In the middle of May, we had a company trip to Eilat. We had fun, quality company bonding time, as well as enriching educational experiences. Each day we attended lectures and presentations at Eilat Hub, and before heading back up to the center of Israel, we met with the hub’s CEO, Or Haviv. Eilat Hub is pretty new, having been established at the beginning of this year. Upon their arrival in Eilat, they made it clear just how much a startup community center was a missing necessity. In this short time, over 100 entrepreneurs joined, working on 30+ different ventures.
What led to the opening of the hub?
“A few years ago, and even a few months ago, a high tech scene in Eilat was just a dream. Today, it is the reality. There is an ecosystem in its first stages and still in the making. Lessons in programming, entrepreneurship, and even panels and meetups.” These are the words of Or Haviv, who decided to fulfill his dream and joined Eilat Hub’s founder Ariel Ben Tov and the Eilat Economic Corporation, who all shared the same mission, “to bring the high tech world to Eilat and sit in a hub that helps startups and companies fulfill their own dreams.”
Or grew up in Eilat. Just after the completion of his military service, he went to California to study e-Business Management. This degree was created because of the dot com bubble that burst at the beginning of the millennium. The idea behind it is to create a new generation of business leaders who will understand the internet and the digital industry. “From 2001 to 2010, I lived in Silicon Valley and grew up in the industry and the ecosystem, getting to see the major companies that we know today growing and blossoming. I’ve seen the accelerators, incubators, angel investor community growing. Based on this, I got a hands-on education in entrepreneurship.” Or is married with three kids and decided to go back to Eilat to raise his family and to contribute to Israel, but his stay in Silicon Valley was what supplied him with his vision of building an ecosystem in Eilat.
The idea of creating a high tech community in Eilat was through a collaboration of Eilat’s mayor, Mayor Yitzhak HaLevi, and senior official Eli Lancry, together with the Eilat Economic Corporation, and the private entrepreneur Ariel Ben Tov and Champion Capital Company based in New York. Together they met Or Haviv and established the hub.
“We realized that if we were coming to Eilat, to a place where there was no high tech infrastructure, and we wanted to establish something, we couldn’t just create an accelerator or a venture capital fund, we had to create a sort of mix- a new hybrid that combines successful models from the industry, such as an incubator, a hub, and accelerator, and a VC. This is how we created Eilat Hub; the mix let us create a stable ecosystem where there was no ecosystem before.”
What’s happening now in Eilat Hub?
As we already mentioned, since the doors of the hub opened, the hub has drawn in a respectable number of startups and entrepreneurs, at an unexpectedly high rate. Most of the startups are still in their diapers, but some do have a product beyond the initial models. Some with clients and some even on their way to their first rounds of funding and breaking into the US market. When we asked Or which fields the hub prefers to invest in, he shared that at the moment it’s really everything — “Smart City, Fintech, payment services, Biotech, Agritech, holiday bookings, trading, chat, fashion, digital customer clubs, storage, and much more.” One of the startups that’s already making good progress and penetrating the US Market is UppSale, A software and hardware provider of smart digital menus. They have the ability to improve the customer engagement, collect client use data, analyze it and create predictive suggestions to increase sales. They have already partnered with Samsung, and among their customers you can find Hilton Hotels, Kakako coffee house, El Gaucho restaurant and more.
Everyone who wants to join the hub can do it for free. The working space and business guidance are available without any fee, paid for by the municipality. If a venture gets accepted into the incubator program, they need to sign a “new startup” contract and give a small percentage to the hub. When they get to the proof of concept stage, they start working on business development, marketing, and penetration of the US market, before checking the grounds for raising investment.
The goal is to invest in entrepreneurs and make Eilat a high tech city. The hub organizes hackathons and runs acceleration programs with industry leaders such as Eilat Hub Accelerator program with Ben Gurion University in Eilat and with the office of Tourism. Eilat Hub is also investing in integrating education among minorities. They work with teenagers in organizations such as Unistream in Eilat. Some of the teenagers do this throughout the army to gain experience. Women, this is for you. Hub Eilat is collaborating with SheCodes organization that offers programming courses or lessons especially for you. Since the opening of this course in Eilat, 70 women joined.
The Eilatians didn’t have many high tech possibilities. A lot of the entrepreneurs abandoned the city because they didn’t have a place to invest and develop their ideas. Well not anymore. Now the Eilatians can invest in high tech and enjoy all of the other pros the city has to offer. In the Israeli scale a four-hour drive to Eilat can seem like an eternity away, whereas on a larger global scale, it’s considered more of a neighbor to Tel Aviv. “A few hours of driving in the business world is nothing, and in the digital age, Eilat is a click of the mouse away from Tel Aviv, San Francisco, New York, and Beijing. Also they are building an international airport in Eilat, which is only a 10-minute drive away from the city. From this point Eilat is actually at the heart of business.” Due to the size of the city, its distinct borders, and the diversity of the citizens, this is an ideal city for piloting new apps and innovations.
Furthermore, “the burn rate (defined as, the rate at which an enterprise spends money, especially venture capital, in excess of income) of a company in Eilat can help manage the startup more efficiently. This is through lower rent fees, lower salary expectations, greater business benefits, and tax benefits. More money can be conserved for the real goals such as product development and marketing, when managing your business from Eilat. All the things I mentioned fit in to the Lean Startup trend, looking to maximize ROI (Return on Investment) and focus on the real value.”
Of course, don’t forget the positive Eilat vibes. “There’s a unique Eilat lifestyle that suits entrepreneurs. They can sit with their laptop, working from the Dolphin reef, or on Moshe’s beach. The startup feels like it’s achievable. A Taglit-birthright group visited the city and the hub and were able to appreciate Eilat for more than just a great holiday destination. They realized it’s a high tech city. A city where there’s tourism, startups, and technology.”
In an investor’s meetup held in the GIA TLV conference in Tel Aviv a few days ago, Israeli VCs confirmed, “It doesn’t matter where the ecosystem is located, what matters is the quality of the team and technology, and if both exist, the investors will follow”.
And it’s true. Investors from Israel and around the world started approaching Eilat in search of new ventures. “Eilat is the most southern city on the map of the startup nation, and finally, looking at startup maps, you can see pins on Eilat. Eilat is a city with high tech.”
If all of this didn’t convince you yet, that you should move to Eilat to start your business, here’s one last incentive. Eilat Hub has a new startup competition in place, where the best startup will win $10,000 and the chance to join the Eilat Hub incubator. Follow their Facebook page, the program will launch on November 1st.
So, we’ll be seeing you in Eilat?