For many of us, starting the new year means picking up new goals and improving new skills. However, when it comes to startups and entrepreneurship the goal for Israel appears to be “keep going.” The country, which has been branded the “Startup Nation,” achieved an incredible amount of success in the global startup scene in 2018.
According to the 2018 Global Startup Ecosystem Report, Tel Aviv has the highest number of startups per capita in the world, and the highest investment of GDP in research and development (R&D). Moreover, it is one of the top-performing cities for global connections and global market reach, and is considered one of the best places in the world to start a business according to Compass and Fortune magazine.
In a previous interview with The Sociable, Ran Bar-Sella, the CEO of Israeli Incubit Technology Ventures, which focuses on early-stage deep tech startups, believes the country’s secret to success is the result of numerous factors.
“I’m not sure anyone has the correct full formula but I think I can point out a couple elements of the answer:
- Mandatory service in the IDF creates a learning experience for people with entrepreneurship potential at an early age, enabling to gain skills and experience in an environment that is both demanding but open to improvisation.
- Stanley Milgram’a famous ‘six-degrees of separation’ rule states that every person on the globe is connected to any other through no more than 6 friends-of-friends.
In Israel the number if four (4) – and the networking level is much much higher. This is a true advantage for entrepreneurship as in the early stages of a venture you constantly look for resources/advice and people to learn from.
- Isreal’s defense industry is a growing ground for many entrepreneurs who have the opportunity to deal with cutting-edge technologies at a younger age, in many cases having to invent technologies that cannot be obtained abroad.
- Last, but not least, is a general cultural attitude towards failure. In our culture, it’s not fun to fail but it is also not the end of the world. We have a term that translates to “learning fees” and failing and trying again is considers as ‘I have paid my learning fees and now know better’. In Yiddish is sounds better.”
We also spoke with Israeli Shaul Weisband, the Co-Founder and CMO of Jifiti.com, a startup redefining retail experiences with unparalleled data & technology consumer financing, eGifting, gift cards and gift registry solutions, to get a better understand of why fintech startups have taken off in this space. “Israel is an ideal space for fintech startups for two main reasons. Firstly, all leading financial institutes such as Citi Bank, HSBC, Paypal, Mastercard and Visa have a major presence in Israel and work closely with startups. These companies are looking to utilize the local talent in innovation for their global networks,” states Weisband.
He adds “In addition, Israel as a whole is a global hub for innovation and technology. Many times a required component of any other technology involves fintech. So a fintech startup in Israel lives within a thriving technology ecosystem that requires its services as part of its offering.”
Clearly, the country is off to a good start in 2019 and can hit the ground running at the same pace as last year. As this space grows we can expect to see a rising number of unicorns and fintech success stories blossom here.
Disclosure: This article includes a client of an Espacio portfolio company