With early tech successes in the ’90s, Israel earned itself the title of the “startup nation”. A best-selling book by the same name makes the claim that the mandatory army service most Israelis are required to do, coupled with loose social hierarchies and an almost non-existent respect for authority has helped to create an entrepreneurial culture in Israel.
Moreover, in the early dot-com era of the ’90s, the Israeli government started creating so-called technological “incubators” to harness the influx of well-educated immigrants from the former USSR. With roughly a $1 billion a year in direct and indirect funding from Israel’s chief science office, these hubs still spur technological development across Israel, with a new one recently being opened in Be’er Sheva in the south.
Israel reportedly has more high-tech start-ups per capita than any other country in the world, despite its size. The same is true for its massive venture capital industry, with over 70 active funds making billions in “exit” payouts a year. With such a small population and constant instability, the unprecedented success of the Israeli high-tech sector has caught the attention of many big players who want in on the local goods.
The main type of hub in Tel Aviv is those run by venture funds. The Microsoft Accelerator, run by the software giant’s risk-taking financial arm, is a prominent example. The modern incubator offers a “strategic partnership” for startups that are already up and running. More than just a great office space, the accelerator is a program that aims to teach budding companies to think big and work like big corporations. Offering help with everything from marketing, financing and tech management, this venture-fund based hub is exclusive, but is part of a growing new model for indirect financial support by big funds. If you’re one of its select few accepted into their ranks, these types of hubs could be the key to boost you beyond the local environment.
Other hubs like SOSA offer an “ecosystem” for select startups as a form of investment, offering what they call a curated “creative community” geared at innovation to a handful of select startups. Founded by pioneers of the Israeli hub and tech scene, it aims to create a “village square” for innovation-based business, in a hip and up-and-coming part of Tel Aviv that is reminiscent of Brooklyn.
Savvy companies like WeWork and MindSpace have turned the hub on its head, gutting its exclusivity and placing the space itself at the heart of their business model. Turning shared workspaces for the startup-minded into an art, and tapping into the market of small companies who are on the cusp of needing an office, these two rivals have reshaped how people work in Tel Aviv.
Pitching a “community” for entrepreneurs, freelancers, startups and small businesses, they offer a wide array of shared spaces with all manner of subscriptions, from a daily space at a shared desk to a year-long personal office. They’ve also become something of a status symbol with their swanky digs, amazing buildings and key locations throughout the city they have inspired numerous spin offs.
Local establishments like the Diaghilev Hotel now also offer a shared workspace in central Tel Aviv and many young trendy apps have left the coffee shops for this beautiful open space.
Tel Aviv’s town hall also offers its own hub, and you can always find a desk at its Mazeh 9 young adult and youth centre. The space is free and offers basic services, but it is a great place to work if you’re just getting started and are reluctant to spend on an office, and the cafe bills are killing you.
There’s another semi-free hub in the municipal library in the Shalom Meir building, and both offer an organic networking experience for young entrepreneurs in a nice and simple work setting.
Another popular trend in the business world in recent years has been “for benefit” or “social impact” business. The so-called fourth sector takes a for-profit approach to non-profit issues, and Israel tech and hub scenes have developed new ways to use technology to enrich the world, not just shareholders. A prominent example is the A3i accelerator. This incubator is dedicated solely to ventures that aim to use tech to improve the quality of life for people with disabilities. Through intense training and mentorship programs, these types of hubs offer a social-minded gateway into Israel’s entrepreneurial ecosystem.
Foreign governments have also started setting up their own hubs in the city. One of the most successful of these is led by the British Embassy, and is aimed at spurring bilateral cooperations between the two nation’s tech scenes. The “UK Israel Tech Hub at the British Embassy in Tel Aviv” was established in 2011 and operates from the embassy’s premises. This hub has already helped create scores of projects, valued at over 60 million British pounds.
The hub model that has flourished in Tel Aviv is so successful that many are now calling to export it, with India demanding the local British embassy start a pilot there as well. Mayors in Asia and the U.S. alike have come to Tel Aviv to see how the tech scene fosters local business and helps spur urban development. Israel and Tel Aviv, it seems, have outdone themselves; after first spearheading startups, they’re now spreading the word on startup culture, and people are taking notice.