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![Questioning Authority:
PayPal acquired an Israeli startup named FraudSciences.
President Scott Thompson went to Tel Aviv to meet with the
FraudSciences team.
He told [Senor & Singer] about his first meeting with the staff:
Every question was penetrating. I actually started to get nervous
up there. I’d never before heard so many unconventional
observations — one after the other. Junior employees had no
inhibition about challenging how we had been doing things for
years. I’d never seen this kind of completely unvarnished,
unintimidated, and undistracted attitude. I found myself
thinking, “Who works for whom here? Did we just buy
FraudSciences, or did they buy us?”
Source: Dan Senor, Saul Singer, Start-up Nation: The Story of Israel's Economic Miracle: Published by Twelve (Reed Elsevier), 2009.](https://image.slidesharecdn.com/startupnationisrael2017short-170318123458/75/GEC-2017-Ayla-Matalon-28-2048.jpg)
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GEC 2017: Ayla Matalon
- 1. It takes aVillage Start-up Nation Israel Evolves Ayla M. Matalon MIT Enterprise Forum of Israel in cooperation with the Coller School of Management Tel Aviv University
- 2.
- 3. Innovation & LargeCompanies
- 4. Innovation & LargeCompanies
- 5. © B lu m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l Startup Nation Israel Sources: EY Report, Geektime Annual Startup Report, PwC Exit Report, NASDAQ, Startup Nation Central #1 Startups Per Capita 89 companies on NASDAQ #1 Expenditures on R&D per Capita $4B Funding raised in 2015 $11B 2015 exits and M&A value >50% Exports derive from Hi-Tech and Life Sciences
- 6.
- 7. Entrepreneurship Enablers Physical Infrastructure •Education & Skilled Labor • State Efficiency • Adequate Legislation • Government Support • Financial Infrastructure • Corruption
- 8. Academic Infrastructure • Technion– Israel Institute of Technology (1912) • The Hebrew University of Jerusalem (1925) • Weizmann Institute of Science (1934) Israel (1948) + Government Research Institutes
- 9. © B lu m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l Academic and Technical Leadership #1 TAU has most VC backed entrepreneurs outside US (#9 Global) 4 Universities in top 50 Shanghai ranking for CS Sources: Pitchbook, Wallstreet 24/7 special report, OECD, Shanghai Ranking, Worldbank 2010 #2 Among OECD in post high-school education (46% vs average of 33%)
- 10. Engineers per 10,000Employees (135)
- 11. Government Centers of Excellence: + * Crypto *Image Processing * Communications * Speech Recognition Tel Aviv voted 2nd most supportive place for start-ups WW Startup Ecosystem Index’s Report Supportive Infrastructure
- 12. My Market liesOver the Ocean Israeli Entrepreneurs Look Overseas to their Market
- 13. Entrepreneurship Enablers Social Infrastructure •Flexibility and Adaptability (Uncertainty) • Independent Thought • Informal; Low Power Distance • Tolerance for Failure
- 14. Entrepreneurship: OK toFail? • Most start-ups fail Apple crushed Modu yet… a phoenix of startups rose
- 15. It is OKto Fail Case Study: Singapore Singapore’s launch to encourage entrepreneurship. Ed Mlavsky, Entrepreneur & VC: “I told the Singapore minister that his country would never be able to build a technical entrepreneur-based VC industry due to the prevailing culture of ‘fail once and you’re out forever’. … Several years later, I was shown the new syllabus in high schools in which ‘it’s OK to fail and start all over if you give it your complete commitment’ was the message.” Source: Dr. Ed Mlavsky, entrepreneur and VC , & the “father” of the BIRD Foundation. Dr. Mlavsky played a major role in role in turning Israel to the Startup Nation it has become.
- 16. © B lu m b e r g C a p i t a l 2 0 1 6 | C o n f i d e n t i a l The Israeli Culture • “Chutzpah” • OK to fail • Immigrant culture – flexible, understand adversity, inventive • Dream big • Heavy responsibilities at early age Source: Harvard Business Review, Erin Meyer
- 17. From Jaffa Orangesto Start-up Nation
- 18. Theodor Herzl: Co-Founder,Israel “If you Will It, It is no Dream”
- 19. Until late 70’s •First Global R&D Centers • Start-up Seeds • First investment bodies: Discount Investments, Elron • BIRD Foundation • Government regulated • Agriculture, Tourism, Textile + Defense • Gov’t R&D Support
- 20. The 80’s: moreStart-ups (+ … Start-up Nation Goes to School: more Multinational R&D Centers) + a VC: Athena
- 21. In 1990 theIsraeli Export Institute forecast for the decade to come saw the export of Oranges as the leading export sector
- 22. • Private sectorbring 1.5 times gov investment • Structured as Limited Partnerships • 5 year buy back period exercised by 8 of 10 • No government involvement • No special taxes Birth of Israel VC industry The Yozma Initiative
- 23. IT Sector Drives1990’s Growth • +16% per Annum (average) • 5% GDP (1990) ->14% (2000) • 1/3 GDP total Growth • IT Exports Grew X6 • Reached $15B by 2000 • 1/3 total Exports
- 24. 24 Exports by technologyintensity Source: BOI 0 200 400 600 800 1000 1200 1400 1600 07/200001/200107/200101/200207/200201/200307/200301/200407/200401/200507/200501/200607/200601/200707/200701/200807/200801/200907/2009 High Technology Industries Low Technology Industries Medium-Low Technology Industries Medium-High Technology Industries $ millions
- 25. Industrial production by technologicalintensity Source: Makov report (2007), CBS (Israel 2008). EU average: Italy, Belgium, Denmark, Finland and France. 21 25 30 30 24 25 33 30 24 36 31 31 31 15 6 10 0 20 40 60 80 100 120 Israel USA Canada EU average Low-Tech Medium-Low Tech Medium-High Tech High-Tech
- 26.
- 27. Outsiders’ Views Bill Gates,Founder & CEO (ret.), Microsoft “Israelis have a high rate of computer literacy … Israel is a major player in the high tech world… The quality of the people here is quite fantastic. The level of techY integration puts Israel at the cutting edge of world technology.” Ray Stata, Co-Founder & Chair, Analog Devices “Israelis are capable of Making the Impossible Possible” Larry Ellison, Co-Founder & CEO, Oracle "What's really different about Israel compared with other places we do business is the number of partners we have in the technology area. Israel has always had a wealth of intellectual talent."
- 28. Questioning Authority: PayPal acquiredan Israeli startup named FraudSciences. President Scott Thompson went to Tel Aviv to meet with the FraudSciences team. He told [Senor & Singer] about his first meeting with the staff: Every question was penetrating. I actually started to get nervous up there. I’d never before heard so many unconventional observations — one after the other. Junior employees had no inhibition about challenging how we had been doing things for years. I’d never seen this kind of completely unvarnished, unintimidated, and undistracted attitude. I found myself thinking, “Who works for whom here? Did we just buy FraudSciences, or did they buy us?” Source: Dan Senor, Saul Singer, Start-up Nation: The Story of Israel's Economic Miracle: Published by Twelve (Reed Elsevier), 2009.
- 29.
- 30. Israel’s Entrepreneurial Infrastructure ITTAKES A VILLAGE Ayla Matalon MIT Enterprise Forum of Israel
Editor's Notes
- #2 The Paradox of Choice: Why More Is Less - Barry Schwartz eliminating consumer choices can greatly reduce anxiety for shoppers
- #3 The Paradox of Choice: Why More Is Less (Barry Schwartz) eliminating consumer choices can greatly reduce anxiety for shoppers The case of S and L: VP R&D @ Large multinational that acquired Israeli medical device Start-up: How come You made it with a team of 3 dozens, …? The example of V and M Intimate.., Committed.., Focused …Coheseve
- #4 The Paradox of Choice: Why More Is Less (Barry Schwartz) eliminating consumer choices can greatly reduce anxiety for shoppers The case of S and L: VP R&D @ Large multinational that acquired Israeli medical device Start-up: How come You made it with a team of 3 dozens, …? The example of V and M Intimate.., Committed.., Focused …Coheseve
- #5 The Paradox of Choice: Why More Is Less (Barry Schwartz) eliminating consumer choices can greatly reduce anxiety for shoppers The case of S and L: VP R&D @ Large multinational that acquired Israeli medical device Start-up: How come You made it with a team of 3 dozens, …? The example of V and M Intimate.., Committed.., Focused …Coheseve
- #7 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #8 We talked about benefits of entrepreneurship, its power to create change… Now What are the Environmental MUSTS which Foster Entrepreneurship? Where and when does Entrepreneurship Flourish?
- #9 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #10 Example of Daniel doing an MBA in entrepreneurship and innovation Source: Embassy of Israel , http://pitchbook.com/news/articles/the-top-50-universities-producing-vc-backed-entrepreneurs http://247wallst.com/special-report/2012/09/21/the-most-educated-countries-in-the-world/3/ http://www.oecd.org/edu/Israel_EAG2013%20Country%20Note.pdf http://www.shanghairanking.com/SubjectCS2013.html
- #11 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #13 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #14 Low Power Distance, questioning authority
- #15 U.S. SBA (Small Business Administration): ½ of all start-ups fail within the first 2 years ~ 60% to fail by 4th year And yet… From Modu's ashes, a phoenix of more than a dozen startups. Apple crushed the innovative cellphone maker, but former employees went on to create their own companies.
- #16 (‘soft’ borders: queuing for illegal parking)
- #17 https://hbr.org/2015/10/when-culture-doesnt-translate
- #18 Recap: We spoke about why Entrepreneurship… When Entrepreneurship flourishes… How Entrepreneurship can transform a Nation; Let us now look at what E-P Did to Israel…
- #19 Recap: We spoke about why Entrepreneurship… When Entrepreneurship flourishes… How Entrepreneurship can transform a Nation; Let us now look at what E-P Did to Israel…
- #20 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #21 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #23 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #24 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #27 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #28 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’
- #29 (‘soft’ borders: queuing for illegal parking)
- #30 Growth Engine Small firms -> 67% new jobs X 16 innovation Teenagers: Facebook, Twitter, PayPal, Google, Amazon, Wikipedia In their 20’s: AT&T, Qualcomm, Dell, Cisco In their 30’s: Apple, Microsoft Social Aspects Empower, Self Realization (Carl Rogers, Humanistic Approach, 2nd to Freud) game theory economist Mancur Olsen: SIGs prevent new comers from joining - Counter less efficient ‘SIGs’