It takes a village — or, rather, an ecosystem — to build a successful start-up. And according to a study released by the Startup Genome Project, a project whose mission is to help start-ups succeed, Tel Aviv has one of the world’s top “start-up success ecosystems.”
The folks at the Startup Genome know what it takes to succeed; the project was started last year by Silicon Valley entrepreneurs Bjoern Herrmann, Max Marmer, and Ertan Dogrultan, who set out to build a “best practices” guide that would help struggling start-ups to make it. After a year of research and experimentation, in which they worked with over 13,000 start-ups, the group says that its research has paid off with methods that “suggest significant improvements in focus, iteration speed, time to pivot and effective outreach to mentors & service providers.” The group has even developed an on-line Startup Compass tool that entrepreneurs can use to determine whether they are running their business in a way that will likely bring them success, or are just running it into the ground.
As such, the Statup Genome people have become quite familiar with the elements needed for success, and one of those elements is what it calls “the ecosystem.” After having evaluated thousands of companies with its online survey, “we have now crossed the threshold of critical mass of data in the world’s top startup ecosystems to begin comparing them to each other. For the first time we now have the opportunity to create a Startup Ecosystem Index with a live pulse on how the world’s startup ecosystems are evolving.”
Tel Aviv ranks right up there (number 5 on Startup Genome’s list of the top 25 ecosystems), behind Silicon Valley, New York, London, and Toronto, and ahead of Los Angeles, Singapore, Sao Paulo, and Bangalore. And way ahead of other contenders, like Seattle, Austin, Paris, Chicago, and Washington, DC.
The ecosystem report is long and full of insights about what makes a city a likely place for a start-up to succeed. Startup Genome has not yet released the full comparative analysis on what makes one place a more likely success location than another (although it has released comparative insights for Silicon Valley, New York, and London). But looking at the criteria the group considered, it’s clear that Israel, and especially the Tel Aviv metropolitan area, has a lot going for it.
Among the areas where Israel excels on this list are mentorship, thought leadership, and work ethic — qualities that many multinationals (including Motorola, Google, Microsoft, IBM, etc.) say they see in their Israeli work forces.
Other areas where Israel/Tel Aviv shows strength, according to the Startup Genome list, are in diversified product types (Israeli tech companies work in fields as diverse as networking, green tech, software, and much more), striking out in new markets (Israeli tech has more or less invented a number of industries, like digital printing), founder experience (many tech entrepreneurs in Israel are on their second and third companies), tech-heavy founder team composition (many Israeli entrepreneurs get their initial tech experience in the IDF, where generous helpings of high-tech help the country’s defense), and so on.
On the other hand, Israel is lacking in a couple of the criteria, such as market size (how many customers can be expected to use the technology or product being developed). That, and the fact that Israeli start-ups may have a harder time raising money than companies in Silicon Valley and New York, guarantee that those two locations have nothing to worry about in the struggle for tech ecosystem supremacy. But watch out, London and Toronto — Tel Aviv just may end up outpacing you.