#Asia 5 reasons why Israeli startups are so successful

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Tel Aviv – The heart of Startup Nation

I was inspired to write this post after our company was listed as one of the Top 16 Israeli Startups to Watch on this blog. Looking at all the amazing companies we shared that honor with, I reflected on how amazing, and seemingly unlikely, the success of Israeli startups has been.

I have a unique perspective on this: I spent nearly 4 years living in Israel, working in the startup scene. I was able to see the unique nature of the ecosystem from an outsider’s perspective. I am now back with an Israeli startup, though I am living outside the country, and it has reminded me of how unique the ethos of Israeli startups are.

The most amazing thing on what we know about “The Startup Nation,” as coined by Saul Singer and Dan Senor in their seminal book by the same title, is that it sits in an area with nearly zero natural resources, though it has one in abundance – Brain Power. Just like the dream of making the desert bloom, Israelis have done something no one thought was possible.

Did you know that Israel has, per capita, the most startups in the world?

Before I moved away from Israel last year, I wrote a post on LinkedIn about my experiences that got some amazing feedback, probably more than any other post I’ve ever written.

Now that I am back with an Israeli startup, I am reminded of the reasons I see for this success:

1. The Army

Nearly every Israeli over 18 is required to serve in the military, or do national service. This creates an entire adult population that understands hard work, leadership, and fearlessness.

Having not served in the Army, being “too old” when I arrived, I have observed that there is very much of an ethos to get it done. There is a goal, and regardless of what the barriers are, you are expected to get it done. That has created a work force of hard headed, innovative people who have complete faith in their abilities.

Additionally, the Army has provided intelligence soldiers with the kind of technological training that even MIT graduates would dream of getting.

Unit 8200 offers some of the best technology training in the world

If you are not familiar with Israeli startups and their technology, you need only look at the every day devices and platforms you use. Though you may not know it, you use Israeli technology everyday.

Unit 8200 is compromised of the best of the best in terms of intellect. You will not a find nearly a single Israeli startup that does not have at least one developer, CTO, or founder that was in 8200.

The technologies that come out of these units are applied to every day cases and inspire amazing startups.

One of the companies listed in the 16 Israeli Startups to Watch was Windward, a startup started with the goal of monitoring and tracking shipping activity, partially to identify nefarious activities for governments and companies. Major investors include a former CIA director, and a former Israeli chief of staff.

2. Genius Ideas

There are so many Israeli startups that when you hear what they do, you say “oh wow, why didn’t I think of that?” Israelis have a knack for seeing a problem and coming up with a technological solution to solve it. Bringg, for example, saw that deliveries were lagging behind the kind of experience other on-demand services like Uber were providing. Such a simple concept, right? But no one had the drive to do anything about it until now.

How about a crowd-sourced navigation for your mobile phone? Seems like an obvious idea, but no one really did it before Waze came around. And from a small startup with a single app, they ended up being one of Google’s largest purchases… nearly $1 billion.

Waze was purchased by Google for $1 billion

This ingenuity is not limited to companies, but the entrepreneurs themselves. Ben Lang, who wrote the “16 Israeli Startups to Watch” article is someone I have always respected. He took a simple idea, creating an interactive map that shows all the startups in Israel, and turned it into a startup called Mapme that has already raised $1 million.

As an individual marketer, Ben even created his own holiday, Hummus Day, which is now celebrated all over the world. Not only is that genius, it also shows an amazing amount of hutzpa.

3. Hutzpa

It’s hard to define this word outside of Hebrew, though it has become an English colloquialism around the world. Though it can be used as a pejorative, Hutzpa means that you have the gall to do something, regardless of what people think. Israelis have this in spades. Though, to an outsider, this may come off as rough or even rude, Israelis use it to their advantage.

When you are working with an Israeli, or an Israeli company, you will know exactly where you stand. Instead of sugar coating, they will be brutally honest with you. Though that can be difficult sometimes, its the best way to keep an open line of communication and understand expectations on both sides.

4. Work Under Difficult Conditions

I will always remember pulling my car over, running into a ditch, and watching 3 rockets get shot out of the sky. This was not a movie, it was a part of my commute to work. After the rockets were shot down, everybody (I am talking about an entire highway’s worth of cars during rush hour) dusted themselves off, got in their cars, and went to work.

Israelis are used to working under conditions like this. It’s always amazed me how people can persevere under difficult times, when others may stay home in fear. During war, we never missed a single day of work.

5. Amazing Technologies

You use Israeli technology every day. This applies to Asia, Europe, Middle East, Africa, and the Americas. Think I am exaggerating?

Here are just a few examples:

Apple Products

You may find this surprising, but nearly every Apple product you use, including the iPhone, iPad, and Macbook, is completely reliant on Israeli technology and hardware. Anobit, which was bought by Apple 3 years ago for $400 million, created the flash memory controllers that Apple uses for all their products.

Facebook

Facebook has historically shied away from having R&D centers outside the United States, but after it’s purchase of Israeli company called Soluto for $130 million, they joined the hundreds of multi-national tech companies that already have a presence in Israel.

Additionally, you know how sometimes Facebook can automatically tag pictures with your friends? That’s Israeli too. Face.com was bought by Facebook for $100 million in 2012, and Facebook uses its facial recognition technology within the Facebook platform.

USB Flash Drives

In 1999 Israeli company M-Systems invented what we now know today as the USB Flash Drive. Every time you go to an event and you get one of those branded thumb drives, you are benefiting from Israeli technology.

Google

The purchase of Waze by Google for $1 billion was a watershed moment for Israeli startups. No one could have ever imagined (at the time) that a single application, which wasn’t a social network, could have that kind of valuation. For those of us who were already using Waze, we totally understood why.

Google has left Waze as an independent application. The crowd sourced traffic data you get in your Google maps, however, is pulled from Waze. Next time Google maps gets you to your location without hitting traffic, you have Israeli technology to thank.

Intel

Intel operated in Israel before it was cool, way back in 1979. They saw the opportunity to benefit from the intellectual capital that was available in abundance. Intel was also the first example I can think of of a tech company working through the kind of difficult circumstances I mentioned earlier.

The story goes that when Saddam Hussein started sending missiles to Israel during the first Gulf War, Intel defied government orders and continued to operate as rockets fell around them. Resorting to what became normal years later, the company moved their operations into a bomb shelter.

Not only was Israeli ingenuity crucial in the development of Intel’s micro chips, it is now a major hub for the production of these chips. Recently, Intel invested $6 billion in building up their presence in Israel.

Keep an eye out for the emerging Israeli startups.

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