If the first thing that comes to mind when you talk about startups is young Tel Avivians, those who live and breathe technology even before they enlisted and who dreamed of an exit during a trip to the East, prepare to receive a slightly different version.
Itzik Crombie and Racheli Ganot, two entrepreneurs High-tech The Haredi sector in Bnei Brak launched yesterday (Tuesday) the 'Haredi High-Tech Forum Incubator' for Haredi startups.
""I already have a startup, and Rachel has a chip development company," says Crombie. "A few years ago, we founded the Haredi High-Tech Forum together, with the understanding that what will lead to growth today, market integration, and the establishment of companies that will employ Haredi people, is simply to help them establish Startups. "In the last two years, we have opened courses and a mentoring program, with the assistance of the Chief Scientist. We have lobbied, passed regulations and support tracks for startups, and now we have established an incubator that will help startups on the way.".
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The High-Tech Forum incubator is supported by the venture capital fund JVP. "When I started a few years ago, I met Erel Margalit and talked to him about my ideas, and he was enthusiastic," Crombie recalls. "To this day, the fund's management encourages and pushes us forward.".
The incubator model is made up of several stages: the seed stage, in which participants will have weekly meetings over the course of two to three years. The second, more advanced stage will last 4 months, in which each company will receive 200-250 thousand shekels and will formulate the business model.
The main phase - the incubator itself - will last a year and a half to two years, during which each company will receive an investment of 2-3 million shekels and develop the product. The money will come from various sources, including the Chief Scientist and private investors, who will become a fund in the near term.
• Is there enough potential for startups in the Haredi sector?
Crombie: "Yes, and there is a huge need for assistance. When we founded our companies, there was no such thing. It's not easy for an ultra-Orthodox person to take the step. He can't go to an 'Entrepreneur on the Bar' type event. He doesn't have the supportive environment. That's why we decided to build the necessary ecosystem.".
Ganot: "The existing programs are important as training for employment, but they don't make a startup successful. During Entrepreneurship Week, for example, we had activity, but we realized that we needed to accompany them in front of investors and the Chief Scientist.".
• How aware are people in the ultra-Orthodox world of technology?
Crombie: "In 2006, there were 400 Haredi students studying technology subjects, this year there were already 8,000 studying in Haredi tracks. True, this public is less technological, but there are also those who are.".
Ganot: "It actually suits the Haredi world. After all, you can stay in Bnei Brak and sell to the whole world. In my company, for example, many Haredi women from Bnei Brak work. We do projects with companies like SanDisk and Intel, and all without leaving Bnei Brak. In this job, the hours are particularly flexible, and you can always make up hours in the evening.".
• And what about the ideas for startups? After all, this is not a population that experiences this on a daily basis.
Crombie believes that the fact that this is such a different world is actually a huge advantage. "All the big companies, especially Google, have 'diversity' (organizational heterogeneity. s.d.). When there are five white American men on a team, their creativity will be lower than on a team that also includes Chinese or any other culture.".
""The combination is beneficial to companies. It's people who come with a different set of rules who see things differently than someone who graduated from the army and university. This is a generalization, but the difference is important. Beyond that, these are not disconnected people. The ultra-Orthodox who found a startup have already studied at technology companies. They need a background.".
There are halachic solutions
Crombie himself went through the entire Haredi path "according to the standard": he studied in yeshivahs and was even ordained as a rabbi. Only later did he begin working in high-tech, studying at the Technion, working in the field until he founded an information systems company. He also knows how to deal with halachic questions.
""There are halachic questions along the way. For example, how to provide support or sell abroad on Shabbat? But solutions are found. There are also problems such as dealing with investment models that include interest. According to halachic law, it is forbidden to pay interest. Here, banks have solutions such as transaction permits.
""As a religious entrepreneur, it's not a barrier, you just have to know how to approach it differently. But in terms of the work itself, there's no difference. Everyone wants a profitable company, and everyone deals with their own limits. After all, even in the secular world there will be those who say: 'I won't deal with a gambling app.'".
• Are the startups specifically tailored to the ultra-Orthodox sector?
""If someone comes along and opens an app for keeping Shabbat, chances are it won't have a profitable business model, because the market is small. Someone once came up with an idea for an app that would help keep six hours between meat and milk. How many people are already interested in the idea? There has to be an economic business model.".
• So why do we actually need a dedicated incubator for the sector?
""Because the Haredim have cultural limitations that block their way into integrating into other incubators. That too will come, but for now it will open a door. We are making sure that it will be in Bnei Brak, we are making sure that it is modest, and yes, there are women who want to teach.".
• And women startups?
Ganot: "There are applications from women, currently fewer than men, but there are more female programmers, for example, than male programmers. I think that I, with my presence, can inspire this and be a role model.".
• Do you already have examples of successful startups?
Ganot: "We have accompanied companies that have already raised over 7 million shekels. In total, we have accompanied about 30 companies, some of which are already in advanced stages.".
Crombie: "We supported a company that developed an app for planning restaurant reservations. Another company we support operates in the field of managing shared residential complexes. There is also an idea that I don't understand how an ultra-Orthodox entrepreneur came up with: controlling and managing television advertisements, so that you receive a notification when the advertisement ends.
""Another interesting example is a company that developed a system for managing garbage trucks in municipalities. There is a chip on each bin, the truck reads the bin, and that's how the municipality knows when it was collected. It's currently in pilot. Modi'in Illit, the city where the entrepreneur came from, was the first city to try it. This is a guy with a beard down to his knees.".
The ultra-Orthodox accelerator Kama-Tech
The Haredi High-Tech Forum Incubator is not alone.
Moshe Friedman, CEO of the Kama-Tech venture, and his partner Avraami Weingut are also launching a startup accelerator today that targets the sector. "I am Haredi from generations," explains Friedman (36). "When people talk to me, they don't understand how I became an entrepreneur - I didn't study core studies, until I was 30 I only studied in the Haredi track. What I know about high-tech, I learned on my own.".
• Doesn't high-tech contradict Halacha?
Friedman had already founded a startup, and a few years ago he met Yossi Vardi at a conference. "I told him that there are ultra-Orthodox entrepreneurs who have difficulty integrating because they don't have connections. They look different, and to be a successful entrepreneur you have to be part of the ecosystem. This touched Vardi's heart.
""He told me that there is anger that the Haredim are not integrating, and here, he sees that there is a willingness to encounter closed doors. He connected me to the Av-Zuk connection at Cisco, where we replicated an existing model for integrating Arabs.".
Two years ago, Friedman, Weingut and Av-Zuk, with the assistance of Dr. Yossi Vardi, founded Kama-Tech, a non-profit organization for integrating Haredim into high-tech.
The organization includes 35 giant companies from the high-tech world. "We succeeded with hundreds of employees," Friedman boasts. But it wasn't enough. He says that over the past two years, more and more entrepreneurs without connections have approached him, which has made it clear to him that a startup accelerator is needed. "The person involved and who gave us a significant boost is Prof. Amnon Shashua, chairman of Mobiley, along with the Kameh Foundation, which includes ultra-Orthodox philanthropists from England and the US.".
The accelerator was also joined by well-known entrepreneurs and venture capitalists, including Hemi Peres, founder of Pitango; Avishai Avrahami, CEO of WIX; Yizhar Shai, managing partner of the venture capital fund Cainan Partners; Dov Moran; Gigi Levy; Dr. Shlomo Kalisch; Alan Peled; Jeremy Barbie; Liron Warman; Irit Israeli Kahane and others.
• Do you have any startups in the pipeline?
""For almost a year now, we've been supporting several ventures that won a Haredi startup competition we held with Microsoft. Now it's more formal. There are 8 male and two female entrepreneurs. The largest venture among them raised a million dollars. The startup is called Bontact, and the idea is that website owners will be able to contact surfers in real time and improve the service. There are other companies that do similar things, but Bontact is probably good, because it works with large companies in Israel.".
• Do the startups' solutions appeal to an ultra-Orthodox audience?
""On the contrary. We definitely want them to appeal not only to the ultra-Orthodox audience, but to the international audience. We aim for them to become companies worth a hundred million dollars or more.".
""Our dream is to create more employment for the ultra-Orthodox. The option of an exit is on the table, but the ambition is to increase employment in high-tech. It is a fact that some have already raised money. All the people who accompanied us saw that there are good entrepreneurs and the ability to launch good startups.
""We realized that we needed to establish a formal accelerator: there are mentors, lawyers, accountants, and everyone works voluntarily. An entrepreneur who comes receives 20,000 shekels, and we only demand one thing from him - that he help the one who comes after him.".
Friedman believes that the integration, at least in the accelerator phase, cannot take place in physical isolation from the secular high-tech world. "We had the option of taking a workspace in Bnei Brak, but we were afraid that it would increase the disconnection from the world. So we turned to large, successful startups and asked that each one adopt an ultra-Orthodox startup, to work there. This is happening, for example, at WIX.".
• Is the kitchen there kosher?
""The question is appropriate, but this is exactly our mission. The Haredi guys are disconnected from the scene, so it's important that they see what a high-tech company is, and Avishai Avrahami, the CEO, will answer their questions. We want to build a bridge. After 4 months, they will return to Bnei Brak and Jerusalem.".
