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　　Israel, the small country, is a magical existence in the field of global technological innovation.

　　Israel has a population of more than 9 million, accounting for only 1/10,000 of the world's total, but it is home to the founding and headquarters of thousands of startups. The country ranks second in the number of foreign-listed companies on the Nasdaq, behind only China, which has a population of 1.4 billion and whose innovation investment capital is dozens of times larger.

　　In 2020, when the epidemic is raging and global venture capital is slowing down, Israeli technology startups have completed up to 14 billion US dollars in financing, and during the same period, 15 billion US dollars of capital have completed the exit through the listing of 19 companies. The capital Tel Aviv, as a gathering place for venture capital, is highly active in technology deal flow, second only to Silicon Valley. According to a report, 11% of the global VC investment in the entire Industry 4.0 field goes to Israeli companies.

　　I believe that many people have similar questions: How does such a country that is almost "embarrassed" and so nervous that it has to be all soldiers, how can it create a miracle of venture capital? Recently, Silicon Stars came to Israel, met many people from the local entrepreneurial community, and chatted with them.

　　Entrepreneurial society trained on the battlefield

　　When describing how small Israel is, the locals often use a metaphor:

　　The world is six degrees of separation, that is, between any two people, at most five intermediaries who know each other can establish a connection; and Israel is a "one degree society", where everyone and everyone knows each other.

　　Interestingly, in the Israeli startup community, the metaphor doesn’t stray too far from the truth.

　　The close ties between entrepreneurs, mentors, investors, industry supporters, etc., play an important role in the vitality and success of the country's technology entrepreneurship market.

　　"In any other country in the world, those who graduate from college and enter technology companies as product managers, what do they rely on? What abilities do they have?" said a local analyst, "In Israel, the situation is different, we enter The mark of society is not coming of age at 18, but retirement at 21."

　　Due to Israel's compulsory military service, male citizens join the army for about three years (two years for women), and some outstanding soldiers can be promoted to officers during the compulsory service period to manage the next batch of recruits. As a result, large numbers of young Israeli citizens are generally trained and tested to lead teams and face life and death. After retiring, they brought management and the experience and mentality of sharing weal and woe with their comrades into technology companies.

Israeli soldiers Photo credit: Nati Shohat//Flash90

　　The experience of joining the military has not only brought closer camaraderie to technology practitioners, but also taught them to take greater risks, be brave in trial and error, and be tolerant of failure.

　　The analyst said to me: "Israelis know that they are going to die, but they don't know how long the deadline is. Maybe they will die tomorrow. So we Israelis start a business like this. A business decides whether you do it or not, maybe tomorrow. If you die, you are afraid of failure. As long as you are alive after today, the money you lost can be earned back tomorrow."

　　In Israel, even in the top companies of any industry, no one wears a suit. Almost all employees, regardless of their superiors and subordinates, dress casually and casually.

　　What's more, unlike the general work culture in other mainstream countries that "doesn't work out of position", Israelis are more accustomed to speaking out about ideas that are helpful to products, businesses, and companies, even if it means subordinates. Challenge the leadership.

　　"This mentality comes from the battlefield, and there is no difference between life and death between officers and soldiers," the analyst said. "Of course soldiers should obey orders, but if you have an idea that can improve the survival of all comrades Possibility, then you shouldn't hold back until everyone meets in the underworld before speaking out."

　　In addition to the military mentality, Israelis' military careers provide another layer of help in their entrepreneurial path.

　　Former Google employee Roy Baharav founded Hi Auto as a virtual ordering assistant for drive-thru restaurants. It is worth noting that Baharav and his co-founders have a common identity: "81 graduates".

　　For those young people who are more interested in technology before and during the military, there are also some more technologically related positions within the Israeli military establishment. The 81st Unit is one of the highest-ranking science and technology units, developing cutting-edge communications intelligence technology for combat and intelligence personnel.

　　As mentioned earlier, Israel is a country where almost everyone and everyone knows each other, and these comrades who worked with the 81st unit have also brought "comradeship" to work -- and entrepreneurship after they retired.

　　As a result, Unit 81 became the literal “Whampoa Military Academy” for Israeli tech startups. Its graduates further support each other after entering the technology industry, providing various liaison assistance to each other.

The 81st unit held a technology research and development meeting on fighting the new crown epidemic Image source | @IDF

　　Take Hi Auto, for example, both of its co-founders served in the 81st Unit. Baharav went to the United States to work for 16 years after his discharge from the military. His last job was to lead an advertising product department at Google; another co-founder, Eyal Shapira, is also a graduate of the military-civilian integration elite training program "Talpiot" (Talpiot).

　　The company's chairman, Zohar Zisapel, is a well-known Israeli investor and technology entrepreneur, known as "the father of Israel's high-tech industry". But he also has another identity as the former head of the Israel Defense Forces' electronic research department, which can be regarded as the "old leader" of the 81st unit.

　　According to the statistics of Calcalist, a local business newspaper, so far there are at least 100 graduates of Unit 81 who have founded 50 technology start-up companies after their retirement, covering defense technology, cybersecurity, mobile Internet, medical care, new energy, autonomous driving, In many fields such as enterprise software and cloud computing, the total financing has exceeded 4 billion US dollars, and the cumulative valuation has exceeded 10 billion US dollars. Among them, many companies have been acquired by American technology giants such as Amazon, Microsoft, and Intel.

　　Unit 81 also has a "twin" better known in the venture capital field, called Unit 8200. The latter is also an intelligence technology unit, and the main skill for training recruits is computer programming. Graduates of Unit 8200 have founded at least 1,000 startups, including security giant Palo Alto Networks, instant messaging pioneer ICQ, navigation technology company Waze (acquired by Google), network data company Onavo (acquired by Facebook), and Microsoft's Kinect technology. 3D vision company PrimeSense (acquired by Apple), etc.

　　It’s no exaggeration to say that Israel’s military tech graduates have revolutionized the local tech industry over the past decade, shaping the direction of the wave of venture capital.

　　The historical background of Israel's high-tech industry and entrepreneurship booming military industry is very obvious, but in fact, the investment in defense and military science and technology has been significantly reduced in the past 30 years, from more than 20% of GDP in 1981 to last year. 5%.

　　At the same time, more and more private capital appeared. Athena Venture Partners was formally established in 1985, marking the birth of Israel's first private venture capital institution. In 1993, the government began to use public funds to subsidize innovation investment and high-tech R&D.

　　An entrepreneur told Silicon Stars that Israel has the best public and private universities in the region, and its alumni have become the targets of top local and American VCs. …

Shared scooters can be seen everywhere in the streets of Israel. Image source | Duchen / Silicon Stars

　　Home market is a test field

　　The Silicon Stars noticed a key feature of an Israeli startup circle: the entrepreneurs here are more technical experts than market and growth experts, but they will take overseas and rapid expansion as important tasks in the early days of the company.

　　It’s no exaggeration to say that Israeli tech entrepreneurs don’t see the establishment/occupation of the domestic market as a key milestone. The domestic market is more like a test field for them to expand overseas for further growth.

　　Take several startup companies that the Silicon Stars met this time as an example:

　　From the very beginning, Verobotics wanted to enter New York, the city with the largest number of skyscrapers in the world, and even its market research was conducted in New York;

　　Hi Auto was founded in Israel, but the problem it solved happened in the American market with a huge car ownership;

　　Israel is surrounded by hostile countries on three sides, and sea transportation is the most developed surface transportation method, but Orca AI did not do its own shipping industry, but directly found Maran Tankers in Greece and NYK in Japan, two global shipping giants as partners.

The labor market for building exterior cleaning is highly in short supply in the United States. Source: Best-Wallpaper.net

　　Israel's own market is too small must be the most direct reason. An entrepreneur who wished to remain anonymous told me that their long-term vigilance against danger also taught them not to put all their eggs in the basket of their own country. The sooner they develop overseas markets, the better they can diversify their risks and improve their company’s success and survival rate. In addition, as mentioned earlier, a lot of capital (including financial and strategic investment) participating in Israeli venture capital comes from overseas, which lowers the threshold for these companies to enter overseas to a certain extent.

　　True Entrepreneurship for All

　　What many people may not know is that although the Jews seem to be very united to outsiders, in fact there are still contradictions within the Jewish nation in Israel, the most important of which is the contradiction between ultra-Orthodox (Haredi) and secular Jews. .

　　The Haredi Jews follow a very traditional way of life. Men do not work, their lifelong mission is to study the Torah, and they enjoy a small allowance from the Israeli government. The Haredi community is generally opposed to technology, with very limited use, and even more shut out of "advanced" technologies such as the Internet.

　　However, the sudden new crown epidemic has changed this traditional way of life that has been maintained for decades. Some Haredi men have had to go out to work, and around 1,000 or so have signed up for military service.

　　And the most interesting thing is that Haredy has also begun to devote more to technology entrepreneurship.

　　In 2015, two Haredi businessmen with successful entrepreneurial experience rented an entire floor of office building in Benebelac, which is close to Tel Aviv, and established a business incubator Haredi Hi-Tech Forum for Haredi compatriots. .

　　These men, who were once extremely resistant to technology, picked up their laptops. They no longer go to religious schools to study the Five Classics every day, but sit at the open workstations of the incubator, studying how to build websites and develop mobile applications, how to place online advertisements, how to integrate APIs developed by other companies, and how to communicate with investors. Talk about the thing you've ever lacked the most - money.

Haredi entrepreneurs recite and pray together during work breaks Source: Australian Public Radio

　　The incubator didn't upend all traditions. For example, the male-female incompatibility that Haredy followed was also followed in the incubator. The floor was split in two, one for female entrepreneurs and staff, and the other for Haredy men.

　　Other than that, this incubator is not too different from the many other incubators that exist in Israel: founders of incubating projects meet their mentors and predecessors, and each receives hundreds of thousands of new shekels (approximately USD approx. 3:1) Seed funding ranging from 1 to 1 year and a half, then build a team, build your own product, find customers, and run the business model.

　　In the process, the incubator will also cooperate with some cooperative VC funds and government agencies to provide early-stage financing of millions of NIS to the incubation projects.

　　The most interesting thing is that this group of entrepreneurs may have adapted to remote work earlier than the world.

　　Because most of Haredi’s living scope is limited to Bene Belac, and the business of Haredi’s entrepreneurs spreads all over Israel and even the world, they learned and got used to the remote and flexible working method very early. In order not to alienate their family and friends too much, some Haredi men still recite scriptures during the day and come to the office at night to continue their business...

Image credit: Australian Public Radio

　　Haredy entrepreneurs are a unique group. But their existence is the best footnote to the phenomenon of "all-people entrepreneurship" in a certain sense in Israel.

　　Israel's national entrepreneurship is not a "mass entrepreneurship and innovation" style, but has its own very unique attributes: entrepreneurs, investors, and giant companies support each other and share resources, but do not rely too much on relationships to break into the world, and It is the use of technical strength to achieve sales.

　　Although there are thousands of startups in Israel, the direct competition between them is not obvious, because everyone is looking for ways to go out, to North America, Europe and Africa, to see the wider and bluer sky. This is why the Israeli high-tech start-up market, which has existed for 30 years, still gives people a long-lost "big voyage" feeling.

　　The participation of global scientific and technological forces

　　At least 270 multinational companies, including Google, Apple, Meta, Microsoft, Huawei, Xiaomi, Lenovo, Sony, etc., have established more than 320 R&D bases in Israel. For many of these giant companies, the job responsibilities of local offices and employees are also This includes following and participating in the local innovation and entrepreneurship market.

　　However, there should be no institution that can surpass Intel's support for the Israeli venture capital market.

　　The company has invested a total of $43 billion in Israel, employed more than 14,000 people, and contributed 2% of Israel's entire country's GDP and $8 billion in technology exports (about 14%) by itself. The importance and uniqueness of the American tech giant's position in Israel is beyond doubt.

　　In fostering the local entrepreneurial environment, Intel is also one of the most important promoters. The company has cumulatively invested nearly $50 billion in Israel, of which at least $22 billion has been spent on financial/strategic investments in young local companies, as well as mergers and acquisitions.

　　A few years ago, Intel set up its own venture capital incubator Intel Ignite with Israel as its headquarters. Referring to the YC model, Intel provides all-round services such as investment, guidance, resource docking, and administrative support for the incubated startups. However, unlike YC's style, Intel Ignite is not "fraternity" despite the large number of Israeli startups. So far, it has only held five phases, and each phase only recruits 10 companies.

　　Tzahi Weisfeld, general manager of Intel Ignite, revealed to Silicon Stars that Intel is the most popular institutional investor in Israel and does not worry about deal sources. When a company enters the growth stage and needs more capital, the leading local angel investors and VCs will be the first to send these companies to Intel. "The 10 in each issue are all high-growth companies, and we'll use all our resources to help them be more successful," Weisfeld said.

　　Orca AI CTO and co-founder Dor Raviv told Silicon Stars that after his company was shortlisted for the Ignite incubator, Intel directly sent chip experts, VP Ran Berenson, who has worked in the company for 22 years and managed more than 2,000 engineers, and Professional counterparts, such as former Mobileye executive Tal Babaioff, are mentors of Orca AI. Not only that, but Intel will also open up the resources of its in-house technology development team to the young startup.

　　Relying on Intel's endorsement, Orca AI launched the company's self-developed ocean freighter intelligent perception/telemetry/avoidance system for the first time in Japan not long ago, and operated a test ship of Japan Yusen (NYK) through a fully remote control. Completed the first test.

Orca AI's onboard telemetry perception system Image credit: Duchen/Silicon/Orca AI

　　Hi Auto's Baharav told Silicon Stars that Intel is willing to mobilize global resources when incubating startups: for example, behind every intelligent question answering machine installed in customer stores is an Intel NUC minicomputer; the US headquarters will also be located in various customers. Hi Auto's solutions presented at industry conferences. Baharav said that Hi Auto was able to sign three first-tier US catering brands and enter 250 US stores within one year, largely due to the resource docking and endorsement effect provided by Intel.

　　Entrepreneur Ido Genosar was born into a family engaged in real estate development, but he himself is more passionate about technology entrepreneurship, so he combined the two and founded Verobotics, which developed a drone dedicated to cleaning the exterior walls of buildings. Verobotics drones have two sturdy robotic arms, each with a suction cup at the end, capable of gripping a building's glass, metal, or flat concrete exterior, just like Tom in Mission: Impossible 4. · Cruise climbing towers with the same suction gloves.

　　When the product was officially developed, Intel's Israel Research and Development Center (IDC) in Haifa became the first test customer. Genosar jokingly told me that in the early days of the company, the company focused on product development and neglected customer development, and Intel told him directly, "Come on let's try it first!"

　　How does the small country Israel create the miracle of technology venture capital? Some people think that the military experience of the entrepreneur and the national military technology foundation are more important, some people think that the highly active contribution of private capital is greater, and some people think that the success of entrepreneurship depends on the person—— There is no single answer to this open question, but at least by observing the technology venture capital field in Israel, we have obtained a lot of things that are worthy of reference and thinking.