Most people believe that the strongest entrepreneurial network in world is either Stanford, Harvard, Y Combinator or something alike. These are indeed incredible networks which created some of the world’s largest tech companies. They receive a vast amount of media coverage, attract some of the world’s top talent who wants to be associated with these brands, and enjoy a huge amount of funding and support.
But there is another extremely strong entrepreneurial network that while very successful doesn’t get the attention it deserves. This is the network of ex-Israelis who live in the US. These are people who were born and raised in Israel, often served in the IDF (in many cases in top military units), studied in Israeli universities, and at some point in their lives decided to move to the US to study or work there. Perhaps unsurprisingly, many of these ex-Israelis who were born and raised in “startup nation” naturally gravitate towards the startup ecosystem and very often launch startups in the US. What is perhaps more surprising is how successful many of these startups have become: This list includes many high profile startups such as Coursera, Zenpayroll (Gusto), American Well, and Quxiey. Furthermore, it turns out that a good amount of the US-based ‘unicorns’ were founded by ex-Israelis who live in the US. To be clear, these are not companies that were launched in Israel and later moved to the US like Outbrain and Taboola, but companies that were founded by ex-Israelis who live the US. Below are a few examples:
These ex-Israelis don’t receive the mentorship that Y Combinator entrepreneurs receive, they don’t have the ‘pedigree’ that comes from attending Harvard or Stanford, and are not chased by the massive amount of funding that goes into some of these other famous networks. Yet, they still tend to be very successful. Why is that?
As someone who grew up in Israel and later spent six years working and studying in the US, I believe there is some kind of ‘magic’ in this formula. Growing up in Israel – a country whose biggest export is innovation, where everyone thinks they can outsmart the system instead of following the ‘traditional’ path, where ‘chutzpah’ is not a bad word, and where the macro environment forces you to be paranoid yet optimistic – turns out to be a great foundation for successful entrepreneurs. However, there is also a big downside to being so tightly associated with Israeli traits. Specifically, many Israelis tend to be “too rough on the outside”: We often find it difficult to (really) listen to others, our communication style is too direct and not articulate enough, we lack careful attention to details which is required to build large operations, etc. Spending enough time outside of Israel helps ‘polish’ these rough edges yet keep the strong foundation, which makes many ex-Israelis incredible entrepreneurs.
Similar to the way Sequoia Capital capitalized on Y Combinator, there are several investors that made a fortune by being connected to the ex-Israelis network. This includes angel investors like Oren Zeev, Venture Capital firms such as CRV and USVP and also Bessemer Venture Partners. But it’s not just investors that benefit from this network. Many Israeli startups leverage the ex-Israelis who live in the US as the first bridge into the US market. They use this network for initial US hiring, to find potential partners, and sometimes even as the first few customers. But more importantly, ex-Israelis often return to Israel. And when they come back they bring tremendous value and incredible expertise to the local startup ecosystem which helps grow the next batch of Israeli startups.