Start-up country israel: rough ideas in search of capital
In front of the peres peace center in tel aviv, the spring sun is shining over the mediterranean sea; inside, one hopeful entrepreneur after another takes to the stage in front of potential investors.
The founders want to simplify the purchase of coffee or perfect location-based advertising on cell phones, for which they sometimes need a million dollars, sometimes only 500,000. They are mostly male, almost all of them wear jackets and jeans, and appear routine. Many of them have already founded several companies.
Sarah nadav is a mid-thirties mom, and a relative newcomer to the start-up business. This is the second time that it has taken part in this so-called "bootcamp", a kind of partner organization for young companies. Over the course of two days, more than 50 start-ups that have a business idea but not yet the necessary capital will present themselves here. In one-on-one meetings with investors, possible collaborations are explored. Interest in start-ups from israel is rough. Companies from japan, the USA and italy will be there. Bertelsmann is there from germany.
Israel’s tech scene is highly developed. A study by spanish telecom giant telefonica ranked tel aviv as the second best place in the world to start an IT company. Only the american silicon valley did better. Berlin came to the 15. Place. The giants of the industry such as microsoft, intel or cisco have long since set up development departments in israel. 63 israeli companies are listed on the american technology stock exchange nasdaq, more than from europe, japan, china, korea and india combined – and new companies are founded in the country almost every day.
Nadav’s start-up is called "bukit. It should help american small debtors and their creditors reach a settlement faster and with less stress. Until now, this market has been dominated by specialized collectors who use sometimes crude methods to track down sullen debtors, force them to pay and take high fees in the process. Bukit is aiming directly at a settlement between the two parties and has his sights set on a huge market: 2.7 billion dollars in outstanding private debt in the u.S. Alone. For his services, bukit demands a fee from the creditors, not the debtors.
When nadav first presented her idea at last year’s bootcamp, people were very skeptical, she says. How could she do that?? Nadav has a degree in non-profit management and can’t program. But she found good partners. One of their advisors is miles ward, who in 2012 helped distribute the first images of NASA’s mars robot "curiosity rover" on the internet and was a member of the now legendary programming team that developed the software for the election campaign of US president barack obama.
But nadav has more: a good reason for her enterprise. She was pregnant and still living in the U.S. When her husband was diagnosed with a brain tumor. The couple no longer had a regular income, their parents could hardly support them and the USA was sliding deeper and deeper into recession. Nadav and her husband took out loans to pay for treatment. At some point, they settled the debt on one credit card with another credit card, the interest rate spiral spun faster and faster – and nadav moved to israel. She had lived here before, the state helped her with a research grant and with the treatment of her husband. 2011 she founded bukit.
Israel is often referred to as a "start-up nation"; the term was coined by a bestseller of the same name by dan senor and saul singer. The country itself was just 60 years old and had not had a chance to build up traditional industries, senor and singer write. The israelis had to become inventive in order to achieve prosperity.
They were helped by the fact that the army gives its young conscripts heavy responsibility early on and – ironically – levels hierarchies. Because in the israeli army it is customary for a young officer to be on first-name terms with generals and to criticize them openly. The result is a culture that rewards innovation and doesn’t shy away from the risk of failure – perfect for budding entrepreneurs.
Sarah nadav benefited from this culture. Because last year, investors were still skeptical about the idea of a start-up. In the meantime, however, she has made the first settlements with bukit, and the demand for her services is greater than she can currently handle with her small team. At boot camp in tel aviv peres center, they had contacted several investors, nadav says.