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Ravit Avidor: The Future of the Czech Startup Scene Looks Bright
Vogue Leaders30. 7. 2021
I’m a native Israeli living and working in the Czech Republic for the past decade. I find many similarities between the Israeli high-tech scene of the early 2000s and the current Czech tech scene. It sometimes feels like a travel in time, but the future looks promising.
I joined the Israeli high-tech industry in 2000, just in time to experience the high-tech revolution that dubbed Israel “The Startup Nation”, and came to the Czech Republic in 2010, just in time to witness a similar revolution here. In 2012, while working at AVG, the antivirus giant, I was fortunate to participate in the first IPO of a Czech company in the US. Fast forward to 2019, I co-founded an investment fund, which provides me with a deep insight into the Czech start-up ecosystem.
Many historical and cultural similarities connect Israel and the Czech Republic, and it is interesting to see what we can learn from them. Looking back, both Israel and the Czech Republic experienced tough times in their history. We have learned to overcome challenges as a way of life. This background is a fertile ground for innovation. Problems do not deter us, they trigger us to act. Startups commonly face an ongoing survival mode, hopping from one hurdle to another, and the survival instincts, now burnt in our DNA, are there to help us live through them.
The population of both countries is similar at about 10 million residents, so the size of the local markets is fairly limited. While this may seem like a disadvantage, it actually drives companies to look for global expansion and adopt global business standards at a very early stage. Without borders, the addressable market size multiplies.
Can the Czech Republic become a “Startup Nation”? In my opinion, it is definitely on the right track.
Going global comes with cultural adjustments. Both Israel and the Czech Republic have esoteric languages, unique to their region and spoken mostly by their small population. Our local languages, despite their cultural importance, are irrelevant in the tech world. English has been the business language of the tech industry in Israel for over two decades. It means that all corporate documentation, business agreements, internal written communications, and so on, are conducted in English. If I send a meeting summary to my Israeli colleagues, it would be written in English, even if everyone who might have ever read this summary speaks fluent Hebrew.
Learning English was not a priority in the Czech Republic for many decades, but it came with the revolution. The majority of the entrepreneurs I meet these days speak English fluently. Looking one generation ahead, English is now part of the school curriculum and parents invest significant efforts and money, to help their kids improve their English. Although English is not the business language of the Czech tech ecosystem yet, things are evolving in this direction and forming a good foundation for global business culture.
Cultural differences are not just about the language. Both Israel and the Czech Republic have their unique culture. The Israeli style, for example, is very direct. This is not always accepted favorably by Western counterparts. For many years, the cultural gap made it difficult for Israeli startups to offer consumer solutions. They focused mainly on deep tech b2b, such as enterprise IT security. Israel’s competitive advantage relied on its skilled human capital, leading the world in per capita scientists and engineers at the time. Today, Israel remains among the most educated countries in the world with a tertiary education rate of over 50% of the working-age population. Just like Israel, the Czech Republic's strength is in its human capital, with over 70 universities across the country. Similar to what Israel has experienced, the vast majority of Czech startups offer solutions for businesses.
Finally, in the early 2000s, operational costs in Israel were significantly lower than operational costs in Silicon Valley. While this is no longer the case for Israel, it is still the case for the Czech Republic. That is a huge advantage for local startups that can hire a skilled workforce for costs that are significantly lower than those of competitors in the US or many other European countries.
The characteristics that made Israel “The Startup Nation”, seem to work here too. There is passion among young people in the Czech Republic to create, innovate, and be successful. On average, our fund reviews over 100 startups monthly. As a result, over the past few years, the Czech Republic became growingly attractive to entrepreneurs and investors. The strengthening of the Czech tech industry is also evident in the growing frequency, in which we see Czech startups exit to international buyers, at increasing valuations, as well as large investment rounds at valuations of hundreds of millions of Euros.
Ravit Avidor is a co-founder and partner at Lighthouse Ventures, a Prague-based acceleration and early-stage fund. She has been active in Corporate M&A and Venture Capital for the past 15 years. In her career Avidor has performed a broad range of acquisitions, from small acquisitions to over $600 million, with a wide geographical range, including North and Latin America, Europe and the Middle East. In her most recent M&A position, she served as VP, Corporate Development at AVG (NYSE: AVG), the consumer and business security company. Before AVG, she held key positions in the Israeli tech industry. This article was also published in Czech. Join Vogue Leaders on LinkedIn.