As a little Christmas bonus this year, we thought we’d try to stuff one more speaker breakfast into our stocking—and what a gift it was! Joined by iAngels’ Shelly Hod Moyal, our Sydney members were treated to an insider’s view of Israel’s much respected start-up ecosystem.
Israel has been causing a stir in the start-up scene for some time. How does this relatively small nation (of around 7 million people) foster so many innovative businesses?
According to iAngels’ Shelly Hod Moyal, innovation is ingrained in the Israeli culture: ‘Israelis are problem solvers. We are a start-up country; we had no natural resources and we’ve really had to build the country from scratch.’
In her lifetime, she’s already seen many problems transformed through innovation: ‘When I was a girl, I remember Israel was running out of water; it was a real problem. So, we became leaders in water filtration; and 20 years later, the threat of running out of water is no longer.’
The at times difficult relations with neighbouring countries has also been a source of Israel’s problem solving mindset. ‘Many of the leading technologies for cyber security were developed in the army.’
What began out of necessity has now been channelled into entrepreneurialism, which is world class. ‘Because we’re such a small country, the entrepreneurs in Israel are thinking global from day one. It allows us to get faster to market.’
As Israel looks to the future, Hod Moyal believes they are well placed: ‘When you look at the world today, we believe a lot of wealth creation is going to come from innovation as well as the disruption of traditional industries and finding better ways to do things.’
Hod Moyal is now attempting to disrupt the start-up business model in her own fashion, by changing the way that start-ups and angel investors come together. ‘I was thinking, “there has to be a better way, a way that can benefit both entrepreneurs and angels.”’
Having a foot in both camps, Hod Moyal was well positioned to see what both the entrepreneur and the angel needed to make an investment work. iAngels looked specifically at the research and due diligence process to see how they could better improve the match: ‘We developed our own IP and process around finding the best entrepreneurs and best start-ups to invest in.’
‘We don’t invest in ideas. We do invest in teams and companies that have some initial traction.’ Because of this, Hod Moyal believes getting to know the people who make up these teams—their strengths, weaknesses and who they work well with—is a key predictor of success. They engaged a PhD in psychology to guide the elements of their process and help them to identify the right people.
She believes the right people can develop an idea, even if it’s nowhere near finished: ‘We don’t analyse the product as if it’s a finished product. We look at the market need to determine whether or not it makes sense. What’s the problem they are trying to solve?’
By collating the learnings from her own investments and entrepreneurial experience, she’s created a system that works; vetting start-ups and their ideas efficiently, before recommending them to investors globally.
People will always be key to this process:‘The biggest successes, like Facebook or Uber, weren’t just successes because of the technology. They were successful because they changed the way the industry worked.’
So, what is she looking for? ‘In terms of the entrepreneur—we don’t just look at their business track record, but also their track record in life. What they have gone through and how they have worked through it. We look at how these entrepreneurs create partnerships and relationships; how flexible they are and their candour—are they being realistic about what they can do?’
And, before you tell Hod Moyal that your start-up is the first to think of the idea, you may want to pause. ‘When people tell me they have no competitors, you have to question whether there really is a market.’
Thankfully though, there’s an abundance of talent in Israel, which, when combined with Israel’s relatively mature ecosystem, the right mix of accumulated knowledge, seasoned investors and experienced entrepreneurs sees it stronger than most. ‘Many of the companies who acquire our start-ups require them to stay on for a year or two, they return to Israel with even more knowledge and skill.’
The significant talent pool, a culture that applauds problem solving, and a high tech exposure, make Israel well poised as a start-up ecosystem for sustained growth and success. It’s something iAngels is proud to be a part of: ‘The underlying assumption for what we’re trying to accomplish is to really bring Israel from being a start-up nation to a partnership nation.’
As Shelly Hod Moyal visits Australia to foster her relationships here, she leaves us with a lot of inspiration for what our local ecosystem can aspire to be, with the right cultural support.
We know this time of year is busy, so if you did miss this special breakfast, we’d encourage you to watch the video recording. We also invite you to register to iAngels platform at www.iangels.co to gain access to the most interesting technology start-up investments out of Israel.
From all of us at Innovation Bay, we hope you have a safe and Merry Christmas, and we look forward to seeing you again in the new year!