Israel has been dubbed the ‘Start-Up Nation’ and the success, in particular, of its high-tech sector has been widely documented. What is it that makes the Israeli start-up ecosystem so special?
MICKEY STEINER: People have been asking me this question for the last 25 years: what can we do in our own country to have such a thriving, successful and innovative start-up ecosystem? It's a tricky question but I think a lot of it has to do with the out of the box thinking that comes from a country that grew out of the desert, with very few natural resources. We have had to be resourceful, resilient and innovative to survive and thrive. There's a readiness to take risks and no fear of failure. These are strong attributes in an entrepreneur and these are baked into the DNA of Israel.
We’re also a very young country. Obviously as a nation we’re young, but our population is also young and vibrant; the median age is below 30 - among the lowest in the world - but also highly educated and motivated. It’s my firm belief that the best ideas come from the youngest, the most junior who can often offer a fresh perspective. Add to that the lack of hierarchy and culture of open communication, which enables the young to voice their opinions openly and participate in creative processes and decision-making.
Finally, Israel is a small and close-knit community - and this creates a real hub effect. For example, our team is comprised of four people, but virtually any time we meet a start-up, one of us will already know their investor, their CTO or the founder. The intimacy of the network is a big help and has an amplification effect. If you look at tech hubs being cultivated by countries elsewhere - such as Silicon Roundabout in London - this is what Israel already has.
What opportunities or synergies do you see between the UK and Israeli start-up ecosystems?
Firstly, it’s worth pointing out that there are many commonalities between the UK and Israel. For example, the Israeli legal system stems from the UK system, having been under British mandate for a while during the period the state was formed. Of course, there’s plenty of overlap too in terms of language, geography and culture and all of this makes cross-border activity between the two more straightforward - and more of a natural fit - compared to other markets.
The biggest market traditionally for Israeli start-ups beyond their home country has historically been the US but increasingly we’re seeing Israel start-ups focus on the UK. Obviously it’s a huge market - the 5th largest economy in the world - and full of opportunity, with a strong entrepreneurial and technological focus. On a practical level too, there’s only a two-hour time difference and much shorter travel times than when compared to the US especially, making it an easier transition and a logical market to target.
You can see this with many of the Israeli start-ups we work with. For example, one of our Israeli portfolio companies, Remoty, which provides augmented reality-based technical support to solve home maintenance and technology issues, is currently looking to make its initial launch in the UK. Another example is Placense, which provides GDPR compliant consumer location intelligence to businesses. It’s part of the ScaleUp Hub UK accelerator programme we at the Innovation Hub are running to support businesses’ growth in the UK.
Are there particular sectors in the UK that are attractive for Israeli start-ups?
The UK leads the way in standards and best practices in many areas. For example construction standards in the UK are among the highest in the world, and BIM (Building Information Modelling) is widely enforced and accepted by UK construction companies. If you’re going to go into the construction technology or PropTech market, the UK market is a very good market to start with.
The cyber-security sector in Israel is incredibly advanced, and we invest in a number of Israeli cyber security start-ups - indeed Israel is the home of our Cyber Ventures focus area. With London one of the global financial services hubs and with financial services one of the top targets for cybercriminals, it’s a key market for these companies. Cyber-security concerns are not only present in the financial industry, however; any industry, and any critical infrastructure is prone to potential cyber threats, and can therefore benefit from connecting to our portfolio and other Israeli companies.