An inspiring visit to Startup Nation Israel. Blog by Neelie Kroes.
Last week I visited the State of Israel together with the Minister of Economic Affairs, Henk Kamp, dep. Mayor of Amsterdam, Kajsa Ollongren and people from my team. It was part of a wider trade mission to Israel and the Palestinian territories to strengthen cooperation. The trip was fascinating and excellently organised by the Dutch Embassy in Tel Aviv. By the way: it became even more unforgettable because of the sandstorm, which covered large parts of the Middle East in a dusty cloud of beige colours.
As an introduction, for anyone who is not familiar with the start-up scene and start-up history of Israel, I can recommend the best seller “Start-up Nation, the story of Israel’s economic miracle”, by Senor and Singer (2009). It is an accurate description how such a small country – both in size and inhabitants half of the Netherlands – can be a global leader in innovation and entrepreneurship. What is their strategy and what are the key success factors to stay ahead and make the difference? The book is not only an insightful guide for policy, but also how to set priorities in your own business.
What distinguishes Israel from others? When I think back of all the conversations I have had during the week with founders, VC’s, government officials, a Nobel Laureate and other impressive scientists and summarize what I have learned is that Israel puts Talent first. And as the first female Chief Scientist of Israel, Orna Berry, explained to me: Not just in words, but in action. Only with the best people, you can make the difference. And they are not passively waiting for talent to pop-up or come floating to the surface. Talent is spotted early on and selected in schools, fostered actively and connected with other talented youngsters and teachers. Especially during the period young people have to serve in the army, within special technology units and where they also, at an early age, are given a lot of responsibility.
Combine this with their general attitude of risk-taking, seeing failure as part of the learning curve and showing guts, loving to be the first and coming up with un-orthodox solutions to challenges, you have an amazing powerful starting point for a strong start-up ecosystem. Just try to beat that!
Now, one could easily say, looking at our country, it doesn’t work like this over here. And this would be where all thinking stops. I disagree. With a bit of imagination you can translate this situation to organizing hackathons where universities, corporates provide their best-people and sponsor these events. Where regular masterclasses or summer schools are created for eager kids and Coder Dojo’s in all regional cities give children every opportunity to flourish in programming. I am sure many of you can come up with other ideas and coordinate initiatives. Let’s give a strong boost to young talent!
Furthermore, when it is about talent, Israel has developed a very strong feedback loop, which is an understatement. Successful entrepreneurs or scientist reinvest in their people and country. It is a natural thing to do. For instance, the Nobel prize laureate Dan Shechtman has erected a school for entrepreneurship at Technion University where he invites the best entrepreneurs and lawyers to give master classes to students and founders. They all do this for free. He also has his own television programme for young kids: “Science with professor Dan”. An absolute hit on TV. Dan told me he would love to come to the Netherlands to share his ideas and experiences. I wonder which Dutch TV channel will be the first to come up with a similar programme? Or which professors will volunteer? Both male and female, please.
Added to this, Israel has a strong VC culture, with JVP in the lead. They do not only provide the cash, but also the mentoring, legal advice, identify the markets, cooperate with governmental programs and develop international networks.
I met the Founder of JVP, Erel Margalit, at Startup Nation Central in the JVP Mediapark and I have invited them to come to Amsterdam Capital Week and also for next year’s StartupFest. Because if there is one thing NL can offer Israel, next to awesome startups, excellent technology, a good business climate, global corporates; it is the access to the European market. The largest in the world! And that is the one thing Israel needs to make their start-ups grow.
I was also very impressed by the way the Israeli government has organized innovation and technology policy. Since the seventies of last century an organization, called the Office of the Chief Scientist Office (OCS) has played a leading and continuously influential role in this. The OCS is part of the Ministry of Industry and charged with execution of government policy for support of industrial R&D. They assist tech development in Israel as a means of fostering economic growth, encouraging technological innovation and entrepreneurship, leveraging Israel’s scientific potential, enhancing the knowledge base of industry in Israel, stimulating high value-added R&D and encouraging R&D collaboration both nationally and internationally. See more at: http://www.matimop.org.il/ocs.html#sthash.F4HR4Mi6.dpuf
One program which really stood out, was their incubator program to foster early stage startups. We visited them at Terralab and, as a concrete example, also Sanara Ventures, which is a partnership between Philips and Teva. It is an integrated and focused approach built on the strengths of corporates, high risk innovative technologies, VC funding through JVP and grants by OCS. The grants are 85% of the amount and can be paid back by 3 to 5% of the revenues of the start-up. This way not only high risk innovation is stimulated, but also launching customers and technology are connected as well as the network and expertise of a global VC to assist the startup in all its needs. A very powerful alliance, with the government backing the high-risk and using the experience, knowledge and networks of private parties.
At the DLD festival in Tel Aviv I was part of a panel about women in Tech, led by Steffi Czerny, and I called upon everyone to make a deal: Diversity stimulates creativity and results. Let’s all join forces to attract and support women in Tech. Not only women should help women, but also men should back women. It should be natural behavior and it helps us all.
Shimon Peres, the former President of Israel, shared this vision. He also answered the question from the audience: “when do you know when you are old?” and said: “ You always have to dream big. When you notice that your results outnumber your dreams, than you know you are old”.
At the DLD reception and the lunch with Yossi Vardi, excellently hosted by the Dutch Ambassador Caspar Veldkamp, I met so many inspiring and very talented founders from Israel and the Netherlands. It is stunning to find how much talent is around and their interest to join forces. Together with counterparts in Israel we are exploring possibilities to set up a link between both countries to create a hub to hub exchange. During the Dutch-Israeli Innovation Day in November StartupDelta hopes to tell more about this initiative.
In Jerusalem we visited Yad Vashem, the holocaust commemoration centre with the profoundly moving children’s memorial. The immense human suffering and loss of millions of innocent lives will never be forgotten. It is also nowadays giving direction to important decisions, looking at the response of Germany to the refugee crises in the Middle East and Europe.
Last but definitely not least, the Minister and I visited the Cyber Security Park in Be’ersheva in the Negev desert. Here a powerful combination of large corporates from the aircraft sector, the telecom sector and top level scientists work together to become more resilient and responsive to cyber attacks. The head of the scientific department, prof. Elovici, introduced us in a convincing and inspiring way to the state of play in the field of cybercrime. This should be of a great concern to all of us, because the level of cyber security is pivotal to the future and the trust of our digital society and economy. It is the integrated approach and commitment with top-notch players, which impressed me most. Also here JVP is the main investor, with the incubator program of SCO backing the investment risk, which gives you an idea of how up to date their expertise is about key-technologies.
Both Henk Kamp and I invited them to cooperate with the Hague Security Delta and our universities, which they accepted.
Overall, I think Israel and the Netherland have a lot to offer to each other. We have certain similarities, like the very direct way of communicating and being part of the global top ten, when it is about innovation and technology. I also see a strong complementarity, when looking at the European market opportunities we can provide for their start-ups. Our start-ups and VC’s (not to mention our society) could learn from their general risk-taking attitude and high level of ambition.
Most of all we can learn from the strategy of building the ecosystem by creating focused and very smart partnerships, which cover the whole value chain from tech to market. A government which through the CSO plays a key role on the risk side and as a knowledge base with all the key-players involved and putting Talent on the pedestal. (Young) people come first and are the source to every success!