Israel is a hub of innovation and entrepreneurship. According to Fiona Darmon, COO and Partner at Jerusalem Venture Partners, there are 4,000 to 5,000 active start-ups in Israel at any given point in time. This isn’t just happenstance. There are two main reasons for this: necessity and governmental and institutional impetus in the form of incubator and accelerator programmes, wherein a loan of five times the equity is granted, and must be repaid as royalties only if the venture succeeds.
With an area of 20,770 sq km, of which more than three-fourths is the Negev desert, it is crucial for Israel to efficiently and effectively utilise its resources. Thus, innovation is a necessity. There is a strong entrepreneurial spirit, a chutzpah, that encourages one to take risks and accept failure, something Indian entrepreneurs are beginning to understand now.
Israel’s transformation from a water-deficit country to a water-surplus one, with 55 per cent of its domestic water supply coming from desalination plants, making tap water potable, is an example of this entrepreneurial spirit. The technology was developed and improved because it was a necessity.
Learning from Israel
I was in Israel for a course titled “Developing Technology Partnerships between Entrepreneurial Firms in India and Israel” at the Tel Aviv University (TAU). Of the eight companies that made presentations to our class at the orientation, one entrepreneurial venture, called Rootility, had developed a grafting technique to combine stems of fruits and vegetables with roots that were more resistant to the abiotic conditions of a particular area in order to deliver higher yields with lower inputs.
Another venture, Airscort, developed a solution to automate drone operation by inventing an automated docking and charging station. The founder emphasised the importance of having a good team with diverse views. This session explained how being compatible, complementary and diverse are important to the success of a venture. Fiona Darmon also made this point in her lecture, saying that without a good team, a venture won’t succeed despite having a market and strong technology.
Everyone knows everyone
The socio-entrepreneurial network in Israel makes the environment conducive for start-ups; it is easy to meet different people and establish credibility.
We were told that Israeli entrepreneurs would be very direct, wouldn’t beat around the bush and would cut straight to the point at the orientation.
Even when my group met with the CEO of our selected company, SolView, which is engaged in providing an analytics-based solution to identify the most productive rooftops for solar power and heating systems, the interaction was enlightening, amiable and courteous.
However, we did observe differences in the types of firms.
Amiad Water Systems was a huge, publicly-listed entity with a proper organisation structure, DYN Diagnostics Limited was merely a trading and marketing company, SolView and GemSense (IoT-based motion sensing) and Nemesysco (voice analysis technology) were one-man shows, and Airscort and Rootility were strong on teams. On the other hand, there were three common threads across these firms — focus on developed markets while ignoring developing markets except for China; scaling up a venture and exiting by selling it to a bigger player (except for Amiad and DYN Diagnostics); and patenting of technologies.
Geopolitics
During our stay in Israel, we had the chance to interact with students from the Kellogg-Recanati executive MBA programme at TAU. Some of them were F-15 pilots, but were very grounded! We were addressed by the Head of Intelligence Affairs at TAU. He spoke about West-Asian geopolitics and the major themes underlying the security concerns of the world today. Of these, the most significant were the increasing frustration of people with their governments, the quickened pace of change that makes it challenging to forecast or plan, and the blurring of physical and virtual borders.
He mentioned that we are living in a world of “frenemies” where it is important to cooperate as well as compete. This is applicable not only to politics but also the realm of business.
The primary purpose of our visit was to facilitate a technology-based partnership between an Indian and an Israeli firm. In the process, I realised that there are plenty of similarities between the two nations, be it their age, the people’s attitudes, the influence of traditions and customs on business, or the hunger for growth and development.