No Noise … 5 billions in Exit Last year

Screen Shot 2013-01-14 at 11.26.50 PMLast year Israel’s startups were bought out for a record total of $5.5 billion, a 134% increase from 2011. How many Kenyan Startups (considered to be the Silicon Valley of Africa) have been bought out?

Israel Tech scene is very active, well supported by a healthy ecosystem, and also a sharp focus on area where they could make big impact on global level: medical device technology, agricultural technology, Big data, enterprise software, security, telecommunication, Defense, etc.

There are major lessons African startups ecosystem could learn from Israel success story:

  • – Regardless of what you think capitalism is, in Israel, the Jews’ state,  the government controls directly and indirectly about 75% of the whole country economy assets.
    – Startups get 85% of  their seed fund from the government and the remainder 25% comes from private funds. Israel situation is very similar to Finland where the state is heavily involved in startups funding, and surprisingly Finnish Tech sector exports now represents 21% of Finland export.
  • – Israel has a very active VC system, and attracts more venture capital per person than anywhere else on the planet. In 2012, the World Economic Forum ranked Israeli #1 in its Global Competitiveness Report for VC Availability.
  • – Any tech business plan  is 100 percent export focused from Day One, because the domestic market is small, and unscalable. Consequently, the country has more companies listed on NASDAQ than any nation other than the US and China.
  • – The 30 months (for men) and  18 months (for women) Israeli compulsory military service has a huge impact on leadership, management, and entrepreneurship skills. Hands-on experience is provided by the military to every single young Israeli who has reached the age of 18.
  • – The government is highly involved in the strategic technology roadmap of the country and creates the very basics conditions for a healthy partnership between universities, entrepreneurs and public administration.
  • – Israeli startup are also very focused, working on few key areas where they are certain they could made huge impact and exit big: medical device technology, agricultural technology, telecommunication, Big data, enterprise software, security, etc.
  • – Also, startups are mainly Research and Development based, not idea or flash intuition based (from a lonely guy in his bathtub). Startups are organized to turn promising technology from universities and research labs into commercial success.
  • – The No bullshit rule. If your idea sucks, you will hear it. If you are incompetent, you’ll hear it twice plain into your face. If you don’t bring any value to the place, you’ll be dropped without any winch.Respect is deserved, entitlement and status are second to contribution.
  • – No unnecessary noise. People are driven by results, and expectations are high. Contrary to Lagos or Nairobi where most folks are driven by the status of being entrepreneurs on stage, making speeches, presentation or being covered in the local newspaper that they can show to friends and family, or share on Facebook.
  • – The Israeli Education system is to one of the best in the world like the Finnish one, and the impact of the Israeli army on training managers is healthy for the ecosystem.

According to Startup Genome  report on Startup Ecosystem released last year, Israel has #2 startup ecosystem globally, after Silicon Valley.

Screen Shot 2013-01-15 at 12.04.48 AM

Here are the top 20, in order:

  1. Silicon Valley
  2. Tel Aviv << Israel is #2 in the world
  3. Los Angeles
  4. Seattle
  5. New York City
  6. Boston
  7. London
  8. Toronto
  9. Vancouver
  10. Chicago
  11. Paris
  12. Sydney
  13. Sao Paulo
  14. Moscow
  15. Berlin
  16. Waterloo (Canada)
  17. Singapore
  18. Melbourne
  19. Bangalore
  20. Santiago

The report (which you can download here) contains the first data-driven Ranking of the World’s Top 20 Startup Ecosystems and  a deep dive into the each of the individual Startup Ecosystems.

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About Mawuna KOUTONIN

Mawuna Koutonin is a world peace activist who relentlessly works to empower people to express their full potential and pursue their dreams, regardless of their background. He is the Editior of SiliconAfrica.com, Founder of Goodbuzz.net, and Social activist for Africa Renaissance. Koutonin’s ultimate dream is to open a world-class human potential development school in Africa in 2017. If you are interested in learning more about this venture or Koutonin’s other projects, you can reach him directly by emailing at mk@linkcrafter.com.

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