Summary:
Jeff Horing of Insight Partners emphasizes that Israel's future tech success hinges on applying technology to real business problems, not just inventing it
The shift from quick exits to building global, independent companies marks a new era in Israeli entrepreneurship
Israeli startups often lack proximity to large corporate users, creating a gap in understanding real commercial challenges
Horing highlights gross retention as a critical metric, advising startups to aim for at least 90% to ensure long-term success
Insight Partners plans to help bridge the gap by connecting Israeli founders with unsolved business problems in the U.S. market
AI is viewed as a force multiplier for software, not a replacement, with potential to be five times larger than the cloud revolution
The Shift in Israeli Entrepreneurship
Jeff Horing, Co-Founder and Managing Director of global venture capital firm Insight Partners, has invested in over 250 companies worldwide and more than 150 in Israel, including success stories like Monday.com, Wix, JFrog, and Wiz. With Insight Partners now the largest investor in Israeli high-tech, Horing warns that Israel’s next wave of innovation success depends less on inventing new technology and more on understanding how to apply it.
“Israel has historically had a phenomenal pipeline. But it looks different today, and not necessarily in a good way. Applying technology is a little harder for Israeli companies to think about,” Horing said during a fireside chat with Startup Nation Central CEO Avi Hasson at the MNC Summit 2025 in Tel Aviv.
Avi Hasson and Jeff Horing (Photo: Guy Hamoi)
From Quick Exits to Building Global Companies
In the early 2000s, founders and investors often clashed over control and direction. “We could fight for weeks about who to hire,” Horing recalled. “It was just a different approach, a bit more confrontational.”
Today, that tension has largely given way to partnership. Founders are more collaborative and ambitious, aiming to build global, independent companies rather than sell early.
“The first generation of entrepreneurship in Israel was about quick exits,” he said. “But around 2010, founders started saying, ‘No, I’m going to run for the gold.’ That created a very different type of exit environment.”
The Gap in Applying Technology
“A lot of you are phenomenal inventors of new technology or pushing the envelope on new technology,” Horing said. “In the area of cyber, it was second nature to you to think about the application of cyber in the real world.”
However, he continued, what Israel’s startups often lack is proximity to large-scale corporate users, like those found in the U.S. or Europe, creating a gap that limits understanding of real commercial challenges. “Israel has historically not had as tight a link to practitioners as other markets,” Horing said.
Thus, he continued, “You have to work doubly hard to make sure you get yourselves out there to understand what real-world problems look like. Because if you all try to solve the same intuitive problem, there’ll be a lot of ‘me-too’ business plans.”
“The value,” he added, “is understanding how to apply technology to a business problem.”
Insight Partners’ Role in Bridging the Gap
That gap is one that Insight Partners now hopes to help close. “We’ll have some answers maybe in the next two months to think about how we can help the ecosystem here get closer to some of the problems that we see in the U.S. that are unsolved,” Horing revealed. “I’d love to help move a little bit more aggressively how founders think about business problems that are really sticky and transformative for big companies.”
The Importance of Gross Retention
Horing noted that the companies most likely to thrive will be those that truly understand their customers, highlighting a metric he believes is undervalued by most Israeli startups: gross retention. “How much of your business is predictable from year to year from your existing customers, versus how much do we have to do in terms of getting new customers,” he explained.
“If anybody’s out there starting a business, and that number is less than 90%, I would rethink what you’re doing,” he said. “It may not be felt today. It will be felt in the future.”
AI as a Force Multiplier, Not a Successor
When the discussion turned to whether software risks becoming a commodity amid the rise of chips, hardware, and other deep-tech fields, Horing refuted the claim. “We’re not too concerned about software losing its magic,” he said.
Ultimately, Horing conceptualizes the AI revolution as an extension of software: a force multiplier rather than its successor. “AI is a form of software,” he said. “AI is just a phenomenal tool to solve new business problems. It could be five times the size of what cloud was, which was five times the size of what client-server was.”
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