combination of entrepreneurial community, co-working space, and Technology Park.  It is a relatively small space with 30 start-ups currently working onsite. SOSA has been chosen as the Tel Aviv landing pad for Australian start-ups, and has a storied reputation as the ‘town square for the innovation industry’.

The Landing Pad will enable Australian start-ups, entrepreneurs, researchers, corporates and other innovation stakeholders to engage in Israel’s rich ecosystem of innovation and take their companies to the next level, particularly through participation in one or more initiatives.

SOSA Initiatives

There are currently two main initiatives:

1). Office Space for visiting Australian start-ups for up to 90 days free of charge in SOSA. During your stay, Austrade will provide you with market briefing, introductory meetings to fellow entrepreneurs, VCs, and other business development needs.

2). Education. The Austrade landing Pad is working closely with Australian start-ups to develop tailored made one to two week educational bootcamps. The bootcamps are organised by theme (vertical stream) with the purpose to build a cohort of Australian entrepreneurs. The bootcamp workshops are subsidised by Austrade and entrepreneurs pay for the travelling expenses which some could be claimed back through the Export Market Development Ground (EMDG).

Applications are now open for the Tel Aviv Landing Pad for Australian entrepreneurs to experience one of the best start-up eco-systems in the world. To learn about the Landing Pad program visit www.australiaunlimited.com/landingpads and for more information about the Landing Pad in Tel Aviv, please contact Omri: omri.wislizki@austrade.gov.au.