Israel: What we can learn from the "Start-up Nation"

Monday, July 15, 2013


Three times a year I spend a week or two in our "cabin" in Jerusalem, Israel. I have just returned from one of my visits and am continually inspired by the entrepreneurial spirit that pervades Israel. One of the most recent Israeli success stories is the sale of Waze to Google for $1.03 billion. Waze is a free social traffic and navigation app. It is different from other apps because it gathers information from users and shares it with all users to warn them of real time traffic jams, accidents, slow traffic, etc. It also contains community curated points of interest.

Dan Senor and Saul Singer, in their book Start-up Nation, believe that "key economic metrics demonstrate that Israel represents the greatest concentration of innovation and entrepreneurship in the world today."

What can we in the Minnesota entrepreneurial community learn from both the successes and failures of Israeli startups?

Peter Cohan in a post last May discusses two of Israeli's most recent failures (Better Place--electronic cars) and (Xeround--database as a service) observes the following four things we can learn:

  • Locate close to markets. (Both Better Place and Xeround had a wide cultural distance between their CEOS and the markets into which they hoped to sell.)
  • Relieve customer pain. A successful startup must relieve customer pain that cannot be relieved by its competitors. (According to Cohan neither Better Place nor Xeround were better at what it proposed to do than its competitors.)
  • Don't build a rocket ship to Mars. Starting small to prove your paradigm is a better approach than burning through capital without knowledge of how to scale.
  • Even heroes fail. Just because an executive has been successful doesn't mean every start up thereafter will be successful. Failure, however, provides lessons for other entrepreneurs in other ventures.

Dov Moran, the creator of the USB flash drive, said in a recent quote in the English edition of Israel's newspaper "Haaretz" that despite his wins, he has had his failures over the years. When asked "how do you grow from failure?", he mused, "You dream about a good future, that the next thing will succeed and [are] prepared to risk failure to reach success. It's a world view...if your ambition is to generate value and make something good, [and] if [you] don't succeed you need to run on to the next thing: There's no question about it."

This world view certainly inspires about you?