Blueprints for a successful POC in the Israeli Ecosystem

Bridging the diverse gaps between potential collaborators to go the distance and achieve large-scale integration is the biggest challenge facing both Israeli innovators and multinational corporations. After all, the true impact of innovation can only be experienced when finished products and services are made widely available to consumer markets – but how can you convert a concept into a ready-for-market product?

In partnership with OurCrowd, Start-Up Nation Central is proud to release the most complete and detailed roadmap for converting a good basic concept into a thoroughly tested, viable product that is ready for market. Based on extensive data compilation and analysis, along with dozens of in-depth interviews with key players from Israeli startups and large multinational corporations (MNCs), the “POC Playbook” serves as the ultimate guidebook for forging a successful collaboration between these otherwise disparate parties.

“The significance of a good corporate champion cannot be understated – at the end of the day, the ‎champion is the one who makes things happen.”

Tal Brockmann, Founder & CEO, Finnovest

Although a POC (proof of concept) in the Israeli startup ecosystem typically lasts for only a handful of months, it is the culmination of a much longer process that involves countless moving parts. The very first stage of the journey for both parties is to perform an honest and thorough internal assessment of their own pain points and unmet needs. Furthermore, the MNC’s open innovation team must be prepared to adequately convey this information to their counterparts. Likewise, the startup must provide a detailed breakdown of its solution, how it addresses the MNC’s existing challenges, and the strategy by which the solution can be evaluated and implemented.

Finding the right partner can take time, but it is a process that must not be rushed. MNCs must not only consider whether the startup’s solution adequately addresses their unmet needs, but also if the startup’s overall capabilities will be a good match for the corporation’s targeted budgets, timelines, and other limiting factors. Cultural disparities make the initial meetings more challenging than they would be with a comparable startup in the US or Europe; Israeli corporate culture is notoriously informal and relies on a unique lateral hierarchy, with great responsibility and authority often delegated to lower-ranking personnel. A certain measure of cultural sensitivity is required to see how these differences drive the Israeli ecosystem to be so disproportionately productive across the various fields of tech-driven innovation. By learning to embrace and value these differences for the unique benefits they bring to the table, they will become a significant advantage to your partnership rather than a potential liability.

“Startups and MNCs have different sets of expectations when conducting a POC, and it’s crucial to manage your own organization’s expectations for the project as well as clearly understanding those of your partner.”

Matan Rahav, Director of Business Development, CropX

The next step is clearly defining the project’s scope, timelines, budgets, targets, methods, KPIs, regulatory issues, intellectual property considerations, long-term integration potential, and each partner’s commitment of resources and compensation guarantees. This phase requires a great deal of patience and transparency to negotiate in good faith for the mutual benefit of both parties. You cannot force a round peg into a square hole; both parties must diligently address all of these crucial details as they create a roadmap toward a successful partnership. It is essential to align the expectations of the collaboration teams and select an appropriate champion who is committed to the success of the project and both empowered and motivated to shepherd it through to completion.

The best-laid plans can sometimes go awry despite our best efforts, so the next stage is evaluation and testing; depending on the nature of the collaboration and the product or service in question, this may be done through a limited production run, pilot, MVP, beta testing, market research, cloud-based sandbox environment, etc. To whatever degree possible, evaluating the various moving parts of the collaboration in an environment resembling real-world conditions before launching the final stage of total commitment to the POC is recommended. Once launched, it is critical to monitor and analyze your progress, comparing the results to your predetermined KPIs and projections. As the initial data are processed, you can begin compiling the business case to take advantage of the project’s momentum and foster conditions that will allow for a smoother transition to large-scale implementation.

“You need to build sort of a business plan for something that doesn’t exist…and you need to prove that it can be profitable – it’s a skill you need to develop.”

Ilanit Kabessa, AgriFood-Tech Expert, working with multinationals

Each section of the POC Playbook is summarized in an easy-to-follow set of key guidelines and best practices based upon the knowledge and experience gleaned from the following sources:

• Desk reviews of academic papers, articles, and reports from consulting firms, VC funds, accelerators, and relevant NGOs and government agencies.
• Interviews with leaders of multinational open-innovation teams with experience in the Israeli ecosystem.
• Data from startups in different fields of interest and stages of development.
• Start-Up Nation Central’s sector analysts’ insights.

“What makes the Israeli ecosystem such an attractive and successful source of innovation for our organization is the informal style that allows us to establish good working relationships and get things off the ground really quickly and easily.”

Taly Ramon, Innovation Consultant (former BNP Paribas Open Innovation Consultant)