Thanks to an innovative business accelerator, Tampa has become the destination of choice for Israeli startups.
Israel is known as the startup nation, and for good reason. Despite having a population of fewer than 9 million people, the country boasts more than 3,500 startups. Its level of venture capital investment is second only to the United States.
More proof: The Israeli tech sector employs some 25% of the nation's entire workforce, and according to Rachel Marks Feinman, executive director of the Tampa-based Florida-Israel Business Accelerator, Israel is the worldwide leader in patents per capita.
The startup sector in the Tampa Bay area has also grown significantly in recent years. Those growth factors, taken together, led to the creation of FIBA, which identifies Israeli companies that have the potential to make an impact in the United States. Then it brings those companies' leaders to Tampa for a comprehensive, sometimes months-long program designed to help attract investors and bring products to market.
“People in the know, they know that Israel has amazing innovation across all industries,” Feinman says. “We want to help differentiate our economy and our community by bringing these companies here as opposed to losing them to California or New York or Massachusetts or some of the other places they might be more familiar with.”
FIBA itself could also be considered a startup. It launched in December 2016 and a few months later had welcomed its first cohort of Israeli startups. One FIBA startup, StemRad, has already opened an office in Tampa, hired a full-time employee and crafted a plan to begin manufacturing products here.
“We are obviously helping accelerate the growth of Israeli companies in the U.S. market,” says Feinman, a former Hill Ward Henderson lawyer who joined FIBA in October. “But we want to make sure that we do it in a way that has a direct and indirect economic impact on Florida.”
Local economic impact is important, Feinman, 38, adds, because FIBA is funded by a $400,000 state grant. As part of the agreement with the Israeli startups it assists, the organization receives a percentage of those companies' revenue instead of charging a flat, up-front fee for participating in its programs. FIBA, headquartered at the Bryan Glazer Family Jewish Community Center in South Tampa, also receives support in the form of donations from corporations and individuals.
Feinman's colleague Rakefet Bachur, FIBA's executive director of marketing, points out that FIBA itself does not invest in the companies it accepts into its programs, which include services such as sales coaching and market analysis workshops hosted by local experts. “We've identified sales, and how to navigate the sales process in the United States as one of the weakest links for Israeli companies,” says Bachur.
FIBA's signature program, FIBA Launch, also includes extensive cultural orientation and networking assistance designed to help Israeli entrepreneurs and startups figure out how to do business in the United States.
“Israelis are technologists,” explains Bachur, 42, who was born and raised in Israel. “They have amazing technology, but they don't necessarily understand the nuances of how to work in a business environment, what to do, what not to do. And everything in the U.S. is much more formal than it is in Israel, which is a much more informal culture and environment.
“There's a joke that Israelis develop all kinds of technology and then they look for what problem these technologies actually solve.”
Two companies that have come up, so far, through FIBA include StemRad and eProc Solutions.
Tel Aviv-based StemRad is a company that defies Bachur's humorous categorization on build it, then find a problem to solve. Founded in 2011 by Oren Milstein, an expert in molecular biology, the company makes a wearable “shield” that protects the human body, down to the cellular level, from harmful radiation. It also allows them to move freely.
StemRad markets the product, called StemRad 360 Gamma, to militaries, law enforcement agencies, first responders, nuclear power companies and others with personnel thrusted into situations where they might be exposed to the invisible but deadly rays of energy. StemRad's work caught the attention of Lockheed Martin Space Systems, which has entered into a contract with StemRad to produce protective gear for NASA's Orion moon mission scheduled for next year.
Milstein moved his entire family to Tampa for three months last year while he took part in the FIBA Launch program. During that time, he got to pitch his company and product to potential investors at FIBA's Innovation Fusion event, where attendees included Tampa Bay Lightning owner and real estate developer Jeff Vinik. Milstein arranged follow-up talks with Vinik, who was impressed by the product and leadership. The business mogul agreed to invest about $6 million in StemRad late last year and has joined the company's board of directors.
“I felt like FIBA was a good match with my company because at that point in time, we were really looking to expand into the U.S.,” Milstein says. “I was impressed with their story and goals.”
FIBA officials, sensing StemRad's potential for success, urged Milstein to apply for the organization's initial cohort of startups. “FIBA also has to survive,” says Milstein, “so they bring in highly promising companies and take a small commission from our sales.”
That commission could be getting larger if StemRad's latest innovation proves a hit. Milstein says the company is developing new protective wear for physicians working in hospital CAT scan labs.
“Currently, they are wearing bulky aprons,” he explains. “We want to make something a lot more benign and lightweight for them. And we have the technology to do it. It's something we've been working to do for a while but we never came to do it [prior to working with FIBA] for multiple reasons.”
Milstein hopes to begin manufacturing the new product in Tampa this summer. StemRad has already established a local office and hired its first full-time employee to run it.
eProc Solutions, run by Oren Rosen, was also selected to take part in the FIBA Launch program.
Software designed to make a company's IT help desk work smoother and be more efficient is eProc's primary product.
Instead of an employee sitting idle while a help desk staffer remotely takes over the computer to figure out what's wrong with it, that kind of work is done behind the scenes with eProc Solutions. “It allows a company's help desk to close tickets and detect and solve problems very fast,” says Rosen.
“What if I could detect and solve problems without interrupting the end user, without the need for remote control?” he asks. “I can save you a lot of time, and I enhance the effectiveness of the help desk and the overall organization.”
Rosen's collaboration with FIBA helped him find a U.S. reseller for eProc's services. Rosen also says he's struck deals with clients in the retail and finance industries in the U.S. that will require thousands of eProc software licenses. “It's working out very well, but it will take time” to meet demand, he says.
Rosen first attempted to penetrate the U.S. market in 2016, when he traveled to New York to pitch eProc Solutions to some connections he'd developed on his own. “All those connections did was provide me with more connections,” he recalls. “But nothing materialized out of that, partly because I didn't know how to do business in the United States.”
That's where FIBA's cultural education worked wonders for Rosen. He says the organization helped him understand the formalities and idiosyncrasies of how Americans do business — such as our fondness for email follow-ups.
“Oh, Americans love the follow-ups,” Rosen says with a laugh. “In Israel, if I set a meeting with someone, let's say, three weeks from now, they will send the invite, I will accept it, and the next time we will be in contact will be in three weeks, during the meeting.
“In the U.S., if I send you an invite for a meeting in three weeks, after I send the invite, I need to send a follow-up to remind everyone that, yes, in three weeks we are all going to be sitting and talking together. And then tomorrow, I will need to send another one just to make sure, and then another one two weeks before the meeting, and then maybe again three days before, even two hours before.
“I don't understand it, but I do it because this is what is expected of me in the United States. Why? I don't know. It's a waste of time. If there's a problem with the meeting time, I'll cancel.”
CLASS OF 2018
FIBA recently announced four new companies that have been accepted into its business accelerator program in Tampa. The companies include:
• BetterCare, which has developed a real-time communication and care management platform for caregivers, nurses and professional staff with the goal of improving care at skilled nursing facilities;
• ECOncrete, with science-based construction solutions that help decrease the ecological footprint of concrete structures such as ports, breakwaters and piers, while improving structural performance;
• Nucleon, which created a set of autonomous internet tools designed to more effectively identify, analyze and fight cyber threats; and
• UC-Care, which develops, manufactures and sells two products aimed to improve detection and treatment of prostate cancer.
Key representatives from the companies will spend the next several weeks in Tampa.