In May 2014, I was part of a business study trip to Israel to learn about what earned them the moniker “Start-up Nation”. At any point in time, there are over 100,000 Israelis working in Silicon Valley, not counting the thousands more back home working on their own startup. Here are some key observations I gathered after talking to more than 14 startups and SMEs in Israel.
1. Israeli startups have original solutions, not me-too ideas
Israel’s startups are highly original, not just in terms of business model, but also product-solution fit. In my short stay in Tel Aviv, I witnessed a whole range of unique ideas solving a variety of different needs.
Pixspell, a startup based in Tel Aviv University, developed a patented on-screen camera calculation tool that informs users in real-time how to take better photos without needing to know concepts like rule of thirds.
Another startup SolChip created the world’s most efficient solar battery that allows the Internet of Things to work without a power grid. These companies are just the tip of the iceberg.
Now, I’m not saying Singapore’s startups aren’t innovative or revolutionary. Yet in my years of involvement in entrepreneurship here, ideas trended towards modifications of existing, successful startups already established elsewhere.
This can be a highly savvy move considering entrepreneurs can skip discovering product and solution fit by adopting a me-too idea. They jump straight into finding a solution and market fit.
But what kind of environment and culture are we creating locally? If we simply adopt tried and tested products, can we really aspire to be an innovative nation, which is what the Singapore government yearns for?
One reason why I believe Israeli startups tend to be more innovative is their strong engineering background. For Singapore, decades of focusing primarily on the service and finance industry have dramatically changed the education landscape to produce more graduates armed with soft skills rather than STEM subjects.
This no doubt percolates down to the startup scene.
2. Israeli startups go global ASAP
Singapore and Israel have similar constraints. We have a small domestic market (five million versus eight million), a hard to penetrate regional market (language barriers and lukewarm relationships), and a lack of resources (water, space, and more). Now here’s the difference: Israel’s startups seem more focused on globalization from day one, while Singapore startups only venture out after getting local traction.
What do I mean by that? Well, startups in Israel generate ideas that require them to move into the global arena from the get-go. Autotalks, a fabless semiconductor startup, produces a vehicle-to-vehicle transmission chip. Upon incorporation, it went straight to American and European safety boards to get their product approved for distribution there.
Singapore startups, on the other hand, typically create solutions for the local market and then worry about globalization plans only after they have financial success locally.
In today’s competitive landscape, being global is key to not just a startup’s but also a country’s success. So why is it that the Israelis embrace it so much more? I would like to propose three reasons:
One, a strong and active in-combat military. There is a saying in Israel that everyone you meet will know someone who died in combat. Military service is treated as a badge of honor for both male and female enlistees; a far cry no doubt from Singapore’s own active service.
More importantly, this very real fear of being overrun by enemies has created a “carpe diem”, or “seize the day”, mentality. This influences their entire outlook on life and explains why they are so willing to take on risk to venture abroad early.
Two, a culture of risk acceptance. This topic has been explored to death in Singapore. It’s seen as the key obstacle hampering our startup culture. The Israelis have turned this entirely upside down; they frown upon you for working at a large conglomerate instead of starting up or being part of a smaller, more innovative company.
Three, support facilities to aid globalization. The Singapore government through IE Singapore and SPRING Singapore have a whole range of facilities to help take Singapore companies into overseas markets. However, many of these schemes are not geared towards early stage enterprises. In fact, for most of them, you will need to demonstrate product viability even before the agencies release aid.
This differs from Israel where the modus operandi is to take a product built at home and quickly export it to the world, sort of like Singapore’s vision of test bedding new products locally but done right.
These are just some of the visible learning points I got on my recent trip to Israel, which is truly an ideal cultural melting pot for startups.