Companies

Fostering Indo-Israeli business relationships, the Polynation way

N Ramakrishnan Chennai | Updated on January 11, 2018

Ofir Mizrahi, Partner, Polynation Ventures, an Indo-Israeli business incubator. - N. Ramakrishnan

Understanding the cultural mindset key to build business here, says Ofir Mizrahi

Ofir Mizrahi has his task cut out. As Partner at Polynation Ventures, a platform that seeks to promote greater collaboration between Israeli and Indian companies in the areas of technology and innovation, he wants to get more Israeli ventures, many of them dealing with cutting-edge technologies, to look at the huge market that is India. At the same time, he would like many more large Indian corporate groups to seek technology from Israeli companies.

Over the last decade he has made numerous visits to India, is now working on a postgraduate programme that is focussed on Indian studies. His thesis is consumerism and how that is being used to promote nationalism in India. “I also studied Hindi. I can speak Hindi, which is useless here,” he says, during a visit to Chennai last week, when he addressed a session organised by the TiE Chennai chapter on bridging the Indo-Israeli innovation gap.

“It is really helpful to understand the culture if you want to do business,” explains Mizrahi, as he seeks to leverage his understanding of India and its people to grow Indo-Israeli business dealings. Israeli companies, he says, have the latest in technology, but their approach has always been to sell directly to their clients in India. This does not work. “They hardly ever meet. There is a cultural gap and the idea in Polynation is to give a solution for that,” he says.

Picking right innovation

What is the solution? Polynation first scouts for the right Israeli innovation. It has to be a product that meets a need in the market, not one that is nice to have. Polynation identifies those Israeli companies that may have the product or technology that India needs. It works with partners in Chennai, Ahmedabad and New Delhi and identifies Indian partners with which the Israeli companies can tie up. It has just helped finalise one such deal – between Confirmu, an Israeli data analytics start-up that helps lenders use alternative credit rating techniques to score those with no prior financial history and lend to them, and an Indian partner.

According to Mizrahi, Polynation scouts around for Israeli companies, filters them based on the need in the Indian market and with the help of its partners here, finds suitable Indian partners to form a joint venture.

He explains the difference between the Indian and Israeli approaches to innovation. Indian ventures study the market to find out if a product is needed and, if so, at what price point can it be offered to customers. They then work on developing the product.

In Israel, says Mizrahi, the roots for innovation many times come from the military. “In the army, when you put lots of money into technology, you don’t care about the price. You just care about creating the best possible technology.”

According to him, Israeli companies find that the price at which they are offering a product to the Indian market is often too high. That is because the product has more features than what the market needs. When Indian companies start talking in terms of cutting the price or removing some of the features, it means they are interested in the product. Israeli companies, he says, find it difficult to understand why someone would want to remove features. India is a highly price sensitive market.

Direct approach

The Israeli way is direct: here is the product and this is the best possible price that I am prepared to offer it to you at. Indians, says Mizrahi, just cannot understand this approach. They believe in negotiations and long-term relationships. The Indian business partners want to meet and understand their Israeli counterparts through negotiations. The Israelis don’t have the patience for that, explains Mizrahi.

“Israelis try to make it fast. We are living on urgency mode. We are on survival mode. We don’t know if we will be there tomorrow. We don’t have the time for negotiations for six months. We want to close everything today. One of the things you will hear from the Israeli side is, ‘this is my best offer,’ two minutes after we meet. Which is a disaster from an Indian perspective because the Indian side is coming from a negotiations-based society,” says Mizrahi.

This is where Polynation steps in and helps brings the two sides together through its screening process and by working with partners in India. Also, business with India, unlike in other countries, cannot be conducted over Skype or telephone calls. There has to be direct contact.

Israeli companies, for historical reasons, have always looked West, for its market. This is a huge mistake as India is a large market. There are several hundred start-ups in Tel Aviv alone and several of them can look eastward for a potentially huge market.

Israel is strong in fintech, biotechnology, water solutions and agri-tech, all of which are promising sectors from an Indian market perspective, adds Mizrahi.

Published on July 16, 2017

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