The Other Israeli Startups

In 1914, my grandfather, Henoch Tepper, was struggling. Having arrived from Latvia in 1901, he was thirty years old and married with three children. He scraped by working at a grocery store in St. Louis. A successful Jewish garment merchant spotted a lantzman and immediately recognized an opportunity to do a mitzvah…and make a buck.

“There’s a town in rural Tennessee that doesn’t have a clothing store,” the man told my grandfather. “If you go up there, I’ll front you the merchandise, and you can open a store. You’ll pay me when you can…” Thus did my grandfather pack his family onto a train and head a few hundred miles up the tracks to a depot where a wooden crate of dresses was waiting for him. He then opened the first of what became a chain of 16 “Jew stores” across the rural South.

In addition to explaining why my relatives spoke Yiddish with southern accents (“Y’all want to kibbitz on Shabbos?”), this story offers a great example of how Jews have long been in the business of startups. Startups, often involving this same kind of lending and promissory arrangements, are a staple of Gemara. You borrowed my ox to plow your field. Where is it? You lost it? Oy vei…

Flash forward to modern-day Israel, and we are the “startup nation,” the high-tech envy of the developed world. In every imaginable category, Israel punches way over its weight in terms of startup innovation and valuation. An entire class of Israelis has gotten rich through startups, or at least earned very nice incomes from this sector.

Except, not all Israelis are so blessed. A fascinating recent report from Standard & Poors reveals that Israel effectively has two economies: Israel’s high-tech private sector puts it among just 10 countries in the world to receive S&P’s highest rating for economic performance and external position. Israel’s legacy economy, with inefficient institutions and high debt, results in a low bond rating and an “Institutional Quality” rating comparable to Latvia and Lithuania.

You don’t have to be an S&P analyst to see this reality every day in Israel. Plenty of people are doing fine, if not striking it rich. Others are struggling, while others still, especially a lot of new olim, are trying to make things happen for themselves.

“When we think about startups, a lot of us default to things like term sheets, exits, and unicorns,” said Lesley Kaplan, the founder of the Israel Networking Hub and co-host of the Jerusalem Business Conference, which will take place on October 26. “While number crunching and KPIs are essential to running a successful business, there’s so much more to success—including branding, marketing, leveraging AI in business, achieving your mission and vision, and more.”

Even with strong Hebrew skills, an oleh starting a business may find consumer behavior different from their country of origin.

New olim who want to start new ventures can run into a host of challenges. Even with strong Hebrew skills, an oleh starting a business may find consumer behavior different from their country of origin. Wholesaler channels may not work the same way. The prices that customers will pay may differ, as well.

With organizations like the Israel Networking Hub, however, Israeli entrepreneurs can discover that they are not alone. “We support each other, and in the process, we strengthen ourselves,” Kaplan added.

“We support each other, and in the process, we strengthen ourselves…

At the Jerusalem Business Conference, for example, attendees will hear presentations about the importance of storytelling and influencers in branding and marketing, will be treated to a panel discussion on AI for business, and will hear from industry leaders about “Money Matters: How To Protect, Grow & Plan”.

“We are an ‘entrepreneur nation,’ with creativity and growth in every imaginable sphere,” Kaplan added.

There will be a lot of opportunities for networking, as well. “One of our main goals with the conference is to create an atmosphere where people can meet, exchange ideas, and start to build profitable relationships.”

Efforts such as these promise to bolster the strength of Israel’s other startup community—and with it, perhaps the non-tech sector of the economy. “Not every startup in Israel is high tech. We are really ‘entrepreneur nation,’ with creativity and growth in every imaginable sphere,” Kaplan added.

And, just as my grandfather launched his business through the advice and trust of a fellow Jew, participants in events like those organized by Kaplan may find that success comes from extending themselves to others.

Photo by Rebecca Kowalsky | https://imagesthroughtime.com | https://www.youtube.com/@rebeccakowalskyphoto