Key takeaways
- Scaling requires capabilities beyond starting a company, including experienced leadership, global networks and repeatable distribution.
- AI makes headcount a less useful proxy for success, increasing the importance of productivity, retention and sustainable margins.
- Systems of record can create defensibility through trusted data and embedded workflows, alongside advantages such as distribution and network effects.
- Junior employees can bring fresh approaches to working with AI, especially when paired with experienced mentors.
- Israel needs stable institutions, investment in talent and a healthy funding ecosystem to retain more of the value its companies create.
Today I attended the Scaleup event at Reichman University, where a question stayed with me: what will it take for more Israeli startups to become enduring global companies, and how does that answer change in the age of AI?
The first four conversations were recorded live for ScaleUp Nation, hosted by Erez Shachar and Ram Ben Ishay. The podcast aims to become an Israeli counterpart to Acquired (one of my personal faves), exploring the stories and decisions behind the country’s leading technology companies and how they grow into global businesses.
Listening to the presentations and to the founders behind HiBob and Wiz (now part of Google), I found myself thinking about how much of our understanding of scale is tied to the way software companies used to grow. We count employees, celebrate hiring and associate larger teams with greater ambition. But what happens when a small team can build a business that previously required hundreds of people?
Survival and scale require different skills
One of the most useful distinctions in the presentation is between surviving and growing. Founder relationships, trust and a team’s technical foundations can help it navigate the early years. The slides associate growth among surviving companies with experience in large organisations and access to international networks.
These are associations, rather than proof that a particular background causes success. But the implication deserves attention. Building a global company requires familiarity with how customers buy, how larger organisations operate and how products behave when usage expands.
The founder who can personally rescue every customer relationship eventually needs a team that can deliver without that intervention. An improvised sales process needs to become repeatable. Engineering decisions must support reliability, security and cost at a much larger scale.
This gives Israel’s multinational R&D centres an additional role. They can develop future founders and managers who understand global operations. But that benefit grows when people gain exposure to customers, product ownership and commercial decisions alongside engineering.
The slides describe a useful bridge: bringing experienced global operators into growing companies. The goal should be to match experience to the next constraint. A company still searching for repeatable demand needs a different executive from one expanding an established sales organisation.
Growing globally and retaining value locally
International expansion is essential for companies serving markets much larger than Israel. The concern begins when the centre of expertise and decision-making moves with it.
The Israel Innovation Authority’s 2026 high-tech report found that the share of employees based in Israel at private Israeli high-tech companies fell from 69% in January 2019 to 62% in March 2026. It also highlighted the expansion of management and R&D activity abroad.
In an October interview with Globes, Innovation Authority chairman Alon Stopel cited approximately 440,000 people employed overseas by Israeli companies, including public companies, compared with approximately 425,000 high-tech employees in Israel in 2025. These are different populations, so the figures should not be treated as a precise split of one workforce. They nevertheless illustrate the international footprint of Israeli technology.
There are legitimate business reasons for hiring near customers and recruiting talent abroad. For Israel, the challenge is to remain an attractive location for the functions that shape the company’s future: leadership, product strategy, advanced research and the development of the next generation of managers.
Trust matters here. A July 2023 Startup Nation Central survey, also cited in the slides, found that 68% of surveyed startups had taken legal or financial steps in response to judicial uncertainty. Those actions included moving cash, relocating headquarters or employees, and layoffs. It was a broad measure taken at a specific moment, rather than evidence that 68% had left Israel.
The policy lesson remains relevant. Stable institutions, predictable rules and confidence in the future influence where founders build their companies and families. Resilience helps people withstand uncertainty; public policy should help reduce it.
What does scale mean in the age of AI?
One question from the day stayed with me: if AI allows a company to grow revenue dramatically without growing its team, what should we count as scale?
The 2007 Eurostat–OECD Manual on Business Demography Statistics, cited in the presentation, defines high-growth enterprises using “average annualised growth greater than 20% per annum, over a three year period”. Growth can be measured by employment or turnover. The manual proposes an initial threshold of ten employees for both measures.
The distinctions matter: this is a definition of high-growth enterprises, often used in discussions of scale-ups; it measures average annualised growth over three years, and does not require both revenue and headcount to increase. More recent Eurostat methodology uses a threshold above 10% for its employment-based high-growth measure.
The revenue-based definition can already accommodate a company growing with a small team. What AI challenges is our habit of treating hiring as evidence of progress. A company that doubles revenue while keeping its team the same size may be scaling exceptionally well.
For me, that shifts the investor conversation towards the quality of growth. Revenue per employee is useful, but so are retention, gross margins after inference and delivery costs, and how much human intervention each additional customer requires. A small team can still be running an expensive, labour-intensive business behind the scenes.
For Israel, this creates both opportunity and tension. More small teams could build significant global businesses. Yet the economic success of those businesses may create fewer direct jobs than previous generations of software companies. We need to distinguish company productivity from the broader challenge of creating opportunity across the economy.
When software becomes easier to build, what remains defensible?
Listening to HiBob’s founder and Wiz’s CPO and co-founder, one theme I took away was the importance of becoming a system of record: the trusted place where an organisation maintains essential business information.
I understand the appeal of that argument. As AI makes software faster and cheaper to produce, a feature becomes easier to imitate. Replacing a system that holds authoritative records, permissions, history and deeply embedded workflows is a much bigger undertaking.
I would hesitate to call it the only moat. Distribution, trust, network effects and differentiated access to data can also matter. But a system of record can combine several advantages: the customer trusts the information, other tools depend on it, and replacing it requires operational change.
Even then, storing data is insufficient. If another product becomes the interface through which customers make decisions and complete their work, the underlying system risks losing some of its influence and pricing power.
My VC takeaway is that founders need to understand where they can build a lasting relationship with the customer. Becoming the authoritative record is one route. Owning a critical workflow, with the context and permissions to complete it reliably, may be another. Either requires a deeper role in the customer’s business than providing a convenient feature.
Juniors may bring an advantage we are overlooking
Another point from the discussion challenged the assumption that AI makes junior hiring less attractive. People entering the workforce have less attachment to how things used to be done. They can learn to work with AI agents from the beginning, without first having to unlearn established habits.
That is a compelling hiring hypothesis. Someone with less experience may be more willing to redesign a task around the tools available today. Experienced colleagues bring the judgement to recognise when the output is wrong, understand the consequences and set the right standards.
The opportunity is to combine those strengths. Give juniors meaningful responsibility, access to AI tools and strong mentorship. Evaluate the quality of their work and how quickly they learn. That still requires investment from managers, especially when AI can produce convincing mistakes.
For Israel, this also matters beyond any individual company. The juniors hired and trained today become the senior engineers, managers and founders of the next decade. An ecosystem that stops developing them weakens its own future.
The organisation has to change too
A final takeaway from the day was that adopting AI requires changes to how organisations work. Buying tools is the easy part. Capturing the value means reconsidering workflows, responsibilities, approvals and the way teams share information.
If an agent can prepare an analysis in minutes but the decision still waits two weeks for approval, the organisation has preserved much of the original bottleneck. The same applies when teams generate more code, content or sales outreach than anyone can usefully review or absorb.
For founders, I think this means measuring the whole process: how long it takes to resolve a customer problem, ship a reliable improvement or complete a transaction. Then redesign the work around the result, with clear accountability and appropriate checks.
This is where Israeli startups have an opening. Small teams can establish these practices early, while larger organisations have more existing systems and habits to change. The advantage will belong to teams that turn faster execution into better products, stronger customer relationships and sustainable economics.
Where I see opportunities for Israeli founders
The following are investment hypotheses prompted by the slides, rather than forecasts established by the research.
1. AI that takes responsibility for valuable work
There is room to build products that complete a defined workflow: resolving a technical problem, processing an operational exception or helping a business convert demand into revenue.
The opportunity becomes more compelling when the product connects to the customer’s systems, handles the difficult cases and produces a result that can be checked. Deep technical knowledge can become a commercial advantage when it makes a costly task materially easier.
Founders should establish who owns the budget, what successful completion means and how much human work remains behind the product. Those answers determine whether a promising demo can become a scalable business.
2. Consumer AI, creative tools and gaming
From Remagine Ventures’ perspective, I am particularly interested in how AI changes the way people spend their time and money.
That includes tools that help creators produce and distribute work, products that help consumers discover and buy, and gaming experiences that become more responsive or personalised. Smaller teams may be able to test products and reach international users earlier.
The difficult part is earning repeated use. Founders need to understand why users return, how they discover the product and whether the economics improve as usage grows. A product that attracts curiosity needs a path to becoming a habit or solving a recurring problem.
3. Turning technical expertise into commercial products
The Innovation Authority’s companies chapter records an increasing share of new company formation in defence and space, alongside quantum and infrastructure. This points to a broader range of technical starting points for company building.
I see potential where specialist expertise can address a recurring commercial need: industrial monitoring, physical security, robotics or the analysis of complex engineering systems.
The test is whether a team can turn that expertise into a repeatable product. Procurement, deployment, regulation and support need to be considered early. A successful pilot becomes much more valuable when the next customer can buy substantially the same product.
4. Helping smaller companies operate globally
The scale-up problem is also a market opportunity. Smaller teams still need to manage customers, coordinate operations, understand performance and expand across borders.
Software that makes these activities easier could help more businesses reach global markets. A strong starting point is a specific customer group with an expensive recurring problem and a clear route to reaching similar buyers.
For founders building these products, distribution deserves attention from day one. Knowing exactly how to reach the next hundred customers can be as valuable as another product feature.
The ecosystem has work to do
The presentation’s framework brings together founders and managers, industry, capital and academia. That is a useful reminder that scaling depends on capabilities spread across the ecosystem.
Universities can connect technical education with commercial practice. Established companies can become customers and training grounds for future operators. Investors can help recruit managers, open customer relationships and support sensible financing decisions.
There are already signs of maturity. The Innovation Authority reports that Israeli companies acquired 81 foreign companies in 2025, while other Israeli companies bought 49% of the Israeli companies sold that year. Acquisitions can give growing businesses access to customers, products and capabilities they would otherwise take years to build.
Yet a strong growth-stage market also needs a healthy pipeline of new companies. The same report records just 301 funding rounds of up to $10 million in 2025, the lowest number in a decade. Bigger headline funding totals can coexist with a tougher environment for emerging teams.
That is one reason I continue to believe in a diverse early-stage funding market. Small funds, angels and specialist investors can support founders whose opportunities are still too early or unfamiliar for larger pools of capital.
Acquisitions also remain an essential part of a healthy ecosystem. They reward founders and employees, return capital and help create the next generation of companies. More founders should have a credible choice to continue building when the market and the business justify it.
Israel’s next chapter will depend on making that choice more achievable: helping founders reach customers, develop leaders and build durable businesses, while making Israel a place where they want to keep investing their talent.
AI may change how many people it takes to build a global company. The quality of the people, institutions and networks around that company will still shape how far it can go.
One last thing
I’m writing this on the evening before the Israeli elections. As someone who lives abroad and invests in Israeli founders, I care deeply about the future they are building and the country my children will know. The conversations today were about growing companies, but they also brought me back to the conditions that make people want to build their lives here: strong democratic institutions, predictable policy, excellent education and confidence in the future. I remain optimistic about Israeli talent and ambition. Tomorrow, we each have a chance to help shape the conditions in which they can flourish. If you’re eligible to vote, please go out and do it. The future we’ve been discussing deserves your voice.
He is a former General Partner at Google Ventures (GV) in Europe, former head of Google for Entrepreneurs in Europe, and founding head of Campus London, Google's first startup hub. Eze writes on Israeli tech, venture capital, artificial intelligence, and founder strategy.
He is also the founder of Techbikers, a nonprofit that brings together the startup ecosystem on cycling challenges in support of Room to Read.
- From Startup Nation to Scale-up Nation: Israel’s Next Growth Challenge - October 26, 2026
- Weekly Firgun Newsletter – October 23 2026 - October 23, 2026
- Venture Capital in the age of Consensus - October 21, 2026
Sources
- 1. ScaleUp Nation Podcast
- 2. Israel Innovation Authority: Israeli High-Tech Report 2026
- 3. Eurostat–OECD Manual on Business Demography Statistics
- 4. Globes: Interview with Israel Innovation Authority Chairman Alon Stopel
- 5. Startup Nation Central: Survey on the Economic Impact of Israel’s Judicial Reform, July 2023
