A few months ago, I had the opportunity to join an expedition to learn about the entrepreneurial ecosystem in Israel. We met with government officials, industry leaders, university research centers and technology transfer offices, venture capital investors, and, of course, the headliners – the entrepreneurs. This was not my first experience in this ecosystem.
During my tenure at Allscripts, we invested in an Israeli company with a solution that we believed could help address one of the most vexing challenges in healthcare. With a myriad of systems all recording data in their own unique way, dbMotion solved the Tower of Babble problem, allowing data to be normalized and interoperable. This included over 50 systems, such as electronic health records, pharmacy systems, laboratory information systems, radiology information systems. Think of it as providing the same type of solution that allows representatives at the United Nations General Assembly to speak to each other in their own language. And more importantly, it could allow for the creation of a single source of truth with all information about a patient in one record. Like Victor Kiam and Remington Razors – we liked the solution so much, Allscripts later bought the company.
I was very impressed with the solution but even more with the team that Yuval Ofek, the former CEO and his co-founder and brother, Ziv, assembled in Israel. Many of their colleagues were veterans of the Israeli Defense Force with experience in intelligence and software systems. They attended top universities in Israel and the United States with advanced degrees and had traveled extensively. In fact, some had worked in the US to gain a deeper appreciation of the market – including at leading technology companies. The picture of this company would not have included twenty-somethings in hoodies and headphones.
Many of the start-up teams I recently met in Israel had similar profiles. Military experience (mandatory in their country), strong work and educational backgrounds and a wonderful “can do” spirit that comes from being a perennial underdog. The market in Israel is small – 8 million, as compared to the Chicago metro area population of 9.5 million. So if you are starting a company, you need to think globally. I also found that capital efficiency was a strong common trait – making more of less; stretch investments and being resourceful. Part of me thinks that this may be in the DNA – with many of their parents and grandparents emigrating with nothing but their wits and having made the desert bloom.
When Kathy Bergen of the Chicago Tribune recently contacted me as background for herrecent article the Israeli technology scene, I gladly provided her with some references and resources based on my network. There are lessons to be learned from the second most active start-up location in the world. Give it a read and let me know what you think.
I have included below a few pictures of the places our expedition visited – not your usual tourist sights:
Microsoft not only holds mash-ups for the start-up community but has an active venture team as do many other corporate investors.
SOSA is a recently opened incubator in South Tel-Aviv that was funded by a number of leading venture firms, including Pitango. The teams above are working in a renovated multi-story light manufacturing building.
Pitango’s Managing General Partner, Rami Beracha, with Tel Aviv’s skyline behind him on SOSA’s roof deck.
I did have time to taste some local brew… not a relative, as far as I know