As The Israeli Startup Ecosystem Booms, The Next Major Challenge Is A Talent Shortage

Besttechie · November 21, 2015

This past week I had the opportunity to go to Israel (my first time!) and be immersed into the incredible startup ecosystem. I plan to write a handful of articles detailing my experiences there, but first, lets set the stage.

Tel Aviv Startup Stats

I spent a majority of my time in Israel in and around Tel Aviv which is the major startup hub of the country. Israel is currently home to more than 3,300 startup companies, 970 (or 29%) of which are based in Tel Aviv. The two biggest categories of startups in Israel are Internet companies and communications companies accounting for approximately 40% and 25% of all startups, respectively. The rest of the startups fall into the categories of IT & Enterprise Software and Life Sciences.

Tel Aviv is home to 418,000 people with 1 in every 3 residents being between the ages of 18 and 35 and if you do a little math that means there is 1 startup for every 431 residents. As I’m sure you can imagine this means the fight for top talent is a real challenge, especially since many people go out and start their own companies at some point in their life. According to the 2015 Compass Global Startup Ecosystem Rankings Tel Aviv is the number one startup ecosystem outside the U.S. and is number three in terms of global talent.

Enhancing the Startup Ecosystem

Those are clearly some impressive stats. But what is perhaps even more impressive is that this startup boom happened pretty much all organically. I spoke with Mira Marcus, the International Press Director at the Mayor’s office in Tel Aviv who told me the government is always looking for new ways to help enhance the startup ecosystem in Tel Aviv.

The Library co-working space in Tel Aviv.

For example, I was taken to a co-working space called The Library, which is aptly named since it is located in, well, a library. Part of the library has been dedicated specifically to the co-working space where very early stage startups are selected and provided a desk in the space. Of course, there are some guidelines in place to be eligible such as you need to have a team of two people (this is to encourage collaboration with other teams as well) and be willing to do work on this company/idea full-time.

But really that’s just one example of many. There are at least 50 accelerators, co-working spaces, and innovation centers in Tel Aviv alone — The Library just being one.

Aside from providing space for budding entreprenuers and arranging meetups, etc. The Israeli government recently approved a new program called the Innovation Residency Program. This program will allow entreprenuers from other countries to spend up to three (3) months living and working in the Tel Aviv startup ecosystem while building their company. In addition to access to a co-working space and living accomodations, the program also offers tailored advice and mentorship from local successful entreprenuers as well as access to network with investors, VCs, and industry experts.

Obviously this is great for any entrepreneur, but it’s also great for Israeli startups. Why? Well, remember that talent shortage I mentioned earlier? This could certainly help increase the talent pool. In a place where many people are motivated to go out on their own, it certainly will have an impact on the available talent eventually, which is exactly what is happening right now in Israel.

Ecosystem Aside, What Else Does Tel Aviv Offer?

So aside from this killer startup ecosystem why would you want to live and work in Tel Aviv for three months? According to several of the people I spoke and met with, Israel, on average, has 318 days of sun per year leaving just under 50 days of rain. That’s pretty awesome and it’s a stat Israeli’s really love throwing out there. Unfortunately for me though, two of the days I was there it rained. What luck! Aside from the eternal sunshine, Tel Aviv is right on the beach.

By the way, I checked, New York has on average 107 sunny days per year and San Francisco has 160. But what about the Sunshine State? Florida has 246 sunny days per year, but clearly isn’t a center of innovation and startups.

But perhaps my favorite thing about Tel Aviv is that everyone kept referring to it as a “Nonstop city,” which as a native New Yorker myself, made me feel right at home. I have to say Tel Aviv definitely had some NYC vibes for me. People were always out and about, tons of outdoor cafe’s, and more good restaurants than you can count.

Now that I’ve set the stage for my trip with some background on the Israeli startup scene be on the look out for more articles that will cover specific companies I met with and events I attended while I was there.

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