Israel Cultivates the Next Wave
Written by Jon Schwartz
AOL co-founder Steve Case recently laid out his vision of the internet’s next phase, calling it the “third wave”. As a brief recap, the first wave is defined as the laying of infrastructure for the internet itself, with companies like AOL leading the charge. The second wave is where we currently find ourselves: building functional and practical applications and software “on top” of the internet. Here we see rapid scaling of companies focused on new ways of connecting people with information and each other. Such companies were typically born directly in – or took shape elsewhere before relocating to – Silicon Valley. Similar hubs have emerged over time to capitalize on the entrepreneurial spirit, attract companies and create environments where technological developments can flourish, although, “the Valley” undoubtedly still holds top spot.
In the third wave, this will change. As technology percolates further into every remaining industry, there will be less of a focus on a company’s proximity to Sand Hill Rd and more of a focus on where the heart of its target industry and market lies. The third wave will encourage decentralization and reshape entire sectors that had previously avoided technology’s pervasiveness. One sector Mr. Case identifies as “ripe for disruption” will be agriculture, which, together with other ripened sectors like transportation, energy and health care, represents over half of the US economy. While food is certainly grown, produced and consumed in places like California, it is not the only place (or even the best place with the current drought) to build and scale an agri-tech focused start-up, regardless of the capital floating around. Third wave thinking suggests that, as home to the highest number of agronomists per capita in the world, St. Louis, Missouri, might prove a much more effective location for agri-tech start-ups looking to research, test and implement food related technologies. With this new structure expected to take shape, Mr. Case stresses the importance of international partnerships and relationships, which have both been key components behind the success of Israel’s entrepreneurs and high tech sectors – after all, the country is only big enough to be a beta test site which makes ‘going global’ inevitable to scale.
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Fortunately, despite Israel’s minimal amounts of arable land and having only recently overcome a longstanding drought, there is an agri-tech sector on the rise with companies building key partnerships and relationships to expand their business and establish presence in their target market. Kaiima (Hebrew for “sustainability”), an Israeli founded agri-tech company focused on improving crop yields by adding chromosomal cells to seeds and emulating the natural evolutionary mechanism of genomic multiplication allowing plants to grow bigger in harsher climates without sacrificing nutritional value or quality, recently established presence in St. Louis with the help of DFJ and Kleiner Perkins, both substantial venture capital firms headquartered in the Valley. Forrest Innovations is another Israeli agri-tech company that relocated in St. Louis as of June 2015 to continue developing technology that minimizes mosquito-transported diseases and overcome a bacterium threatening the citrus industry. Evogene set up an office in St. Louis back in February 2015 as the company continues to conduct R&D for improving crop quality, productivity and economics for the food, feed and biofuel industries.
Courtesy of generous donors, particularly JNF Toronto, a business mission for North American young professionals interested in the space was able to visit in Israel in late April 2015 and meet with companies like Kaiima. The main goal was to provide participants and companies a platform to connect, learn and build lasting international business relations in a space relevant to everyone. This is already happening as many of our participants continue in dialogue with those we met in order to gain insights into their own relevant ventures while others are now helping connect the companies with customers, contacts and capital in North America.
Our group was fortunate to sit down with companies providing software to improve the efficiency of plant breeding processes (Phenome Networks), precision agriculture technologies (Saturas), root-focused plant breeding and grafting technologies (Rootility) and companies with innovative natural products to enhance soil nutrient uptake (GroundWork Bio Ag). Other meetings were held with investors (GreenSoil Investments, Israel CleanTech Ventures), incubators (Trendlines AgTech), tech-community platforms (AlphaStrauss), entrepreneurs, start-up executives, government officials and academics. Echoing Start-Up Nation’s contention that the military is a major factor contributing to Israel’s success on the high tech front, our talks with investors and entrepreneurs building their portfolios revealed that many are leveraging and applying relevant military training to initiate and develop agri-tech ventures. miRobot, a Trendlines AgTech company, relies on missile tracking technology to build a robotic milking system to carry out more consistent, efficient pre- and post-milking routines. Taranis is led by a versatile team of naval officers, data scientists and software engineers utilizing their weather modeling and prediction skills to help farmers understand and manage their farm by providing timely and accurate data to respond to weather conditions and mitigate crop disease threats. While only some of those we met are implementing military technology, all are looking to their business beyond Israel’s borders and provide real and practical solutions to an industry (and global population) in need.
Clearly global food quality and security are immediate and ongoing challenges to our very survival; and will only be exacerbated by an expected world population of 9 billion by 2050. With this in mind, to successfully ride Case’s third wave, we would do well to follow Israel’s lead by leveraging technologies and building international partnerships that encourage companies to position themselves in their industry’s and target market’s heartland – laying the foundation for relevant and decentralized hubs to grow in their relevant locations.
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IBD Consulting provides complete business development services for leading-edge companies wishing to enter new and emerging markets. From initial consultation and market appraisals, to establishing your solution in your target market, we can assist your company in achieving its international business development goals. At IBD Consulting we choose to work with companies using innovative technologies in the medical, agri and hi-tech sectors, with a focus on companies coming from and seeking entry into the Israeli, Australian and New Zealand markets.
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