The London Business School ‘Start-Up Nation’ Trek
For most of us 23 LBS students who embarked on the Tel Aviv Trek over spring break, we had very little idea of what to expect on our trip to Israel. Some of us had developed an image from what we had read or seen in the media, but few of us could be confident that the image reflected reality. We were certain of one thing, however, which is that Israel is home to one of the world’s largest and most dynamic start-up communities, and we were all eager to get to know it as well as possible in the span of four days.
A few facts first: on a per capita basis, Israel leads the world in the number of high-tech start-ups and the size of the venture capital industry. In 2015 alone, tech firms in Israel raised over $4.4bn in venture capital investments, a figure that does include the sums invested by big tech firms such as Google, Facebook or Oracle. The success of Israel’s technology sector can be attributed to a number of factors. Among of the most frequently cited is the skill-set taught and honed by the Israeli Defence Force (IDF) and the networks developed therein, particularly in its elite intelligence and tech divisions. Some of the brightest Israelis are selected right after school to join some elite military units where they develop deep tech skills, which enable them to start-up their own ventures afterwards be it in enterprise SaaS or cyber-security. Other factors include Israel’s isolated but close-knit community, and the society’s comfort with taking risk.
With a population of only 8 million, few natural resources, and a turbulent history, Israel has had to be creative in developing a successful economic base. This creativity is omnipresent in the start-up community. As Francisco Del Rincón Villalpando, an MBA 2017 participant put it:
“What surprised me the most is the innovation. Israeli entrepreneurs are not mimicking other start-ups around the world, they are leading the innovation scene and exporting their solutions to every corner of the globe.”
Our trek leaders, Sivan Ben-David and Michael Vardi, both MBA2017s, organized 7 meetings, which included several start-ups, and a prominent VC firm. At times the Mediterranean climate was difficult to ignore. The sun and sea beckoned us to sit back with a drink and enjoy the surroundings, but we had a full schedule and no meetings we wanted to miss. As we soon learned, there was a lot of potential to turn the meetings for future career opportunities. Ashni Shah, another MBA 2017 participant noted,
“The start-ups were always keen to take on interns and full timers. But more so, I think business students could also gain great support and guidance from this network if / when starting up their own business. People were always willing to help and give feedback. It is a great resource to have. ”
Our group first met with Weissbeerger, a fast-growing company that combines software with a suite of hardware products that enable breweries to have more access to bar operations and consumer behaviour. The following day, we enjoyed an insightful presentation on early-stage VC investments from Eric Schmidt-backed Innovations Endeavors. This was followed by a panel with the CEOs and CMOs of four post investment start-ups and an introduction to Similar Web, a market intelligence and web analytics firm. Our meetings were rounded out the following day with presentations by 8200 Alumni, an incubator for one of the IDF’s most elite units, as well as Uber, and WeWork. For those interested in med-tech there was also a meeting with Syqe Medical, a new company producing medical marijuana inhalers.
Our meetings highlighted the diverse nature of the start-up community in Tel Aviv. Not only was the nature of their businesses so varied, but so were the teams. During our visits to the different companies, we came across individuals from around the world who came to Tel Aviv to seek opportunities in existing start-ups, or to create something new for themselves.
Thankfully, our packed meeting schedule was coupled with an equally intense ‘play’ schedule that immersed us into Tel Aviv’s pulsing nightlife, and allowed us to explore Israel outside of the capital. We visited Jaffa, an historical port city and current suburb of Tel Aviv, as well as Jerusalem. We were also fortunate to be in Israel during its Purim festival, a holiday celebrated with street festivals and weeklong fancy dress parties.
Despite the evident success of the tech start-up industry in Israel, there are a number of challenges going forward. Israel has had little success in transforming its many start-ups into major companies on the scale of Google or Cisco. This is the most evident challenge especially given that the primary market for most Israeli start-ups has been the United States, so reaching scale should not be an impediment. This possibly speaks of the strong technical skills in the start-up community but also of a growing need for business skills in the founding teams to build customer facing companies. The way things are currently heading, there is little doubt that greater success is just a question of time.