Friday 4 October 2013

Israel's Tech Start-Ups and Venture Finance Part I

Of Israel’s 5,000 tech companies, city planners have counted 600 start-ups in the single square mile around Rothschild Boulevard one of the grandest streets in Tel Aviv. Israel has more companies on Nasdaq than any country beside the US and China, and it attracts more venture funding per capita than anywhere in the world. Its tech sector employs 230,000 people in a population of eight million, earning more than a quarter of the country’s total exports.
  On the seventh floor of the Shalom Meir Tower  there was a municipal library, it was refurbished as a shared workspace for start-ups. The fourth group of 13 companies has just finished their four-month session, which includes meetings with potential partners, lectures by business experts, networking.
 There are similar tech hubs in many cities throughout the world, but Avner Warner, Director of International Economic Development at theTel Aviv Globa lCity Administration , says Tel Aviv stands apart because of a single overriding influence on early-stage Israeli companies: the Israeli armed forces.
 “The military gives them their technological experience, managerial experience and networks,” says Warner. “For the average person, the greatest barrier to being an entrepreneur is 'Where the hell do I start? What do I do first?' Most people just get confused at this point and go get a normal job. That’s the experience the army gives them. It’s understanding how you actually build a product, which is the same as managing a project in the army.”
Inside the HQ of the Mamram, the Israel Defence Forces (IDF) technical support unit in nearby Ramat Gan, computer training course commander Capt. H (her full name is classified) says new recruits on a six-month intensive programming course study from dawn till night and are taught programming skills, teamwork, project management and – most importantly how to be creative. It’s like a school for start-ups.
“When you do a degree in computer science you study the technical things," she says. "You study how to write a code, mathematics. We don’t focus on that. We focus on how to work in a team. How to understand what your client needs and make software that fits his demands. How to write good code that you will be able to de-bug and maintain."
Tal Marian, founder of the TechLoft,says the results of the military training are obvious. “Some of the military units work like a civilian organisation. They encourage entrepreneurship, the feeling that if you come up with a good idea that answers a real need of that unit’s mission, you will get the funding and manpower and the time you need."
 The miniaturised camera and power pack in the Given Imaging camera  pill is based on equipment in the nose of a military drone, for example. Israel raced a decade ahead in the management and use of large data sets – or big data – that drive many consumer apps because of expertise developed by Unit 8200, the intelligence-gathering arm that is now the largest unit in the IDF.

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