Israel's Formula for Successful Start-Ups

In keeping with this, exciting companies are to be found en masse.

Without a doubt, the star of the recent past is the unicorn Mobileye, manufacturer of driver assistance systems and data generator for over 20 million vehicles and car routes worldwide. Mobileye was purchased by Intel in 2017 for a spectacular US$15 billion, making in-house technology for self-propelled cars a reality.

Also of Israeli origins is a resource in the digital scene that is crucial for any desktop: SimilarWeb. Founded in 2007, the company has developed a website analytics tool that provides traffic statistics and KPI for almost every website worldwide. For this reason, it proves indispensable for developing marketing strategies and discovering new traffic sources for one’s own website.

Among the early-stage companies, Common Sense Robotics offers an interesting example: Established in 2015, the start-up provides a solution for on-demand supply chains. This is made possible by a physical cloud for urban areas: a network of micro-fulfillment warehouses located in the heart of the city. Added as a supplemental accelerator is a robotics-supported, automated fulfillment center. In doing so, online retailers can profitably offer swift delivery and steel themselves for competition with Amazon Fresh. 

A further example is Axonize: Tel Aviv founders have developed a platform for controlling IoT applications, which within a few days can network and coordinate different back-ends and display them in a clear reporting system. Dashboards can be easily customized without the need for back-end developers.

This is just a small glimpse of some of the more than 6,000 start-ups that the Israeli ecosystem has created in recent years...

Since the founding of the state seventy years ago, Israel has been engaged in a relentless political conflict with the Palestinians and many of its neighbors. Accordingly, the state has built one of the world's most powerful armies, with 3,600 tanks (Germany: 400), 400 fighter jets (34), and approximately 580,000 mobilizable soldiers (328,000), which make this small country extremely well-fortified. Compulsory military service applies to young men and women who, in their training over several years, are given responsibilities at an early age and are not drilled in the finer points of marching in cadence, for example, but instead trained to accomplish a mission successfully. As a result, the entrepreneurial spirit is essentially included with their army boots. With this kind of conditioning, setting up a company is an obvious step and considering the political situation, a breeze -the joy of risk-taking is therefore great in the face of living in a perilous country.

There are two particularly coveted operational areas in the army. On the one hand, there is the area of the (classic) pilots. On the other hand, a place in the cyber army is highly appealing. Commonly referred to as Unit 8200, the military only recruits candidates with the highest qualifications in the ambitious university town of Beer Sheba. There, the future founders learn the IT trade from the ground up and establish a lifelong business network. And even beyond the army - thanks to the many highly qualified immigrants from the former Soviet Union in particular - there is no shortage of well-trained specialists.

With 8.5 million inhabitants and a size of 22,000 square meters, Israel is small and consists of 60% desert. Accordingly, mineral resources are scarce, and exports are a must for economic success. For the Israelis, this requires converting the best of agricultural conditions and knowledge into an economic factor with export qualities. While Tel Aviv is the Mecca of young entrepreneurs benefiting from state subsidies such as low taxes, infrastructure grants, and interest-free start-up loans, Beer Sheba is making the transition from a university city to a digital metropolis. 

The region is inspired by a unique mixture of research, technology, and industry. Founded in 1966, Ben Gurion University (one of eight universities and over 30 universities in the country) with approximately 25,000 students provides a high-quality system of education and research, plus leading-edge military technology developed in the desert city, and the settlement of international industry. International players such as Facebook, Google, Intel, IBM, and General Motors have set up their own research and development departments in Beer Sheba to benefit directly from local expertise.