There’s been no shortage of debate and discussion about how to replicate the Silicon Valley startup ecosystem (or whether it’s even possible, worthwhile or applicable to other places). I wrote about it way back when in 2007 and certainly a lot has changed and improved in a few years. But when you read a book such as Start-up Nation: The Story of Israel’s Economic Miracle you realize just how far so many places have to go.

Start-up Nation: The Story of Israel’s Economic Miracle is a book about Israel’s brief, violent and incredible history. It goes through a number of interesting and amazing stories of Israeli entrepreneurs, who essentially built a country surrounded by enemies. It’s a fun, interesting read, but not really about specific lessons that you can learn and apply immediately to your own startup endeavors. It does make you go “Hmmm…”

Since reading the book I’ve been thinking about it a lot and how the Israeli startup experience can be applied to other places, including my hometown, Montreal, Quebec. Truthfully, I don’t think you can apply all the lessons and experiences from Israel, simply because what they experienced is so different from other places. Canada, as an example, was not born out of war. We’re not in a constant state of threat, and therefore can afford to be lazy, slower moving and not as intense (although I don’t think we can afford those things, but we do.)

Still, there are some interesting ideas in the book that I do think can apply and should be talked about a lot more for Montreal and many other small but growing startup ecosystems.

1. You need chutzpah. If you don’t know what “chutzpah” is, look it up. Suffice it to say, as I was reading the book I kept thinking, “Where is Canada’s chutzpah?” Turns out we might have just captured some of that after winning a Gold medal against the US in Olympic hockey. Startups need chutzpah, lots and lots of it.
2. Failure is inevitable. A lot of people talk about failure in startups, but it turns out that a lot of that is nothing but talk. In many places, Canada included, failure is still failure. A black mark. In Israel they genuinely tackle failure differently.
3. Tout the exits. The entrepreneurs that exit in Israel are considered national heroes, the stories become legendary. Canada needs more exits, and it needs to tout those that its had. Those referenced in the book are huge, but I still think Canada could do a lot to promote even the smaller exits we’ve seen.
4. Keep the entrepreneurs. Israel does a good job of keeping people, although they do struggle with brain drain. Canada doesn’t do as good a job of keeping its successful entrepreneurs. Some of them come back, but not many.
5. Mature students are more successful. One of the biggest differences in Israel is the fact that nearly everyone spends at least 2 years in the army. While in the army they learn a ton of critical skills. Most importantly, they’re maturing – fast. By the time a 22-year old leaves the army, he or she has experienced something that no Canadian will even come close to understanding. Somehow Canada needs to find ways of providing students with more opportunities – and crappy internships at large companies doesn’t count. Students need to be thrown into incredibly intense and meaningful internships and roles. They need real responsibility with real consequences.
6. Focus beyond your borders. Because Israel is so tiny and surrounded by enemies, it’s forced to look far beyond its borders for success. That means exporting a lot. It also means having a unique worldview. Too few Canadians look beyond their borders to seek out opportunity, learn what’s going on, etc. Reading a couple blogs like TechCrunch and Mashable doesn’t count (although it doesn’t hurt either!) More entrepreneurs need to be networking past their city limits, and need to recognize how much competition is out there. Smaller startup ecosystems have to work extra hard to be on top of everything that’s going on, and need to get their fingers into every pie.

   I’d like to see more valuable partnerships with US and Israeli-based entrepreneurs and investors. There should be Silicon Valley and Israeli bootcamps and/or exchange programs. I haven’t thought through all the mechanics, but we need to be out there. We need to go out, learn, steal, connect … and then come back to our home base.

I would encourage you to read Start-up Nation: The Story of Israel’s Economic Miracle – there’s a very good chance you’ll find some lessons, examples and ideas in there that will help you and your startup … regardless of where you’re located.

Every so often I read a blog post and say, “I wish I had written that!” That was absolutely the case with Mark Suster’s post, The Fallacy of Channels: Startups Beware. Mark hits the nail right on the head with respect to the risk (and usually the abject failure) for startups using a channel partner strategy.

Most people would expect a channel partner strategy to be fairly simple: You find partners who then go out and sell your stuff. In principal it sounds great for startups because most startups don’t have a real sales force. Channel partners are a sales force in a box! Ready to go, experienced and hungry to sell. Right? Right? Well…

To expand on Mark’s points regarding the risks of a channel partner strategy, here are two major issues I’ve experienced:

1. Lack of control. At the end of the day you’re handing responsibility over to someone else to sell your product. And as much as you can get reporting on sales activity, prospect pipelines, momentum, etc. you’re probably not in there closing the actual deals. Mark makes the critical point that in fact you should be doing the sales, but even still, you are giving up significant control of your sales efforts, learning and pipeline through channel partners. You should be very concerned about this. Your investors will likely be concerned as well. If they come to you and ask for a sales forecast but you can’t really give them one because it’s buried in your channel partners bureaucracy, you’re fucked. The lack of learning is a huge risk: If you don’t really know what’s going on inside the channels, you can’t really improve your own direct sales strategy or make significant changes within the channels.
2. The investment is very high. You can’t expect any channel to take your stuff and just sell it. Nothing is that easy. They’ll need training, sales materials, motivation and a lot more. Mark makes a very good point regarding the motivation of channel salespeople – frankly, it probably won’t exist at all. They just won’t want to sell your stuff. They make less on it, they don’t know it as well and it’s just one more thing they have to deal with. In my experience, setting up channel partners took 2-5x as long as expected, and even still there was considerable ramp-up and ongoing maintenance. So the dollar and time investment are huge. And for most startups that can bury you if you don’t have a long enough runway and enough traction on your own.

Four recommendations I’d make:

1. Don’t go to the channels until you know what you’re doing. Channels are really not the right place for validating your business. And they’re not the right place to validate a sales strategy either. You should have a fairly well-oiled machine in terms of sales and marketing before you build out a channel strategy. That way you can provide a lot more cohesive and precise knowledge to the channel. You’ve been selling your product, it’s working and you know what to expect. Now you can use channels to blow that out to a greater capacity.
2. Look for other adoption / sales models. Before going to channels as a sales strategy, look at other evolving enterprise sales and adoption models for your product. This should be done very early on in the customer development and validation process. For example, can you get users and sales from the bottom-up in an enterprise versus going top-down?
3. Assess past channel success. When looking at potential channel partners, make sure you do your own due diligence. Find out if they’ve successfully sold partner products in the past. Find out how they’ve done it. Talk to those other partners and find out how well the channels operated, how long things took, what costs were involved, etc. Remember: It’s your ass on the line if the channel fails, the channel partner is probably much bigger, selling tons of other stuff and can drop you in a blink of an eye. Your time, investment, effort and strategy will just go down the drain. So do your homework.
4. Get widespread acceptance within the channel. I’ve had experience in the past where management was excited to partner, but as it went down to others within the organization, we ran into roadblocks. And management didn’t have the fortitude (and/or interest) to really institute change. So you might negotiate a sweetheart deal with management only to find out that the people who will be selling your product, or implementing it with customers are less interested. You need to get widespread and detailed acceptance from all levels of an organization before you jump into a channel partner relationship.

Channels carry huge potential. And Mark is right – very often a channel partner is an inevitable acquirer. You want to get into bed with these guys. And the potential looks so great. But I’d say there are more “gotchas!” in the channel partner experience than “hoorays!” and there’s huge risk for startups that focus on channel partnerships too early in the game.

One of the big roadblocks that first-time entrepreneurs face is the issue of raising capital. There are no easy answers. But one thing is certain, the only person that can raise financing for your startup is you.

There are enough high quality resources out there on raising venture capital and angel investment. And there are some fairly well-accepted best practices on how to raise capital as well. You’ll have to do your research.

There are plenty of fairly easy ways to get connected to venture and angel investors too. That means more research and legwork.

There are probably people in your network that have done it before and can provide advice. If you need help, you have to ask for it.

If you’re waiting for an existing investor or partner of some kind to do the work for you, you’ll be waiting a long time. It’s most likely not going to happen. And unless you’re prepared and reasonably well-organized, your friends, colleagues, existing investors, partners, etc. will be hesitant to open up their rolodexes for you, because they’re putting their reputations on the line.

Note: Please be wary of consultants that are going to help you raise money for a fee (upfront or for success). This is a scary, seedy, dangerous arena. You can learn more at Jason Calacanis’ Open Angel Forum.

Raising venture capital is not something that most of us have experience in when we first become entrepreneurs. And when you first start a company the only way to get experience is do your research, learn as much as you can, prepare the documentation & pitch, and get to it. There’s no excuse for not jumping in and figuring it out.