Startup City Q&A from Inside Tel Aviv

by TODD STOLARSKI | Aug 6, 2015

In the U.S., Silicon Valley has been the technological hub since before and after the bubble burst. It’s been so famous, it even has a critically acclaimed HBO program named for it.

Step outside of the U.S. borders, though, and you will watch a different story unfold. Tel Aviv, Israel doesn’t have its own television shown, but it currently boasts over 5,000 nascent tech companies inside its walls. It should come as no surprise how it got its nickname Startup City.

Co-founder of BuiltWorlds, Matt Abeles, recently took the opportunity to visit with two of the 5,000 in the city as he sought to find what made this city so attractive to young technological entrepreneurs. He had the chance to catch up with Lior Barzilai, Managing Director of Mindspace, a coworking incubator space inside the capital city and Dan Star, VP of Business Development at MUV Interactive, who we featured last week as part of their revolutionary wearable, bird.

Both men were kind enough to give Mr. Abeles a greater insight into what it’s like to be gutting it out as a young tech company in Tel Aviv.

BW: With Tel Aviv being a massive technological hub and our metropolitan cities only getting “smarter”, what, if anything, has the local government done to accelerate this growth process?  

 Star, the answer man.

 Star, the answer man.

Dan Star: The Government of Israel, through its Office of the Chief Scientist has a comprehensive program to encourage innovation and entrepreneurship.  MUV Interactive is proud to be part of this effort.

Lior Barzilai – The army provided the technology knowledge to most of the people here.  They teach them. They serve for 3 years, maybe more.  From a young age, they get a better education about technology.  But they’re also incubators and accelerators of government. For every dollar invested, the government will invest another. This is one of the engines of the economy. It’s a very welcomed environment. The government encourages this ecosystem in this constantly growing industry.

BW: ­How does a startup there stick out among the growing herd of thousands?

LB: Oh yeah it’s tough. Good people, good ideas, and good investments.  Companies find it easy to raise money in the seed stage. There’s a lot of money going around.

Abeles, left, with Lior Barzilai, of Mindspace

Abeles, left, with Lior Barzilai, of Mindspace

Great place to start, raise your own business. People here are willing to take chances. If you have a good idea, are a hard worker, and use you use your money wisely you can succeed.  People here sometimes, invest not in the idea, but in the people.  If you have a good team and people believe in you, you will raise the money and will differ from the others. It doesn’t matter what your idea is, it’s more about who you are. A lot of the companies start being A and find their selves being B. The idea and their business changed along the way. They invested their money to be one company but ended up being something totally different.

DS: MUV Interactive and its bird product stand out due to its high perceived value and need. We have been driving appearances in shows and events, as well as been featured in news channels.  As a result, our website orders are soaring.

MUV's Interactive's bird, seen above, soaring.

MUV’s Interactive’s bird, seen above, soaring.

BW: ­ How would you describe the startup scene here?

DS: Massively networked, immensely innovative and entrepreneurial and an open environment for brewing new ideas.

BW: ­ What are best aspects of doing business in Startup City? 

DS: The maturity and expertise available make it an ideal operation environment. Furthermore, it’s second to none vis-à-vis integration into the silicon valley ecosystem, investment and business sphere.

LB:  In Tel Aviv, it’s a small place. If you are ambitious and can open the right doors, you will have a lot of opportunities. Everyone knows each other. That’s a big advantage, as far as I see it. There are many brilliant minds here so you can grow a great team together. Everybody helps each other. Connecting the dots is even easier here.

BW: ­ Conversely, what are the downsides to doing business here?

DS: Not much, except for the high cost of office rental in premium locations.  It’s precisely being located at the eye of the storm. With everybody knowing everyone, it’s difficult to stay under the radar for long.

LB: The taxes are heavy. Rent in Tel Aviv in very expensive. It’s expensive in general.

Inside the mind space of Tel Aviv

Inside the mind space of Tel Aviv

BW:­ Compared to other major metropolitan cities nearby, what are the costs of doing business in Tel Aviv?

DS: I’d say reasonable. You can reach anyone you seek within a phone call or two. Rentals are a bit high and competition for experts is sometimes fierce. But it works well.

BW: What tips would you give to an entrepreneur thinking of starting ­up their tech business in Tel Aviv?

DS: Get into the business, network quickly, open up, and reach out.  People will embrace you pretty much immediately, no matter what language you speak.

LB: Come to Mindspace!, No, just kidding!  A hard worker with a great idea can excel here..and great minds will help you do it here.


Like a human body in the midst of a long run, Startup City is taking deep breaths. For every exhale, a state-of-the-art product debuts and a revolutionary service changes the way we live. Each inhale brings new companies, ready to run the race in hopes of reaching the finish line of their initial public offering. Mindspace and MUV Interactive aren’t in a sprint, though; they’re running a marathon.

Special thanks to Dan Star and Lior Barzilai for taking their time to give us their insights.
Be sure to check out their digital footprints:

MUV Interactive:

Note: This article is from our archives. Some links, images, and text may have been altered from the original formatting.