The dozen students listening to a lecture in the TRI/O Tech entrepreneurship hub in the Israeli-Arab town of Kafr Kassem are smart. They switch from Arabic to Hebrew to English as they hone their start-up pitches or critique each others’ business models. When the lecturer asks a question like “What happened to Teva after they decided to export their medicines?” several students jump in at once with commentary.
Most are 20-something engineering and computer science grads from Israel’s top universities. Most work at prestigious companies like Microsoft, Apple and Amdocs. None lacks tech skills or the opportunity for a high salary.
But they dream of something more: building their own company, taking it public. Who knows? Maybe becoming the first Israeli Arab unicorn.
That’s why these students are here, at Israel’s first Israeli Arab start-up school, a joint venture of two Israel-based nonprofits — the MIT Enterprise Forum and Tsofen — with financial backing from the US State Department. The school meets for four intense hours every Tuesday night, and offers hands-on lessons in developing a business concept, market research, strategy, attracting investors, self-presentation and negotiating.
Ayla Matalon, executive director of the MIT Enterprise Forum Israel, an educational and networking nonprofit for the start-up community, told The Times of Israel that the school had reached out to over 1,000 candidates, interviewed 60 and in the end selected the 16 students they thought had the most potential to eventually launch their own start-up.
In July, TRI/O Tech will launch an accelerator at Kafr Kassem, a half-hour drive northeast of Tel Aviv, for graduates of the course.
“These are young people in very high positions in their field,” said Hans Shakur, an Israeli Arab high-tech entrepreneur from Acre who works as a consultant to Tsofen, a nonprofit that seeks to integrate Arabs into Israeli high tech.
“Most of them have the high-end tech background and the energy, but don’t have the chutzpah yet to start their own company. That’s why we’re here.”
Mohamed Abo Khater, 23, a Haifa University student who grew up in the Triangle region near Kafr Kassem, is one of the students in the course. He is developing an app that will solve “the pain point I experience every day, of waiting for the bus 10 or 15 minutes, sometimes in the rain, without knowing when it will come.”
Asked if there isn’t an app that already does this, Abo Khater replied confidently, “Yes, Moovit, they’re our competitor. But our app will have a feature that makes us better.”
Abo Khater said he was blown away by the quality of the people he has met in the start-up school, and was trying to recruit his fellow students to work for him.
“There are high quality people here that I don’t meet every day. I’m here to make connections and find people here to work in my start-up. I will fight to get into the accelerator. You have to have a brilliant idea.”
Samah, from the Bedouin town of Rahat in Israel’s south, is one of two women in the course. She said she spent four years as a quality assurance engineer for EMC but soon felt “bored” at work and dreamed of launching her own venture.
“I have an idea for a niche social networking app,” she said, “but I can’t tell you more at this stage.
A revolution in numbers
According to Hans Shakur, the low number of women in the course reflects the low number of female Arab entrepreneurs in Israel. However, in the last few years, there has been a revolution in the number of Arab students studying engineering and computer science. While Israeli Arabs constitute 20 percent of Israel’s population, they are 23% of graduates of the Technion, Israel’s premier science and technology university. Of these Arab graduates, 64% are women.
Despite these numbers, said Shakur, if you take Israel’s civilian, as opposed to military, high-tech sector, with its approximately 100,000 jobs, only 4% of those are filled by Israeli Arabs.
Nevertheless, he pointed out that 4% actually constitutes progress compared to eight years ago when Tsofen was founded and Arabs were only one half of one percent of Israel’s high-tech employees.
Over the past eight years, Tsofen has helped place Israeli Arabs in high-tech companies by helping them with soft skills such as honing their resumes and networking, and has similarly urged high-tech companies to open offices in Arab towns and villages.
Shakur cited Nazareth as a test case. Eight years ago, there were only 30 high-tech engineers employed in the city. Today there are 800, both Jewish and Arab, 25% of whom are women. Microsoft is opening an office there. The city hosts accelerators, tech events and at least 30 start-ups that receive funding from the Office of the Chief Scientist. The Israeli government provides at least 85% of seed funding, or up to 2 million shekels, for start-ups where at least a third of the founders are Arab. Ultra-Orthodox start-ups also get the same 85% grant while other population groups get only 50%.
Shakur himself founded Mobile Monday Nazareth, a group that brings together entrepreneurs, professionals, developers and investors in Nazareth to help grow the city’s high-tech scene. Shakur is the owner of Markitect, and a founder and partner of Games for Peace.
Shakur said that Tsofen’s goal is to reach 10% Israeli Arab representation in high tech by 2020 and ultimately to reach 20%. Locating companies in or near Arab communities will make a huge difference, especially for women.
“Women are pursuing more and more academic degrees. But when they get married and have children it’s not feasible for them to travel every day from the Upper Galilee to Tel Aviv. That’s one reason why many female Arab graduates of the Technion become high school teachers.”
Shakur said that TRI/O Tech’s plan is to offer five start-up courses over the next three years and to grow Kafr Kassem into a high-tech hub that exceeds Nazareth in size and scope.
“At any given moment the Israeli high-tech industry has a shortage of over 5,000 engineers. In three years it is predicted to be 10,000 engineers. [Prime Minister Benjamin] Bibi Netanyahu has even spoken of importing high-tech talent from India.”
But Shakur has a different idea.
“Let’s invest in the human talent we have here. You have so many women, for instance, who are talented graduates of the Technion. It’s win-win for all.”
No binary options or forex please
Asked about the thousands of Israeli Arabs working in the binary options and forex industries, most often in call centers, Shakur said these are not the kinds of jobs he would like to see people taking.
“We all know — you can follow the media reports about it — that forex and binary options sound like a scam. If someone from the community is working as a sales representative in a call center, for us it is as if they are unemployed.”
Shakur said that word was getting out in the larger Arab world that forex and binary options are fraudulent and some people are even aware that there are Israelis behind it.
“You sometimes see discussions on Arab social media pointing to Israelis as being behind the online gambling, binary options and porn industries.”
A larger vision
Shakur said that Tsofen has an important role to play in society as a whole.
“The more Arabs with academic degrees we place in high tech, the more economic and social development we get, the more we leverage the economy of the Arab sector, and that’s good for the country.”
Shakur charged that for 70 years the attitude of the Israeli government and administration towards the Arab sector was one of discrimination and neglect, but now there’s a chance to change that.
Tsofen, he said, is “not in the hope and peace business. It’s not Tsofen’s agenda, and yet it’s on the agenda. We need to create a cycle that fosters hope.”
Asked whether high tech can really solve society’s social ills, since there are not enough high-tech jobs for everyone, Shakur responded, “It’s true that high tech is about smart people. But what’s happening in Nazareth where you have Arabs and Jews and women all working together — it’s a model, it shows that living together is possible. Also, maybe those smart people will bring a solution for everyone.”
He added, “Let’s say in 80 years [since 1948] we can manage to bridge the huge economic gaps between Jews and Arabs, just imagine what the next 80 years will hold in store for Kafr Kassem.”