Patents poses big challenge for entrepreneurs

Although an increasing numbers of women are becoming involved with entrepreneurial activities, they are less inclined than men to take risks, says Hazaz.

Kfir Hazaz 88 224 (photo credit: Courtesy)
Kfir Hazaz 88 224
(photo credit: Courtesy)
In their quest to conquer the market, most Israeli entrepreneurs won't get past the attempt to secure a patent for their ideas, according to a report released this week by the YM Business Opportunities company. YM, which offers a range of services for budding entrepreneurs, said 78 percent of those seeking to create new products and technologies in 2007 had bailed out of their attempts at the stage of searching for patents. The survey was based on figures gathered on hundreds of entrepreneurs over the past four years, the company said. Some entrepreneurs spend "hundreds of thousands of dollars on patents, leaving no money for anything else," YM CEO Kfir Hazaz told The Jerusalem Post. According to YM's survey, some 64% of entrepreneurial efforts fail at the business-development stage, a dangerous phase in the process since it tempts entrepreneurs to use up their capital. Using its clients as a sample, YM created a model of a typical Israeli entrepreneur: Male (90%), aged between 25 and 30 (70%), and seeking to introduce improvements to products that already exist in some form on the market (64%). Based on the report, Hazaz said although increasing numbers of women were becoming involved with entrepreneurial activities, they are still less inclined than men to take risks. Some 35% of entrepreneurs were active in the hi-tech and Internet areas, while 43% will have experience or knowledge on their targeted market sector, the survey said. On the investor side of things, YM's report said 60% of investors were interested in becoming involved with hi-tech projects, while 70% were prepared to invest more than NIS 100,000 in new ideas. Once a start-up does take off, Hazaz said, one of the most problematic aspects of the Israeli entrepreneurial mind-set was the tendency to sell the business at an early stage for vast sums, or to make a "quick exit." "Part of the perception in Israel is that it's harder to set up the start-up than to sell it," he said. "I think that's wrong. It's best not to aim for a quick exit, but to set up the initiative, and if an offer comes down the line, it should be examined then." "The knowledge should be kept in Israel," he added. Entrepreneurship in Israel will continue to grow, Hazaz stressed.