What Canada can learn from Israel’s entrepreneurial ethos

IGrowth Curve n the heart of the Old City of Jerusalem sits a ruined citadel called David’s Tower. Fought over by King David himself, Romans, Arabs, Crusaders, Ottomans and Israelis, it’s now a museum spanning 4,000 years of history. But the castle is soon to assume another identity: as home to a startup accelerator specializing in virtual reality.

High tech/Old City is a fitting symbol for today’s Jerusalem. Since the publication of the 2008 best-seller Startup Nation, Israel has revelled in its reputation as an innovation power. But with most of that activity in Tel Aviv, Israel is now creating an innovation cluster in Jerusalem. It’s a city divided by history, faith and politics. But Israel’s innovation leaders hope this ongoing culture clash is a creative cauldron from which edgy, innovative ideas can emerge. Think Austin, Tex., or Boulder, Colo., but with more edge. (And hummus.)

Proof ? Three months ago, Silicon Valley goliath Intel acquired Jerusalem-based Mobileye for US$15 billion (equivalent to the combined market cap of Canada’s Shopify and BlackBerry). A leader in computer vision and artificial intelligence for autonomous vehicles, Mobileye spun out of the computer science department of Jerusalem’s Hebrew University — an institution founded in 1938 (30 years before Israel itself ) by such visionaries as Einstein and Freud. (So there’s Lesson 1: To become a Startup Nation, put education first.)

To defend its title, Israel annually selects entrepreneurs from around the world to visit the country to study its startup secrets and meet its coolest entrepreneurs. It also sponsors a journalist from each of those countries to cover “their” entrepreneur’s journey. I joined the tour this month along with Toronto entrepreneur Maayan Ziv, founder of an accessibility app called AccessNow. Although the propaganda was predictably heavy-handed, I came away convinced that Israel has much to teach Canada about innovation. And seeing Israel through Ziv’s eyes revealed how Canadians can better compete.

On Day One of our fiveday tour, my group of 22 journalists got some startling stats from Ran Natanzon, head of innovation and brand management (Lesson 2: Marketing matters!) for Israel’s ministry of foreign affairs. Natanzon said Israel ranks first in the world in R&D spending as a per cent of GDP. And it’s third, behind the U.S. and China, in the number of companies it has listed on NASDAQ. In 2016, venture capitalists invested US$6 billion in Israeli deals. That’s twice the US$3.2 billion invested last year in Canada (even though our GDP is five times Israel’s).

Clearly, Israel breeds aggressive entrepreneurs the way Canada produces hockey players. Natanzon listed numerous reasons for Israel’s entrepreneur surplus. Among them:

Israel has few natural resources, which means entrepreneurs have to create new value.

A limited domestic market means Israelis have to focus on exports.

Israelis display can-do attitude and a culture of challenging authority. They also have chutzpah, a unique confidence that MerriamWebster defines as “flagrant boldness.”

The flip side of Israel’s small market size means it’s easy to connect with influencers, because you already know someone who knows them.

Every Israeli youth is required to serve in the military (or another form of national service). Forced exposure to team-building, shared purpose, missionplanning and execution produces focused leaders at an early age.

We also visited a rehab hospital that’s now commercializing its breakthroughs — such as a $100 wheelchair made of plastic; Hebrew U’s tech-transfer office; and an accelerator that is bringing entrepreneurship training to a downscale neighbourhood, with special programs for primary schools, women and the oft-neglected Arab and ultra-Orthodox populations.

We met with such companies as Mobileye and its spinoff firm, OrCam Technologies, which uses Mobileye’s vision systems and AI to create an eyeglass-shaped device that reads signs, text and money, reading everything aloud to the wearer, giving new mobility to the visually impaired. (An IPO is in the works.)

We also met Jon Meved, the founder of OurCrowd, an equity crowdfunding platform for global startups and accredited investors. And within the stone walls of the Tower of David, we met virtual-reality entrepreneurs who are out to revitalize the museum experience and change the way you shop.

Meanwhile, my designated entrepreneur, Maayan Ziv, was on a mission of her own. She is still trying to monetize her AccessNow app, which enables users to rate buildings and locations anywhere in the world on their accessibility to people with disabilities. Ziv herself lives with muscular dystrophy, which has left her needing to get around in a wheelchair. With two Israeliborn parents, she speaks Hebrew and knows the culture, so she was eager to meet potential Israeli partners or investors.

Ziv says she was truly impressed by Israel’s entrepreneurial ecosystem. “The thing that struck me most is the way they think globally from day one. They are constrained; even if they want to trade with their neighbours, they can’t. I think that’s why they’re so successful.”

The notion that Israel wins due to its constraints hit home to Ziv because of her own limitations: “When you’re stuck within a narrow focus, it makes you think harder about how to be creative.” Toronto entrepreneur Maayan Ziv is trying to monetize her AccessNow app, which enables users to rate buildings and locations anywhere in the world on their accessibility to people with disabilities.

She had to hone her own leadership skills in primary school: at recess, she would devise new games or imaginative proposals to keep her schoolmates by her side when they might otherwise romp across the schoolyard. “I think this is the reason I’m an entrepreneur to begin with,” she says. “My life pushed me to think within boxes and figure out how to get past them.”

So, for Canadian businesses with so much access to natural resources, opportunities and U.S. markets: don’t let this gift hold you back. Work harder. Think outside. Go global, not California.

But can we overcome the chutzpah gap? “Canadians could definitely use more confidence,” says Ziv. “It’s okay to show off a little, and even say, ‘We’re the best,’ when we are. I don’t think we do that very well, although I think we’re getting better.”

And Ziv offers more hope. “Israelis are impatient and they want to grow quickly,” she says. “But patience can be a double-edged sword. Patience is a form of support. It means you’re open to listening to others. We do that well in Canada.”