Breaking into the US Market: The Toughest Hurdle for Israeli Startups

Entering the U.S. market is often seen as the ultimate milestone for Israeli startups. With one of the world’s most dynamic tech ecosystems, Israel constantly breeds innovation—but crossing the Atlantic comes with serious challenges. From hiring missteps and misaligned product-market fit to learning the nuances of American business culture, the transition isn’t just a geographical one; it’s a mindset shift.

In a compelling discussion hosted by Calcalist and Poalim Tech under the Growth+ project, Michael Reitblat, founder and CEO of Forter, sat down with Assaf Frayman, CEO of Octi, to discuss the hard truths of global expansion, storytelling, and navigating uncertainty in entrepreneurship. Their exchange offers a raw, insightful look at what it really takes to scale from Tel Aviv to New York.

Scaling Beyond Borders: Lessons from Israeli Founders in the U.S.

Michael Reitblat, a seasoned entrepreneur who built Forter into a U.S.-based cybersecurity powerhouse, highlighted a core challenge: transitioning from the Israeli startup scene to the much larger and more complex American enterprise market.

Reitblat pointed out that Israeli companies often fail not because of poor products, but due to their approach. Hiring the wrong U.S. sales team, misunderstanding the customer’s real pain points, or pushing solutions that don’t fit the buyer’s needs are common traps. “People buy from people,” he stressed. Humanizing the B2B sales process and understanding individual customer motivations is essential.

Assaf Frayman, a healthtech founder navigating a highly regulated and unpredictable U.S. healthcare landscape, echoed similar frustrations but from a different angle. His biggest challenge wasn’t product—it was clarity amidst chaos. With shifting assumptions and evolving strategies, knowing when to pivot and when to stay the course was key. The flood of feedback can be paralyzing, and the real skill lies in filtering signal from noise.

Reitblat learned a lot about the scale of the U.S. healthcare sector through his conversation with Frayman. While he had personally used the system, it shocked him to realize the industry’s true size—it dwarfs even the global advertising market and could rank as the fourth largest economy globally if treated independently.

Storytelling emerged as a mutual theme. Frayman emphasized that it’s not just about solving a problem, but communicating the entire journey—from problem definition to founder background—with compelling clarity. If your pitch doesn’t make sense to an outsider, it probably won’t resonate with stakeholders either.

A particularly human moment came when the two discovered each other’s unconventional paths. Reitblat’s global living experience shaped his leadership, while Frayman’s background in medicine gave him a unique perspective in building a healthtech company—a rarity in Israeli entrepreneurship, though more common in the U.S.

Michal Kissos Hertzog of Poalim Tech summarized a recurring mistake: overbuilding before validation. Entrepreneurs should aim for lean, testable versions of their ideas. By simplifying the MVP and testing core assumptions first, they can avoid wasting time and resources on features nobody needs. The wisdom is clear—focus on early clarity, not complexity.

What Undercode Say: Deconstructing the Israeli-to-U.S. Startup Leap

The dialogue between Reitblat and Frayman offers a textbook case of the classic pitfalls and revelations awaiting Israeli startups chasing U.S. success. Here’s our breakdown of the structural and strategic layers behind their insights:

Cultural Dislocation: Israeli startups are often agile, informal, and product-centric. The U.S. market, particularly in enterprise and healthcare, demands a polished sales approach, longer decision cycles, and deep relationship-building. This cultural mismatch often leads to missteps unless founders adapt quickly.
Hiring Dynamics: The transition often fails due to rushed or misinformed hires. Sales leaders in the U.S. need more than charisma—they require sectoral insight and a connection to local buyer psychology. A brilliant Israeli product can flop with the wrong front-facing team.

3. Narrative Matters: Founders underestimate storytelling.

Healthcare Complexity: Frayman’s domain, healthtech, amplifies these challenges. Regulatory red tape, entrenched stakeholders, and long validation cycles mean you must not only understand medicine but also policy, insurance workflows, and patient behavior—something product-first mindsets often overlook.
Risk of Overbuilding: Israeli engineers often over-engineer MVPs, investing months of dev time before getting any user validation. The U.S. market favors fast validation, user traction, and adaptive iteration. This is where Michal Kissos Hertzog’s lean-first mantra resonates.
Noise vs. Feedback: Founders new to the U.S. are inundated with conflicting advice. The skill is learning what to ignore. Feedback from an investor may not reflect market demand, and peer success stories don’t always translate across sectors.
Mental Model Shifts: The hardest transition isn’t operational—it’s psychological. Israeli entrepreneurs must move from a high-context, innovation-driven ecosystem to a market-driven, ROI-focused mindset. The U.S. doesn’t just ask “what’s cool?” but “what works, for whom, and how much does it