How come you moved from Israel to Cluj? is one of the first questions I usually hear when meeting new people in Romania. "Well, I wanted to build a startup."
Few people take this answer seriously, in light of Israel"s image as a startup heaven. According to the Startup Genome report, the top startup ecosystems in the world are: Silicon Valley, Tel Aviv, LA, Seattle, NYC, Boston and London, in that order. The official statistics support this image, citing close to 5,000 Israeli startups attracting $2 billion a year in funding mostly from international investors.
Some high profile exits make headlines and inspire more waves of entrepreneurs and investors to take a plunge into the risky, yet potentially profitable, startup waters. A few recent examples include: Waze, a navigation app acquired by Google for $1B last year; NDS, a paid TV software company which Cisco paid $5B for in 2012; PrimeSense, the 3D sensor pioneer bought by Apple in the autumn for $360M; Onavo, a mobile analytics startup purchased by Facebook for $150M; Trusteer, a web security startup whose founders and investors received around $900M from IBM last summer.
In some cases, big exits mean relocating the local team to the US, but many of these American buyers convert the Israeli startups into their R&D centers, exposing them to larger markets and further developing the local hi-tech environment. Even when startups fail, which happens more often than not, highly-demanded professionals and well connected entrepreneurs find themselves joining or starting new enterprises, leveraging their experience and contacts, having higher chances of success on their subsequent ventures.
Being a small country, covering an area of less than 10% of Romania, Israelis are very connected to each other. It rarely takes more than an hour to get to a meeting anywhere in the country. The local culture is characterized by having low power distance, where individuals tend to challenge authority and organizations are more horizontal, having relatively small power differences between management and employees. This makes it easier to reach virtually anyone, from a government minister or a chairman of a big corporation. It also makes it quicker to find partners and investors.
Successful entrepreneurs are more than happy to share their stories and inspire others to follow suit. Many become investors and put the money they made back into the startup economy. Some become mentors to promising beginners, guiding them through turbulent waters, and allowing them access to their own rolodex of business contacts and venture capital.
It takes a certain kind of nerve, known as "Chutzpah" and pronounced huuts-pah, to take a mere idea and build it into a global business. It also requires inspiration, experienced mentorship and a supporting environment. For this reason I am helping organize the first "Startup Pirates" in Cluj this February. This week-long intensive experience is designed for talented people with dreams, who are willing to take a chance to make them come true.