The start-up nation ‘par excellence’, Israel has a high reputation for its tightly-linked innovation ecosystem. New sectors are emerging and consumer appetite for new technologies is undiminished.

[WORLD TOUR] Israel: Startups focus on the international market and “turn the local market into a laboratory”

Interview, on the sidelines of a L’Atelier numérique (L’Atelier Digital) broadcast on the BFM Business Channel, with Yossi Dan, an expert in innovation at global networking and innovation consultancy Challengy and co-director of Tel-Aviv-based accelerator The Founder Institute.

L’Atelier: Is security still the dominant sector in Israel?

Yossi Dan: Security has always been one of Israel’s strong points, even before the startups emerged, even before the idea of the ‘startup nation’ was born. And it’s still a big market. But other sectors, such as telecoms and the Internet are now featuring prominently as well.

Are the startups that are now developing focusing more on local or international demand?

One aspect which has always characterised the Israeli market is that there is no local market. Startups – at least those that I work with or come across – think only about working internationally. However, what they often tend to do is turn the local market into a laboratory. Here’s a little anecdote: I know startups staffed exclusively by Israelis who speak only Hebrew among themselves. But they’ve given their startup an English name because they know that 95% of the time their first customer will be from the United States.

So what do Israelis buy? Don’t they basically expect to have applications designed for local demand?

Israeli consumers tend to be early adopters. They love innovation and are keen to test products out early and fast. It doesn’t matter which country the innovation comes from.

Is there a typical entrepreneur profile, or a wide variety?

Entrepreneurs in Israel come in a wide variety of types because it’s a country that attracts people from all over the world. There isn’t just one type of entrepreneur. That’s one of Israel’s great strengths.

Can you feel the entrepreneurial spirit there? Is it a bit like Silicon Valley? Or is the atmosphere very different?

Well, the two models are often compared. A lot of studies purport to show how similar the two ecosystems – Silicon Valley and Israel – are. What’s special about Israel however is its size. The Israeli ecosystem is much, much smaller than Silicon Valley, and a lot depends on entrepreneurs working in close proximity to each other. This makes it much easier to create relationships. You find entrepreneurs who are already successful rubbing shoulders with those who are just starting up and so it’s very easy to obtain advice.

By Mathilde Cristiani
Head of Media