By Pallava Bagla
JERUSALEM: If Prime Minister Narendra Modi's Independence Day dream of India succeeding as 'startup' country has to kick start, there is a lot to learn from the original 'startup nation' Israel. The tiny country of Israel mushrooms almost two new startup companies every day and today houses some 5000 startups. New Delhi of course is just starting up!
On being asked if Modi's call for a 'startup India' can succeed, Israel Prime Minister Benjamin Netanyahu said "As far as the 'startup nation' I think this has a lot to do with entrepreneurial spirit. I have noticed that in Silicon Valley (USA), you hear Indian dialects and you hear Hebrew, sometimes you hear some English, which means there is a lot (happening). There is a lot of spirit for enterprise in both our countries."
He also added that he expects "a lot" from Indo-Israeli relations and that he was "anxious to meet Prime Minister Modi again in September in the UN just a few weeks away".
Meanwhile in a few weeks, President Pranab Mukherjee is expected to visit Israel and when that happens he would make history by becoming the first Indian head of state to ever visit Israel. Israeli diplomats in Jerusalem say Mukherjee will definitely be given a flavour of the huge innovation capacity of Israel.
Mushrooms find it hard to grow in the arid environment of Israel but startups mushroom all over, in garages, in attics in glib office buildings in basements of university cafeteria; in this holy land, it is hard to cast a stone that may not hit a startup somewhere.
One such top-notch firm is located in the heart of the Negev Desert where due to the dry heat nothing really grows yet enterprise flourishes irrigated by the human brain. Jerusalem Venture Partner's (JVP) is rated one of the best in the world in its domain. It nurtures and grows infant ideas and in the last four years, it helped create 120 companies worth 1.3 billion dollars. Today its affiliate JVP Cyber Labs is working on the hot topic of cyber security, which Israel believes is an untapped market.
In Israel they don't talk about how their cyber sleuths allegedly used the 'Stuxnet' a computer virus to attack and disable the uranium enrichment plants of Iran, but what the Jewish experts do talk about is how vulnerable are the smart phones we use almost like lifelines. They emphasise how identity theft should worry almost anybody who uses the Internet. Israeli cyber experts suggest that open Wifi connections are some of the most vulnerable and easy conduits for cyber thefts.
JVP Cyber Labs is working on how to make mobile data communication safer. The concept of mobile wallets is yet to catch up in India, but with the rampant seeding of Aadhar numbers and once they get linked to bank accounts and the direct transfer of benefits becomes common place, at that point cyber security of smart phones and anti-hacking software will have to be put in place by all and sundry. A fertile market for the 900 million mobile phones that dot India.
Meanwhile, what gives Israel a unique startup ecosystem? It is not the economy, it is the culture! Yoav Tzruya, Partner, JVP Cyber Labs, Beer Sheva, Israel says "One of the basic cultural differences that exist in Israel as a startup nation is how we look at failure. In Israel, we do not penalise failure per se; we look at the entrepreneurs who have created their companies that have failed as people who have gained from their experience.
"We have been asked by many countries around the world to replicate it, the successful model of innovation and always culture was an obstacle, people that founded startup and failed were looked down upon. It is critical actually to embrace failure, learn from it rather than look down upon it." Enthused by Modi's latest call JVP is planning to open an India operation.
To encourage more global companies to learn about the exciting startup environment the Israeli government organises a road show what it calls 'Start Tel Aviv'. This global event brings together startups from different countries to take part in an intense, five-day startup experience. Next to be held in September where one Indian company 'Audio Compass' an Indian startup that makes software which transforms regular smart phones into a personal audio tour guide helping tourists get a flavour of what they see, it will showcase its product in Israel.
Ditza Froim, Minister Counsellor, an Israeli diplomat at the Embassy of Israel said, "Ideas, dreams and willingness to take chances are the pillars of innovation and entrepreneurship. For Israel, these are the essence of our existence and the pillars of our security, society, culture and economy. Israel has established a vibrant sustainable economy with GDP per capita of about USD 37,000, a global leader in the field of agriculture and a hothouse for innovations, entrepreneurship and startups.
"Through its human capital, Israel generates more startup companies than large, industrial nations like Japan, China, Korea, Canada, Germany and the UK. In addition, Israel has attracted per capita, over twice as much venture capital investment as the US and 30 times more than all the members of the European Union combined."
Modi may want to learn a little publicised secret of how Israel nurtures the startup environment. It does it through incubators that are set up by the Israeli government. These special purpose vehicles give USD 600,000 risk free loan to promising starts ups. It may come as a big surprise but if companies fail, they do not need to pay back the loan but if they succeed, they pay back a 3 per cent annual royalty.
In India on the other hand if the Modi government were to extend such a facility the Comptroller and Auditor General of India (CAG) would ask so many questions that sooner than later on prime time television the 'nation would want an answer' as to how such a big scam took place under the command of the prime minister.
Another big reason for Israel's success as a startup nation is the tight embrace between companies, university researchers and entrepreneurs. If Prime Minister Modi's mission of 'startup India' has to succeed the country as a whole will have to change the way Indians views failures.
Even in Israel not all startup make it big, but then disappointments are viewed positively truly in the spirit of failures being the stepping-stones to success and this probably what makes Israel a powerhouse of innovation.
On your upcoming visit to Israel, Modi, please conduct a town hall meeting between Indian and Israeli entrepreneurs to gain from each other in a win-win partnership.
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