Weather, Wealth, Tech: What’s Not to Love About Life in “The Startup Nation”?
Tel Aviv, Israel, is best known for its sunny weather, innovative business scene and bustling population. Combine this with hundreds of cool spots to hang out, a great beach and good weather, and it really should come as no surprise that Tel Aviv is an ideal place for startups.
“Tel Aviv (and the its surrounding metropolitan cities) brings together all the talent Israel has to offer, concentrated in a few square miles,” says Yossi Konijn of LogiDiet. “Within this small area it is easy to find people who work at Google, Intel, Microsoft or any of the leading global tech companies. … Just sitting at a coffee shop you will hear people talking about their new startup or the next big idea.”
Konijn says each day in Tel Aviv brings new events and meet-ups where entrepreneurs can network with fellow startups and investors. As a result, he says, Tel Aviv is the perfect place to launch a startup.
Israel is even nicknamed “The Startup Nation”—and the statistics back it up without a doubt. With a population of only about 8 million, Israel is home to approximately 4,800 startup companies and attracts far more venture capital per person than any other country in the world, according to U.S. News & World Report. Those numbers become even more significant when you consider that the country itself is just 65 years old.
But even though these figures make Tel Aviv seem hyper-competitive, entrepreneur Ariel Beery of MobileOCT says that Tel Aviv has a very welcoming atmosphere.
“No where else is there such a breadth of open spaces for entrepreneurs to work, coffee shops with free internet and no rules against sitting and working all day, and such a large number of entrepreneurs and former-now-exited entrepreneurs to learn from,” Beery said.
Another notable aspect about the Tel Aviv startup scene? Even competing businesses support each other.
“Tel Aviv is extremely open and friendly, with almost anyone accessible within a short bike ride or bus trip,” Beery said. “The culture is open and inviting.”
And the country has proven to be a launch pad for some of the most successful startups to date: Both Waze and Fiverr began in Israel. Google purchased Waze, a mobile GPS app that relies on its users to report real-time traffic updates to help drivers find quicker routes, for a staggering $1.3 billion dollars, according to The New York Times. The move was generally seen as Google’s effort to dominate the online maps industry, as it already owns the popular service Google Maps. Fiverr is an aptly named online marketplace where users share what tasks they’re willing to do for $5. Fiverr is viewed as a solution for out-of-work or underemployed individuals who are looking to make money and need a place to market their skills in the modern global marketplace.
Despite Israel’s two major success stories, it’s not always an easy journey for new businesses. Like any place, the city is not without its challenges for an early-stage startup.
“The only thing Tel Aviv could really use is more investors,” says Konijn. “Most Israeli investments come from (venture capitalists), who rarely invest in the seed stages. Angel investors are rare and hard to come by.”
Tel Aviv’s high cost of living—it’s the 31st most expensive city in the world—also can be difficult for companies just starting out, says Konijn. Finding good employees in such a thriving market is tough, too.
“The competition over good talent is also problematic,” he said. “Everyone has a startup in Tel Aviv and hiring good people to join you, especially during the early stages and before real funding is achieved, is not easy.”
Location also can be challenging, too.
“We are far from the markets that a startup is usually addressing. Whether it’s the U.S., U.K. or any other, it’s far by mentality, distance and time zones,” says Omri Shor of MediSafe. “This carries out a series of challenges ranging from language and cultural differences to working hours.”
In spite of the obstacles, others still see Tel Aviv as an ideal incubator for startups. Pär Iwarson of Jumblets said he is traveling to the city from Sweden to participate in the Challenge Cup event that will take place on Feb. 6.
“Tel Aviv may be the regional final where the competition is hardest of all,” Iwarson says. “But on the other hand I look forward meeting some really brilliant minds to exchange thoughts and experiences with, and I’m sure I will learn a lot just from the experience.”
Teresa Tobat is a freelance writer and editor based in the Washington, D.C. area. View her website at teresaktobat.com.