ISRAELI BUSINESS IS ABOUT INNOVATION
Meet as many people as you can. Focus on the customer. Take advantage of discounts. Zig-zag and adjust to change. Use social media. Develop a theme such as quality or price. These are some keys to success, according to two Israeli entrepreneurs who spoke live from Israel at the International Business Initiative.
Gary Swickley created Kosher Casual, a business that manufactures and sells modest womens clothing via their website, Amazon, their warehouse store and wholesale worldwide. He earned an MBA from Harvard in 1984. His business emphasizes modest clothing updated to more modern styles at affordable prices. Gary started out in the clothing business buying up production overruns and selling them in his three stores in Israel. Kosher Casual currently sells 60-70% to Christian customers with the balance being orthodox Jews. Although a small niche in the market, the demand for modest clothing is growing. Kosher Casual is not rabinically supervised and the clothing is not necessarily Kosher as per Leviticus 19:19¹. But there is a growing market for attractive, modest fashions and he found that niche. All his current production is made in Israel mostly with fabrics imported from Turkey and Italy. As quotas have opened up for clothing import from the Far East to the US, Israels garment production has been almost wiped out. Gary uses a lot of social media to promote the growth of his business including Facebook, blogging, Google Ads, and connecting actively with other bloggers focused on modest clothing.
Saul Kaye from Australia started the first Emergency Pharmacy of Jerusalem. It expanded into mail order in order to capitalize the price arbitrage that exists in the Israeli pharmaceutical scheme pricing. Israel sets the maximum retail price for medications while in the US there is no limitation. For example- Lipitor(an anti- cholesterol drug) may cost $70 in the US and only $10 in Israel for the exact same medication. IsraelPharm, the first and now largest online pharmacy, had 3 retail stores and services 30,000 patients and continues to grow at 25% per year. One of the challenges Saul faces is reliable legitimate credit card processing. IsraelPharm was able to find international cc processing for 5-6% less than the current processing rates.
He sells directly to the customer and requires a prescription. Google, which bans pornography, gaming and drug advertising does not allow advertising on its platform, making marketing a constant challenge. IsraelPharm cannot advertise online. It receives no money from insurance companies.
In terms of startup mentality Saul recommends starting a business lean and finding angel investments that add value not just money. Angel investing is meaningful in Israel but there is less government financial support. He uses Our Crowd for crowdfunding. The cost of living is lower in Israel allowing startups to operate leanly and build quickly.
Saul believes Israel in 2015 is about innovation. People build communities on social media and social marketing matters. As an example IsraelPharm gives a small Israeli gift with orders. Obama Care helped IsraelPharm and the model continues to be strong in the face of changing regulatory influences. Saul is heavily involved in Cannabis and the industry is widening every day in Israel ,even faster than the US. Hebrew University was the first place to study cannabis and the Israeli Ministry of Health has the largest medical marijuana research program in the world. Saul is known as the cannabis pharmacist.
Success in business involves being able to zig zag. Be very fluid. Find a niche. Never stop improving. Adjust to change. Differentiate yourself in the market. Put yourself out there. People are looking for passion. Take it out there to see if your idea is valid. Even when you fail, what you learn will help you. Pay investors back. Meet new people every week. Try to help them. You will be ripped off. Keep learning. Stay in contact with the customer. Listen to them. Saul has not signed a Nondisclosure Agreement in a long time. In Israel a patent or trademark is not required to attract investment. Learn from the businesses in Israel. Contact Saul at email@example.com, or Gary at firstname.lastname@example.org.
J. Michael Considine, Jr., who recently visited businesses in Israel and Palestine, is chairman of the International Business Initiative. He can be reached at email@example.com.