Imagining a Successful DevTech Industry - by Gaddy Weissman

Creating a new industry is never an easy proposition. Part of the work is building a tangible vision that people can ascribe to. I was thinking about this in a recent conversation with a founder of a great Israeli start-up who compared his work with that of friends in high-tech.  When Israeli high-tech start-ups need strategic partners, Silicon Valley is next door.  Google, Apple, Microsoft, HP, eBay, IBM and many more are just up the street in Herzliya, Tel-Aviv, Petach Tikva, and if you need to go really far, Raanana. 

DevTech entrepreneurs don't have it so easy. The Gates Foundation has given out prizes here, like this one for malaria diagnosis, but there is no R&D center like Microsoft's in Herliya. The large development aid consulting firms don't have back-offices in the holy land. Corporate titans and minnows are only slowly discovering the start-up nation.

He's right, but things are beginning to change. TATA invested in TAU's Ramot TTO. The IFC just invested in Kaiima. At WATEC, a number of integrators focused specifically on addressing the challenges faced by developing countries were in attendance. From Global Health to Food Security, the biggest NGOs and MNCs are dipping their toes in Israel.      

In 10 years, when we've succeeded, there will be hundreds of start-ups focused on DevTech, and the biggest names in International Development will have innovation labs, venture operations, and technology scouts in Israel. 

Getting my Tech into the Field - by Gaddy Weismann

You've got a great solution and want to install it in East Africa. Where to turn? You have two options: public sector and private sector.

The public sector:

·      "The World Bank" – Over $100B is distributed by bi-and multilateral aid agencies every year. Some examples of such agencies with which Israelis companies can work are the World Bank and the Inter American Development Bank.  Every Western country has a bilateral agency as well. These agencies are tough to crack, and for a small company, it is very difficult to get in the door.

·      Government contracts - You could skip the Western agencies entirely and go directly to an East African government for a contract.  This requires significant time on the ground and a very deep understanding of the political and bureaucratic challenges.  It's good to have a "matcher" on your team.

The private sector:

·         Aid consultancies - These large companies win the lion's share of aid contracts from multilateral and bilateral aid agencies.  Instead of winning a contract directly, you become one of their sub-contractors.  If you are a consultant, this is a great way to go. Try a website like DEVEX to get started. However, if you have a product, they may not be the best path to take.

·      Multinational corporations (MNCs) - As these markets grow, companies like GE, TATA and IBM are entering with force.  Just as Israeli high-tech firms sell to and are sometimes acquired by MNCs, the same is beginning to happen for the developing market, focused products as well.  

·      A local partner - Set up a JV with a local partner. You'll want to find someone you can trust.  Two things to look for are existing contracts with Western companies or investment from Impact Investors.

I am happy to have helped a number of Israeli firms expand through private sector methods by finding the right MNC, the right local partners or the right impact investor.

Israeli Business and the International Development Industry: DevTech - by Gaddy Weissman

Thanks for joining and I'm very happy to be a regular writer on the IsraelDev blog.  

This column is dedicated to getting Israeli business into the international development industry.  I'm going to address the sector from a business perspective, always trying to highlight the way for Israeli companies to get involved.

This is a growing sector, and Israeli companies, investors and entrepreneurs have every reason to profit from it.