On April 29-30, 2019, the first CityZoom Smart City Conference took place, at the beautiful Natural History Museum at the Tel Aviv University.
Gaby, our Managing Director, had the pleasure of taking part in a panel led by Monika Rozalska, CEO of Creators IDEAtion Lab, side by side with Iris Arbel Ganz from Herzliya’s HAC, and Or Haviv from Hub Eilat.
The discussion was quite interesting, so here are some of the questions presented by Monika, and what Gaby had to say about them.
Monika: Tel Aviv is a developed innovation ecosystem, well-known for its pilot processes with startups, own innovation initiatives, creating many innovation hubs and programs (The Platfrom, The Library…). What is CityZone adding to the picture that did not exist before?
Gaby: CityZone offers several innovative concepts beyond what’s already out there:
Our search for startups begins with a clear definition of municipal challenges, so selected startups can be connected to a relevant pivot within the municipality from day one and start making progress. This, combined with the slightly later stage and maturity of the startups, also potentially generates quick wins, that win people over, as some quick outcomes can be shown quite immediately, also enabling a focus on validating product-market fit, rather than ideation and storytelling, which are more aligned with the very early stage programs.
Our beta site is another different angle, as CityZone is Tel Aviv’s Living Lab, therefore collecting data from multiple sensors and devices, running on different types of communication networks. We take all this data and more, and make it available to our startups, as if they were already working with a paying customer, thus solving a tricky thing for pre-customers startups, which is how to put their hands on real life customer data to develop their solutions on and prove that they actually work.
The partnership with the Tel Aviv University is another unique proposition compared to other municipal programs, as this enables us to connect startups to the most relevant top talent within the academic world, looking at cities from many different angles – geography and environment, architecture, engineering or public policy.
And lastly, our relationship with the private sector is critical. Not all city challenges need to be addressed by the municipality as the customer of the startups. Some can be met together with the private sector, which is why we are partnering with a series of multinational companies, such as Renault Nissan Mitsubishi, Dell Technologies and others, that can perform as the design partner for startups who target such corporates rather than cities as customers. They can also bring significant knowhow and contribute a lot to the understanding of how solutions should look like, in a joint conversation in a round table, together with the startups and the municipality.
Monika: You’ve started only recently. Can you share the first successes of the lab? And what would be the ultimate success of the place?
Gaby: It’s quite early to discuss success, as we have only officially launched 4 weeks ago, with the first 4 startups having moved in only recently.
However, thinking clearly into the future, our focus is first to make sure that the urban challenges presented by the city and our business partners are met successfully, and with a long term sustainability – meaning that we see ourselves doing our best to contribute to the financial stability and viability of the ventures in our program, by helping them expand to other cities in Israel (through cityzoom) and international markets as well.
On top of that, the more academic talent involved in the industry, with the knowhow and creativity they hold, the better.
And of course, as we are building a community, which has a physical presence in the world – a beta site, relevant for all kinds of companies to tap into – it would be great to see more and more companies realizing the benefits of relocating to Atidim, and becoming an integral part of this ecosystem.
Monika: Why do the cities and municipalities around the world struggle to implement innovative solutions? What would be the top obstacle that you see?
Gaby: I would say that current regulation on procurement processes is a big challenge that needs to be solved on a national level.
Naturally, these processes have been designed to protect the public purse. But when discussing innovation, there needs to be a different balance. We started seeing some attempts at designing better procurement processes, and separate ones for the sourcing of innovation in the public sector, in the US and in Spain. It’s time to see what can be done in Israel as well.
It is hard to sell to organizations of any kind, but in the private sector, usually the process is faster , and the cheque size at the end is larger.
When cities can’t easily pay early stage startups, as they sometimes don’t meet minimum tender requirements, they find themselves asking entrepreneurs to work for them for free. The justification is sometimes the reference and case study to be used for future customers. By doing so, cities are shooting themselves in the foot – these startups will not be able to generate revenue from customers, and they will also not be able to prove to their potential investors, that there is a real market need for their product, and that someone is willing to pay for it. That’s when the investors also shy away from the deal and the startups end up dissolving. The city is left with the challenge it wanted to solve, but with no innovative solution that could have been achieved.
Monika: Are the city officials becoming more welcoming towards innovation and technology? If yes, what do you think has been changing in the last couple of years?
Gaby: Tel Aviv is a great example of a city that has deeply understood the value of working with startups and around innovation.
The municipality started with different platforms to improve citizens’ lives such as the Library, the Platform, the different municipal hackathons, the Startup Committee and now CityZone to complement these efforts. Each activity directed at different stages, and sometimes also different domains.
With each activity, the municipality manages to get more and more stakeholders and internal customers within the municipality involved with the different ventures – community, transportation, education, etc. Getting the “end customers” involved from the very initial stages of working with startups, allow them to present their inputs and knowledge from the field, and then have a direct impact on the solution that’s being developed with them as design partners, generates a much higher likelihood of success.
Monika: What are the ingredients for creating a unique and different value proposition in the “innovation hub” world?
Gaby: As you have identified correctly with the amazing project Or is running in Eilat, they decided to focus on their strengths around travel tech. Such is also the case of the different projects presented by Dr. Erel Margalit earlier this morning in the conference, where the agriculture land of the Galilee area can support the efforts around establishing a food tech ecosystem, and Haifa can take advantage of its access to leading universities and hospitals to focus on digital health. I would suggest they also focus on logistics, trade, and anything related to the sea port, as well as petro chemical industries.
Some may think our life is easy, because we are Tel Aviv, and as an industry leader, it’s easy to get the startups and the corporates on board, but let’s not forget that we are competing with most other innovation programs and hubs in the country, almost all based in Tel Aviv as well, over the same talent and resources, so differentiation is indeed challenging.
We had to find something unique to us, in order to attract all the relevant pieces of the puzzle we’re forming, to complete a comprehensive ecosystem – the startups, the city, the academia, the business partners, the community, the international relations – and here the physical beta site, a real place where everything happens, with the required control to be able to implement and test quickly, with less bureaucracy – this is something not many cities in the world can offer such an ecosystem, and it can be found at Atidim.
The cherry on top, is that this is not an empty space now being built as a smart city lab. It is a vibrant area in the city, already there for almost 50 years, with its visitors, vehicles, garbage trucks, street cleaning, sewage, water pipes, street lighting, buildings, restaurants, and more, so testing here means verifying that we examine things within the context of real scenarios. Not engineered and controlled ones. Most urban redevelopment processes will take place on top of existing infrastructure, not a clean slate. This is what makes us unique, and attracts all the different stakeholders to CityZone.
It is only the combination of all these resources together and the synergies between them, that provides a great starting point for amazing things to happen.