From Layoffs to Startups: Israeli Tech Workers Embrace Entrepreneurship via AI
Laid-off Israeli tech workers are turning job hunts into startup launches, empowered by AI tools and industry experience amid widespread high-tech sector layoffs.
The recent wave of layoffs in Israel's high-tech sector has forced numerous developers and tech workers into prolonged job hunts. Amid this economic reality and the rapid rise of artificial intelligence tools that accelerate the creation of minimal viable products, a notable trend has emerged: many laid-off programmers are turning misfortune into opportunity by launching their own startups. These advanced tools make the path to entrepreneurship more accessible than ever, though it remains fraught with risk.
Tamir Elazar, 30, was laid off from Ben-Gurion University after the department where he worked at the university's entrepreneurship center was downsized and closed amid industry-wide tech layoffs. Before that, he founded several businesses in real estate and food, spent several years selling medical equipment, and studied biotechnology engineering at Ben-Gurion University. At the entrepreneurship center, he managed the international department, which worked on selling the establishment of entrepreneurship centers to other universities worldwide.
Last February, Elazar founded Zelli (operating at zelliapp.com) alongside Yaakov Sander, also 30, his military service comrade from the Paratroopers Brigade. The company develops a platform in the home services sector reminiscent of Uber's model: before a technician departs, the customer receives a customized, final price. According to Elazar, the system utilizes the home address to scan several thousand data points, identify existing home systems, and predict repair costs.
Zelli currently operates exclusively in the United States across two states. Alongside the two co-founders, the company employs two staff members in Ukraine. According to Elazar, Zelli currently counts two B2B clients—property managers overseeing approximately 100 apartments each—and over 50,000 interface visits. The business model relies on a 15% commission on every job executed through the platform using freelance contractors. He emphasizes that, unlike competitors, the company delivers finalized work rather than mere leads, with all tasks backed by Zelli's warranty.
Shaked Ashkenazi, known as Shkudo, 26, arrived at a similar crossroads from a different angle. He served as an information security researcher in the Defense Division and Unit 8200 for about seven years, and following his discharge, worked at Starkware as a blockchain security researcher. After a year, Starkware cut about 30% of its workforce due to economic constraints, and Shkudo was among those let go, despite what he describes as strong performance and dedication recognized by management.
Since his layoff, Shkudo began independently developing a project utilizing AI to detect cryptographic security vulnerabilities, currently operating as a sole founder. Initially, he intended to use the tool himself to report vulnerabilities and earn freelance bounties, but following the tool's success and recognition of its commercial value, he pivoted toward building a startup: a service that detects vulnerabilities before code reaches production.
"I always loved building things from scratch, but I planned to do it within an existing company in the coming years, not launch an actual startup," Shkudo said. "The layoff lit a bit of a fire under me in that regard—I can always be an employee, this is the time to try. When I was laid off, plenty of recruiters reached out so I just went with the flow for a bit, but I quickly booked a flight to Portugal with my sister and realized there I am not coming back to Israel to hunt for a job, I am coming back to work on something of my own."
The AI Factor and Lowered Barriers
"In the era of AI, it is much easier to build products thanks to new tools," says Gilad Hazan, a Unit 8200 alumnus, tech entrepreneur since 2014, owner of the technology consulting firm Ghgroup, and leader of early-stage entrepreneur programs involving industry executives. Unlike the past, building a minimum viable product no longer requires raising initial capital. Nonetheless, Hazan stresses that the core fundamentals remain unchanged: founders must solve a real problem, validate the market, and deliver value customers are willing to pay for.
According to Hazan, previously required hundreds of thousands of dollars on average to reach an MVP. Motivation and hunger for success are mandatory attributes for any entrepreneur, regardless of whether they were laid off or embarked on an independent path by choice, Hazan added. Those who identify this inner flame possess the foundational base required to embark on this complex journey.
"I estimate we will see more and more entrepreneurs in the coming years, partly thanks to the AI era, which allows people to establish and develop ideas much more easily than before," Hazan concludes. Furthermore, social networks have made knowledge accessible and available to almost anyone, enabling beginners to secure a foundational base, learn from experienced peers, absorb new concepts, and rapidly acquire tools. The combination of high knowledge accessibility and new AI capabilities lowers entry barriers to entrepreneurship, empowering more individuals to attempt launching their own ventures.
Venture Capital Perspective
This phenomenon is clearly recognized within venture capital funds as well. Recently, we have been meeting more programmers who lost their jobs and chose not to continue searching for their next corporate position, but instead opted to launch independent startups, says Emanuella (Emma) Lipski, a partner at 10D venture capital fund. For some, the layoff transformed from a crisis point into an opportunity to test an idea they harbored for a long time, turning their accumulated industry knowledge and experience into a new product or company.
The rapid evolution of AI tools significantly alters the cost and speed with which products can be built. Today, initial products can sometimes be constructed by a single person or a very small team leveraging AI tools throughout the development process, making startup creation a tangible reality for laid-off developers.
According to Lipski, field-experienced entrepreneurs possess a built-in advantage alongside formidable challenges: many individuals entering this path bring profound industry familiarity, understanding the tech world and the precise problems it aims to solve. After years in the industry, they have been exposed to corporate needs, operational workflows, and customer pain points, meaning layoffs often grant them the time and freedom to construct targeted solutions for issues they know intimately.
However, the relative ease of building an MVP today does not guarantee a successful enterprise. The primary challenge frequently shifts from the technological sphere to the business domain—such as customer acquisition, authentic problem identification, demand generation, and securing capital or revenue. Yet for technology professionals already possessing development capabilities and professional experience, the initial barrier to company creation has dropped significantly, rendering the transition from a job hunt into an entrepreneurial endeavor increasingly relevant.
