Business skills are as important as STEM: Zerto CEO

Ziv Kedem, CEO of Zerto, says that understanding both the business and technology side of a startup is key to a successful venture.

When it comes to building a successful startup, entrepreneurs need to understand both the technology and go to market side of their business, according to Ziv Kedem, CEO and co-founder of virtualisation and cloud protection startup Zerto.

Currently based in both the United States and Israel, Kedem has put in the hard time in Israel's startup scene. He believes having a large talent pool of budding entrepreneurs that have studied science, technology, engineering, and mathematics (STEM) is only half of the solution.

When it comes to Israel, Kedem said that understanding the business side of a venture is only something that is now starting to become prevalent, with the masses historically starting a company without intrinsic business skills.

"People have only started to realise they need business skills, coming in purely from a technology background," he said. "You need to think about go-to market as early as you think about your product."

Kedem believes there needs to be a healthy balance of both STEM and business skills.

"I for one think that if you build the right thing with the right business aspects off that, then add enough of the technology aspect, it will create a very good mix. It doesn't matter which one, where's the chicken, where's the egg -- that's not important," he said.

"I think that by having a lot of business-focused people, if you have these skills in these companies early on, then that actually can create a very good foundation. Of course that has to be coupled with the right technology."

In Israel, Kedem said there is also too much emphasis put on building a company to sell, rather than focusing on building a company to last.

"I think that in Israel that is why a lot of companies get acquired instead of really being built to last, because they have a great technology but don't know how to take it to market," he said.

"Most of the successful companies that were built in the early 2000s were acquired -- almost none of them remain independent."

Kedem does understand, however, the allure of selling a successful business to one of the giants can sometimes be too hard to pass up. In 2006, disaster-recovery startup Kashya -- Kedem and his brother's previous entrepreneurial venture -- was sold to EMC for $150 million.

"I think that it could be very interesting to see Australia develop into another one of these tech regions," Kedem said. "It took Israel 20 years to move from building companies to be sold to building companies to last -- and that's only just starting now."

Innovation in Australia and looking overseas for guidance has been a hot topic in Australian politics for months, with Prime Minister Malcolm Turnbull unveiling his AU$1.1 billion National Innovation and Science Agenda in December.

Part of that agenda was the establishment of a AU$11 million startup landing pad initiative, designed to help Australian entrepreneurs bring their ideas to market, and build high-growth and high-return enterprises.

The government expects the five landing pads that form this initiative to accelerate Australia's access to international business networks, entrepreneurial talent, business development, and investors by creating a unique ecosystem for innovation to thrive.

The first pad has kicked off in Silicon Valley at RocketSpace, the second space will be in Tel Aviv, and the third is pencilled in for Shanghai. The remaining two are expected to be positioned in Europe and in another capital city in Asia.

"I'm sure [Australia] is going to be different, also Israel is very different from Silicon Valley. I think that there are things to learn from everyone," Kedem said.

"I think that it's the right thing Australia is doing, looking outside to see where you can take some of the things. There's no way that the Australian startup culture is going to be like the Israeli one, or like Silicon Valley.

"It could be better, it could be worse, but it's definitely going to be different because it's different people, different ways of doing things."

Previously, however, Assistant Minister for Innovation Wyatt Roy said Australia is yet to have the networking density that Silicon Valley or Tel Aviv has.

On a recent visit to Tel Aviv, the 25-year-old assistant minister said there was a strong cultural element in Israeli innovation that Australia can learn from, calling Israel the global golden standard when it comes to innovation.

"I've often said that we need to embrace the best elements of our culture -- that aspirational mindset, that 'have a go' mentality -- and support the underdog," Roy said at the time.

"Here in Israel, it's very much evident in every element of their society they embrace that Hebrew word, 'chutzpah', where they go out and they are prepared to take on an enormous amount of risk to have a go -- and they're not afraid of failure."

According to Kedem, risk is very much ingrained in Israel's startup culture.

"In Israel, in the US, you can [start another business] the next day. It's all about risk. If we take money from venture capitals they expect a five times return on the successful companies. If they had a five times return from all companies they'd be printing money," he said. "They expect you to take risk, so why would you be penalised for taking them?"

As part of Australia's innovation agenda, the government also relaxed the bankruptcy default from three years to one. To Kedem, waiting on a government-defined time frame before starting the next venture is quite foreign.

"Why would that be the government's business? In Israel, having a failed startup -- you don't even call that bankruptcy," Kedem said.

"Twelve months isn't actually that different from zero anyway. By the time you start the brainstorming to the time you actually start the company, it takes not much less than 12 months anyway."

He believes the best thing to do with a failed startup is to walk away instead of sink more money into it and watch it crash.