Israel has become a hotbed of entrepreneurial activity around smart mobility, turning out the likes of Mobileye, Waze and Gett, and many others. About 400 others, by recent estimates. But start-ups alone cannot effect an industry transformation.
To do that requires support, collaboration and cross-sector co-operation. Enter DRIVE, the recently established smart mobility innovation centre in Tel Aviv. Launched by Mayer Group, which made its name as a local importer and transportation supplier, DRIVE counts among its founding members the car rental specialist Hertz, Israeli telematics company Ituran, Honda and Volvo Cars.
“We have many start-ups in Israel in the field of transportation, but Israel doesn’t have any industry,” commented Boaz Mamo, co-founder and Chief Executive of DRIVE. “In Israel, you never produce a car. You do not have big companies that deal with automotive and transportation. Many of these global companies are looking for innovation and the question is how to create this bridge.”
Hertz is a global company with international spread. When the industry moves to autonomous driving, they already have the knowledge of maintaining fleets so it will be easier for them to deploy that kind of service very quickly. – Boaz Mamo, DRIVE
Bringing the two together could yield big benefits. “We see many new, very talented entrepreneurs in Israel, but they have no clue how this world of transportation works, what they need to look at, what they need to think about. DRIVE is trying to help those companies to obtain that knowledge from our partners and from our own experience,” he explained.
More than just matchmaking
Specifically, DRIVE aims to nurture promising start-ups and foster relationships between them and established players in the transport industry. “The first thing is to choose the right start-ups, some of which are not even in the field of transportation. Some of these start-ups are companies from industries such as health or delivery, which have nothing to do with transportation but could have a relevance,” Mamo told Megatrends.
Later stages of the DRIVE initiative involve educating the start-ups on the machinations of the automotive industry and how general entrepreneurship works. “Here you will have workshops and events around how to build a company – legal, accounting, business consulting, etc, ” he explained. “After the company has a product and knows how to work, then we start to do the matchmaking. This means helping the right start-ups to work with the right corporate body.”
Just like a dating couple, potential partners need time to get to know each other and that is what Boaz and his team seek to facilitate. “You need to create opportunities for them to know each other, and you need to create opportunities that are relevant for both sides. You need to find the right interactions.” The first meeting is like a first date, he suggested. “You need to create the right atmosphere and the right environment for them to meet and talk about the right topics. After that, you need to build the right systems that will enable them to continue to interact. To get one date is easy, but the hardest work is to maintain that relationship.”
Levels of commitment
DRIVE offers three different programmes: Co-working space, FastLane and Prototype lab. Each of these represents a different level of commitment from the participating companies. “In the shared workspace, there is no commitment. You can come here, start to know each other. It is like moving in together before marrying,” Mamo commented.
We want people that are really ambitious, and looking for something they can change, that they can push forward. The second thing we look for is good ideas, and people that are trying to solve big problems. After that we’ll look for new technologies. – Boaz Mamo, DRIVE
FastLane marks the second level of commitment, where there are more intensive interactions between the companies, with the emergence of plans to make something more sustainable. The Prototyping lab offers partners the opportunity to commit to building something together. “It is a whole process of building trust, of building an understanding of the product, of building relationships,” he added.
Trying to change the world
DRIVE’s aims are ambitious. “When you work in transportation, you really can change the world. Transportation is critical and can change the way our economy works. Moving people from one place to another changed the world in the industrial revolution. People could move to suburbs and could work in other locations. The economic growth was tremendous,” he pointed out.
The impact of autonomous driving and the shared economy, and the subsequent new business models, will change people’s lives. “For us, the programme is a way of helping this change to happen and to improve transportation, with better services so that everyone will have safer, more secure, less polluting, cheaper services in every aspect of transportation. I know it sounds like a big ambition, but we really are trying to make it happen,” Mamo said.
A good fit
It is a modest effort at the moment, with just seven companies involved from an initial screening of 40. Interest has been remarkable, said Mamo, with a very high number of applications. When it comes to companies that would make a good fit with DRIVE, Mamo and his colleagues are looking first for great teams. “We want people that are really ambitious, and looking for something they can change, that they can push forward. The second thing we look for is good ideas, and people that are trying to solve big problems. After that we’ll look for new technologies,” he explained.
When you work in transportation, you really can change the world. Transportation is critical and can change the way our economy works. – Boaz Mamo, DRIVE
The vehicle manufacturers are represented – for now – by Volvo Car and Honda. Car rental giant Hertz has also joined. “Hertz can be a very interesting and central player in the new mobility world,” said Mamo. “If you think about the new world of transportation, cars will be autonomous. Many of them, perhaps most, will be shared and not privately owned. Hertz is a global company with international spread. When the industry moves to autonomous driving, they already have the knowledge of maintaining fleets so it will be easier for them to deploy that kind of service very quickly.”
Offering the Hertz perspective, Group President Michel Taride commented on the challenge for a well-established company when it comes to adopting new trends. “The whole challenge is how to integrate a new technology in a legacy company like ours,” he told Megatrends. “For an old big global company, how do you transform? Do you do it through an R&D department? Do you do it by having an internal lab or by acquiring a company? With an incubator like this, you show your trust and at the same time you influence these people to look at start-ups. They make the investments, and then you can almost pick and choose.”
Taride runs Hertz International, but he emphasised the company-wide effort being put forth. “I make sure that I get the buy-in at the most senior level, CEO level, in our company because otherwise it becomes someone’s pet project and nothing happens, and that would be foolish.”
Everyone’s a winner
Besides location, it is the cutting edge smart mobility technology, the focus on networking and collaboration, and the development of meaningful long-term partnerships between well-established companies and start-ups, which appears – on paper at least – to be the perfect mix for innovation in this area.
DRIVE gives partners the opportunity to feed ideas and requirements into the programme; the DRIVE start-ups work on those ideas and all parties benefit. But make no mistake, this is no easy way for Honda and Volvo to syphon ideas at others’ expense; both already have their own initiatives for developing cutting edge technologies, and appropriately high benchmarks and expectations. Honda’s Xcelerator ‘is a global scale open innovation program designed to facilitate collaboration between early stage technology start-ups and Honda’; and Volvo is already pushing the envelope on various megatrends, with electric car development, its Drive Me public road autonomous driving test programme in Gothenburg and soon also London, collaborations with Autoliv (autonomous driving software) and Uber (autonomous ride-sharing fleets), and renewed interest in Sunfleet, its car sharing and mobility services strategy that has been running since 1998.
For an old big global company, how do you transform? With an incubator like this, you show your trust and at the same time you influence these people to look at start-ups. They make the investments, and then you can almost pick and choose. – Michel Taride,Hertz International
Were a FastLane start-up to show promise, its ideas would be nurtured, but beyond the financial and infrastructure support offered by the programme, any investment would take place outside DRIVE. Indeed, the DRIVE website makes it clear that ‘DRIVE is not an investment entity. However, DRIVE has an exclusive partnership with an early stage fund called Next Gear fund, which can provide very generous deal terms to strong DRIVE FastLane companies.’ DRIVE will, however, promote the programme’s best ideas to investors in Israel and the US.
Something about Israel
Considering the level of innovation coming out of Israel at present, it is not exactly surprising that the country would produce an initiative such as DRIVE. There are many theories on why the atmosphere there is so conducive to innovation, many of which tie in with the country’s military expertise. Mamo has his own suggestions. “For me, there are two things that make Israel such a big leader here. If you look at the fields where Israel excels, they are the fields where Israel was struggling.”
Agriculture is one example – Israel does not have much land so it had to invent new agricultural solutions. There was a similar challenge with water. “I think it is from struggle and from hard times in different aspects that you create innovation,” he noted.
There is also a positive approach to learning from failure in the country. “In Israel, failing is not a bad word. Failing is a good thing. It is seen as experience,” Mamo commented. The key is to implement the learnings from failure into the next venture to make it a success. “Many things are creating this atmosphere of innovation and change, and it’s a great vibe to be part of this ecosystem,” he added.
To make it into the DRIVE programme, start-ups need to come with a unique value proposition from a list of suggested areas of expertise that reads like a Megatrends magazine contents page. Israel has already proven it can produce highly valued electronics talent; now it’s over to DRIVE to nurture such talent for future mobility business models.
This article appeared in the Q2 2017 issue of Automotive Megatrends Magazine.