Thursday, 18. May 2017

Lessons from the Startup Nation Israel

“Startup Week” in Düsseldorf: Israeli Ambassador spoke at the “WHU Entrepreneurship Roundtable”

Startup and entrepreneurship topics have received a lot of attention over the last years. While we are quick to think of the iconic Silicon Valley when discussing innovation we should not forget about Israel. Though a small country, Israel was a forerunner in driving entrepreneurship and has rightly been branded the “Startup Nation”. As home to one of the world’s most vibrant and innovative tech sectors the country boasts more startups per capita than any other country in the world. As an increasing number of German corporates are venturing into Israel to buy a window into this powerful talent pool and tech cluster, this year’s “WHU Entrepreneurship Roundtable”, once again powered by Orrick and Statkraft, focused on building bridges between Israel and Europe. As part of the “Startup Week” in Düsseldorf, internationally renowned speakers, including high ranking Israeli diplomats, corporate executives, successful entrepreneurs and experienced corporate investors gathered at the campus of WHU – Otto Beisheim School of Management under the motto “Lessons from the startup nation Israel”.

“To understand how the machine works you have to go to the engine room of the Israeli startup scene”, explained Israeli Ambassador Yakov Hadas-Handelsman, keynote speaker at the “WHU Entrepreneurship Roundtable,” at the outset of his remarks. Both policy-makers and the business community need to work together to create a business-friendly climate and a culture that appreciates trying and allows failure, he pointed out. He explained how Israel has attracted more VC capital than any other nation in the EU, attributing much of the success to the Israeli government which actively started supporting the VC and startup sector in the mid-80s. The state financially supported foreign investors that invested in Israel and invested into startups. “If an investment is too risky, maybe the government should do it,” Hadas-Handelsman commented on the concept. The state taking some of the risk is “a model for success and you don’t argue with success,” he said as he appealed to the German government to support founders and invest into startups.

A notion that his colleague Doron Abrahami, Head of the Israeli Economic and Trade Mission shared. In his overview and explanation on German-Israeli economic relations since the start of the countries’ diplomatic relations in 1965, he also encouraged the audience to look at Germany’s refugee situation from a different angle. “Israel is a melting pot, our newcomers where a big gift to society,” he said with respect to the wave of immigrants that came to Israel after the collapse of the Soviet Union. “Everyone can contribute, as long as they are made to feel at home,” Hadas-Handelsman agreed. Much like last year’s key note speaker, US Ambassador John B. Emerson, Hadas-Handelsman also noted that Germany still lacked a culture of failure, a mindset in dire need of change, as failure is important. “You win some, you lose some and as long as you win more than you lose, it’s all good,“ Hadas-Handelsman summed up his speech.

The speech was followed by Amit Keren, Head of Deutsche Telekom Israel, who gave a presentation that served as a case study of a European company’s investment and innovation history in Israel. Following his presentation, Keren joined with Ambassador Hadas-Handelsman, Doron Abrahami, Professor Dr. Eli Talmor, London Business School and Jörg Rheinboldt – Head of Plug&Play at Axel Springer, in discussing “Chances and Challenges for German Corporates “ when investing in Israel. The speakers agreed that Israel’s small size makes for great opportunities as people are generally open and connections are easily made. As a rather surprising takeaway came the anonymous praise of all speakers for influence of the modern, tech savvy Israeli army whose mandatory military service not only gives structure to young Israelis but also creates a culture of accountability while equipping young people with technical knowledge. While in the past Israeli startups were rumored to be searching for quick exits the experts confirmed that the sector has matured and startups these days are looking to scale up – an ideal connecting factor for Israel and Germany.

In a small panel discussion on the topic of “From Science to Business – Lessons from Israel to Build Entrepreneurial Ecosystems” Professor Dr. Eli Talmor and Professor Dr. Hossam Haick, Technion – Israel Institute of Technology, gave insights into their “double lives” as both scientists and entrepreneurs. Both Talmor and Haick especially highlighted the problem of keeping brilliant minds in research instead of losing them to newly founded companies. Still, they encouraged universities to support students that aim to turn their business ideas into reality.

In the second part of the event titled “Overcoming the challenges of startup M&A”, the focus shifted away from Israel. Successful serial acquirers discussed how they overcome the challenges of acquiring and integrating startups to boost corporate innovation. Jörg Rheinboldt summed up his personal formula for success stating that “it takes a good team to make a company work.” He also noted that the German attitude towards testing and failing is slowly changing. “Gradual failure is testing, epic failure is a problem,” he explained. A final panel discussion of the day brought together three “strangers in the corporate world”, Stephan Hülsen, Partner at Statkraft Ventures, Dr. Paolo Bavaj, Henkel CVC and Andreas Winiarski, Partner at Earlybird to discuss how to (not) set up a corporate venture capital unit in more traditional companies.

Professor Dr. Christoph Hienerth, Professor Dr. Eli Talmor, Professor Dr. Hossam Haick, Professor Dr. Markus Rudolf, Yakov Hadas-Handelsman, Monika Hauck, Amit Keren and Dr. Sven Greulich (f.l.t.r.)

Yakov Hadas-Handelsman, Israeli ambassador to Germany

Panel discussion with Dr. Sven Greulich, Amit Keren, Doron Abrahami, Prof. Dr. Eli Talmor and Jörg Rheinboldt (f.l.t.r.)

Axel Springer Plug&Play presents their strategy at "WHU Entrepreneurship Roundtable"

Professor Dr. Markus Rudolf, Dean of WHU