Israel to Innovate and China to Consume?

Israel and China, how do you see these two startup ecosystems could work together? This is the question I was often asked when I was in Tel Aviv.

What Israel has and China don’t

Innovation, that is the most important keyword to describe Israeli startup ecosystem. Most of the startups in Israel, no matter it is the big one like SkyTram, or the relatively small one like Slide.ly, they all have the similar spirit: find a new solution using latest technology to solve existing issues in people’s life. Copying is not a part of Israeli culture, and Failure is just another word of Success. As we said before, a small country with no resources and surrounded by sea and enemies, the only way to catch up with the world is to embrace the technology and maximise its value. On the other hand, Israel has invented a bunch of cool technology and products but as a matter of fact it is a country with only ~8m population, i.e. a small market. Israeli startups have to go out. There is no big enough of user base to sell, but Intellectual Property (IP) means a lot because it could bring fortune for Israeli companies.

Looking at China, as a big country it owns far more rich resources than Israel and it has 1.4b population too. The pity is, at least in the web/mobile industry, China is lacking of innovation. So the market is dominated by copycats which results in a very tough competition for local startups. So the entire industry become really market-driven or be more clear, money-driven, instead of tech-driven. In other words, people in the industry is looking at monetisation and innovation is just something good to have.

Israel and China, What in Common

For different reasons, Israel and China’s web industry all look up at one place, Unite States. Israel needs the market and louder voice; China needs more proven models to learn and a more healthy market where users are more loyal and happy to pay for good service. Fair enough. But don’t forget that Israel and China do have something else in common, both are Developing countries which means both countries may face similar issues, traffic, water shortage, urbanisation etc. So can Chinese startups learn the technology from Israel, and Israel take the advantage of Chinese market?

Israel to Innovate, China to Consume?

So, Israel to Innovate and China to Consume seems the way to go? USA and China, 15h time difference; Israel and China, 5h only. Both Chinese and Israeli startup ecosystem should understand that two markets geographically are not that far at all. There must be some difficulties, such as language barrier, copyright issue, user behaviours, but these are also known issues which every foreign company might face when enters a local market.

Enter the local market carefully, and Tune and market your product for the local market smartly.

[photo taken in Google Campus, Tel Aviv]