First-ever ultra-Orthodox high-tech incubator opens

A new tech incubator in Bnei Brak aims to foster high-tech entrepreneurship in Israel’s haredi sector.

If the first thing that comes to mind when start-up entrepreneurs s are mentioned is young Tel Avivians, the kind that lived and breathed technology even before they were drafted to the Israel Defense Forces (IDF), and who dreamed of an exit on their post-IDF travels to the Far East, get ready for a different kind of story.

Yitzik Krombi and Racheli Ganot, two haredi (ultra-Orthodox) high-tech entrepreneurs from Bnei Brak, launched their haredi high-tech incubator this week. “I already have a start-up, and Racheli has a chip-development company, ” says Krombi. A few years ago, we founded the haredi high-tech forum together, out of an understanding that what will lead to growth today, the integration in the market and the establishment of companies that will employ haredim, is just to help them establish start-ups. In the last two years, we opened courses, and mentorship programs, with the help of the Chief Scientist. We lobbied, we passed regulations and support channels for start-ups, and now we established an incubator that will help start-ups that are already on their way.”

Jerusalem Venture Partners (JVP) is supporting the incubator. “When I started out a few years ago, I met Erel Margalit, and I told him about my ideas, and he was excited, ” recalls Krombi. “Even now, the fund’s management encourages us, and pushes us forward.”

The incubator model has a few stages: The seed phase, in which the participant receives weekly meetings for 2-3 months. The second, advanced stage, which is four-months long, each company will receive NIS 200, 000-300, 000 and will formulate its business model. And the main phase, the incubator itself, which lasts eighteen months to a year, and in which each company will receive NIS 2-3 million, and develop its product. The funding will come from various sources, including the Office of the Chief Scientist and private investors, and will become a fund in the near future.

Is there sufficient potential in the haredi sector?

Krombi: “Yes, and there is a tremendous need for assistance. When we established our companies, there was no such thing. It is not easy for a haredi person to take this step. He can’t go to events like a ‘Start-up Bar.’ He doesn’t have a supportive environment. That’s why we decided to build the necessary ecosystem.”

Ganot: “The existing plans are important as training for employment, but they don’t make a start-up succeed. In the entrepreneurship week, for example, we had an activity, but we understood that we needed to help them with investors, and with the Chief Scientist.”

How much awareness of technology is there in the haredi world?

Krombi: “In 2006, there were 400 haredi students in technology fields. This year there are already 8, 000 who studied on haredi tracks. True, this population is less technologically oriented, but there are also those who are.”

Ganot: “It is actually a good fit for the haredi world. You can stay in Bnei Brak, and sell to the whole word. In my company, for example, there are many female, haredi employees from Bnei Brak. We do projects with companies like Sandisk and Intel – all without leaving Bnei Brak. In this line of work, the hours are particularly flexible, and it’s always possible to make up hours in the evening.”

And what about ideas for start-ups? This is not a population that lives it in the day-to-day…

Krombi believes that the fact the population comes from such a different world is actually a tremendous advantage. “All the big companies, especially Google, have ‘diversity.’ When a team has five white American men, their creativity will be lower than a team in which there are also Chinese people, or people from another culture. Integration is beneficial for companies. People who come with a different set of guidelines see things differently from someone who completed the army and university. This is a generalization, of course, but the difference is important. Moreover, there are not people who are cut-off from the world. The haredi people who launch start-ups have already learned in technology companies. They must have some background.”

There are halakhik solutions

Krombi himself went through the entire haredi track “by the book”: He learned in yeshivas and was even ordained as a rabbi. Only later he began to work in high-tech, studied at the Technion, worked in the field, and eventually founded an information-systems company. And if there are halakhic questions (questions of Jewish law), he can handle that too.

“Every step of the way, there are halakhic questions. For example, how to provide support or sell to other countries on Shabbat [the Jewish Sabbath]? But we find solutions. There are also problems like dealing with investment models that include interest. According to Jewish law, it is forbidden to pay interest. Here, the banks have solutions like a heter iska [exemption contract]. Being a religious entrepreneur is not a barrier, you just need to know how to look at it differently. But in terms of the work itself, there is no difference. Everyone wants a profitable company, and everyone deals with his own limitations.

Are the start-ups especially suited to the haredi sector?

“If someone comes and develops an app for Sabbath observance, chances are it won’t have a profitable business model, because the market is small. Someone once came with an idea for an app that would help people wait six hours between eating meat and milk. How many people are there out there interested in the idea? There has to be an economic business model.”

So why is there a for need a dedicated incubator for the haredi sector

Because haredim have cultural limitations that are barriers to integrating in other incubators. Someday, this will change, but right now, this will open the door. We make sure it is in Bnei Brak, we make sure that there is a modest dress code, and yes, there are female lecturers.”

What about female entrepreneurs?

Ganot: “We are approached by women. Right now, by fewer women than men, but there are more female programmers than male, for example. I think that I, with my presence, can encourage this and be an example for others.”

Do you already have examples of successful start-ups?

Ganot: “We have worked with companies that have already raised more than NIS 7 million. We have worked with a total of 30 companies, some of which were already in advanced stages.

Krombi: “We worked a company that developed an app for planning restaurant reservations. We also work with a company that manages shared living spaces. There is also an idea that I don’t understand how a haredi person came up with: controlling and managing television commercials, so you receive a notification when the commercial is over. Another interesting example is a company that developed a municipal garbage-truck management system. There is a chip on every dumpster. The truck reads the dumpster, and the city knows what’s been collected. It’s currently in pilot stages. Modi’in Illit, the city that the founder is from, is the first to test the system.”

Published by Globes [online], Israel business news – www.globes-online.com