Not secret sauce but social lubricant – on the success of Israeli start-ups

Many people have speculated about what it is that makes Israel such a fertile ground for start-ups. They have listed factors such as the importance of the military, the Israeli survival instinct and tolerance towards failure among others. There surely is not one single reason. However, based on my experience of living and working here in Tel Aviv for seven weeks so far, I would single out the ease of networking with other businesspeople as the most important factor.

My experience of the Israeli start-up ecosystem actually began well before I set out together with 22 other Princetonians this summer. It began at a careers fair called Start-up Nation Technology Fair that visited Princeton earlier this year. It is an event that allows Israeli start-ups to showcase their products in the US and connect to university students who have an interest in entrepreneurship. I was looking for interesting companies to interview and profile for a class in High-Tech Entrepreneurship (EGR 494). As soon as I arrived I was struck by how easy it was to strike up a conversation with the company representatives. The atmosphere was much more casual and strikingly different from other meet-ups that I had attended. Within twenty minutes I had had meaningful conversations with the CEOs of what I believed to be the two most promising start-ups at the event, had their contact info and their ok to interview them for my projects. I ended up working with one of the companies for my mid-term project, and through them was able to connect to another Israeli start-up to work on for my final project. Therefore, even before coming to Tel Aviv, I had a strong sense that many Israeli entrepreneurs were approachable, driven yet humble, and open to the idea of working with university students of various backgrounds – my own area of study is East Asian religion.

‘whether it is funding or an introduction to a potential partner, everything is just one handshake away in Tel Aviv’

It is said that everyone in Israel knows everyone, and that certainly seems true in the start-up scene here. The three Israeli start-ups that I had connected with before coming here all knew the place of my summer internship, Samurai Incubate – a Japanese VC based in Tokyo with a second office here in Tel Aviv. In fact, one of the start-ups was located a three-minute walk from our office, and I eventually got to visit them and have dinner with my former interviewee and now friend. Since real estate comes at a premium in Tel Aviv, lots of companies, especially start-ups with scarce resources, are located in shared working spaces like City Hub, WeWork or those of accelerators. The density of start-ups in the area near our office (near the southern part of Rothschild Boulevard) is quite simply astounding. It is fair to assume that most people that you meet on the street here are either tourists visiting for the summer or are involved in start-ups in one way or another. When random strangers struck up a conversation with me, on the street, in cafés or in the gym, and learned about my interests, they would always tell me that they are involved in some kind of start-up projects or at least have a friend who was. In fact, one person in the gym asked me to introduce his friend’s start-up to Samurai, and we did get in touch. In any case, whether it is funding or an introduction to a potential partner, everything is just one handshake away in Tel Aviv. The lack of hierarchies and formalities, as well as the emphasis on straightforwardness and bluntness makes networking quick and effective.

The ease of networking here in Israel is not limited to start-ups. Large international corporations have long been trying to benefit from Israeli creativity by partnering with start-ups and tapping into local talent. Corporations such as Intel and Google have R&D labs here and others such as Coca Cola sponsor accelerator programs. At Samurai’s end-of-the-month dinner in June we couldn’t help overhearing the party at the next table speaking in Japanese. Since I speak Japanese one of my colleagues challenged me to strike up a conversation with them. So I approached them in Japanese asking which company they represented and learned that they were from the Silicon Valley R&D lab of a major Japanese corporation, and that they knew Samurai’s Japanese CEO. Their leader, who spoke fluent English, came over to our table and we had a good conversation. The next time they visit Israel, Samurai will be on their list of places to visit and we may be able to help them identify relevant start-ups. I doubt that it would have been as easy to connect with them had we met in a different country.

(Pascal Wenz)

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