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From Startup Nation to Tech Nation in the Middle East

Israel has created disruptive technologies across a broad spectrum of industries from Fintech to Artificial Intelligence to transportation and to medical marijuana
Illustrative photo of a laptop computer (Sophie Gordon/Flash90)
Illustrative photo of a laptop computer (Sophie Gordon/Flash90)

Israeli startup Mobileye just disrupted automotive technology with its autonomous driving and closed a $15.3B acquisition deal with the tech giant Intel, the largest Israel tech acquisition to date. This deal is hardly surprising.

Israel has created disruptive technologies across a broad spectrum of industries from Fintech to Artificial Intelligence to transportation and navigation innovations to medical marijuana enterprise.

The name “Israel” might have been once weighted in politics, religion, and antiquated images of cloth-wrapped shepherds dragging camels through the desert, however this image is long-gone. Israel has proven that it could not only be a game changer in the global tech startup scene, but it shows promise in withstanding the long haul in technology as large corporations like Google and Intel set up shop and swipe up Startup Nation’s innovations.

94 Israeli companies are listed on Nasdaq at present. That’s more companies listed on Nasdaq than any other country, barring the United States and China–despite Israel’s meager size in comparison. Additionally, Israel has been said to attract more venture capital and more startups per capita than the rest of the world, raising $4.8 billion dollars in funding last year. 85% of the funding is from international investors.

It is safe to say that the world is interested.

So how is Israel such a tech powerhouse?

It all boils down to revolutionary risk-takers who are willing to start from nothing and do whatever it takes to build up and succeed.

How did the Startup Nation begin?
From the beginning, our visionary of the state Theodore Herzl offered a Darwinian explanation that the Jewish diaspora remained strong in their “struggle for survival” as he detailed a business plan for the “Jewish Company” modeled after land acquisition entities. He conceptualized a society that would be a lucrative business venture, not just a utopia for the Jews. Everything was there from trade procedures to workers rights.

Shortly thereafter, Mandatory Palestine filled with Jews who strove to succeed in the land of their biblical ancestors. So began the emergence of the startup mindset.

We could point to the history and lore of the Tower and Stockade campaign in Mandatory Palestine to the origins of our startup mentality. Leaving politics aside, the law basically stated if someone built a tower and a fence, they could claim the land and the British Mandate would not destroy it. As the story goes, the settlers scrambled to erect their towers and fences with whatever materials they had available for them in the wee hours of the night–or even day. They had to be creative and work fast. So they cobbled together shoddy structures at record speeds in their fervent drive to recreate themselves.These prototype developments set the foundation for beautiful collective communities (moshavim & kibbutzim) and cities to come.

These were our first startups.

Israel is a nation of adaptable Immigrants
From the get go, the developing nation attracted gutsy visionaries to the new land. Now Israelis can come across as downright anarchists. They are full of chutzpah and NO is the first point of negotiation.

It probably has something to do with building a nation with immigrants. Immigrants know better than anyone the value of adaptability.It takes courage and untempered passion to completely exchange everything you have ever known for a foreign land.

Many have had to drop their old careers and adapt to the needs of their new environment. If they are willing to learn new skills, chances are, they will succeed. I for one had to completely take stock of my skills when I arrived and make drastic changes in my career in order to meet the demands of my new environment. This adaptability has helped me thrive. Meanwhile, I have watched friends struggle as they attached themselves to their old ways of living.

Those who thrive are the ones ready to adapt to their new environment, even if that means making major life changes. It’s a return of the Darwinian “adapt or perish” survival mode of Jews in exile. Those who adapt to changing environments survive.

These traits easily translates over to the demands and uncertainties of the startup ecosystem, whereupon one will have to start from a blank slate and acquire new skills to meet the constant change of demands.

Passion and the ability to learn supersedes specialized academic degrees and prior experience. The startup world is for people who are willing to try anything to succeed.

The Talmud invites a Creative Economy
It’s a well-known fact that Jews take the lead in Nobel Peace Prizes and have been pioneered advances in sciences and arts. Aside from the Darwinian “struggle for survival” mentality in the diaspora, we have gripped another secret weapon: the Talmud (and other Jewish learning practices). Traditional Jewish learning invites ingenuity as students explore the 2000 year old laws, ethics, rituals, psychological insights, and lore contained within the Tanach (the Torah, prophets, and writings) and the Talmud explains Judaic scholar Michael Kagan.

Kagan tells us that great scholars (sages) spend their entire lives learning and have the mental capacities to absorb and integrate huge amounts of material, making connections across the centuries, and extracting very deep understandings of the nature of God, the universe and the human being.

The style of Jewish learning is to ask questions, not only get answers. Chavrutas (Aramaic: companionship, learning partners), Yeshiva students, and other Jewish learners challenge each other to stretch their minds beyond their limits as they dissect the texts. Thus we have what Kagan calls a Holy Chutzpah culture of argumentative, analytical, imaginative, and probing people who make order out of chaos.

This carries over into the startups.

Employees debate with one another — even management with their understanding of the latest research and innovations like good Talmudists. Creative solutions to complex problems and the mutual desire to succeed trumps usual top-down hierarchies.

Interestingly, South Korea caught wind of the successes Israelis and sought answers.

Korean Ambassador to Israel Mr. Young Sam Ma concluded that the key was Talmudic study. He advocated (among others) to implement the Talmud into education, despite the lack of interest in converting. They merely want to adopt the learning style.

Thus now the Talmud has been hailed as the number one bestseller in Korea. Each South Korean family has at least one Talmud in their home.

To them, this holds fundamental keys to success in business.

Former Ambassador of the Republic of Korea to Israel H.E. Ilsoo Kim and Industrial Attache Mr. Youngtae Kim scribed a book that translates to The Talmud Creative Economy. It hails the achievements of the startup nation as it compares the mentality of Korea to Israel.

Il-Soo advocates the future creative economy that piggy-backs off of Israel’s guidance.

Now Israel and Korea are developing mutually beneficial partnerships and Forbes has pinned Korea as the next startup nation.

Learning together chavruta style and questioning every challenge together opens the doors for success.

Israel has had invaluable mentorship

Before Israel started mentoring other nations, they got mentorship and support from abroad. No one can deny that part of this success has come from external support. The early Zionists might have obstinately rejected local farming practices in favor of their own innovative land revival techniques, but Israel’s accepted invaluable mentorship when it came to modern technology. Mellanox CEO Eyal Waldman explained that the mentorship in the 90’s from Silicon Valley paved the future of technology in Israel at his co-sponsored event with Asal Technologies on July 12, 2017.

When Israelis were ready, they took off their training wheels. Henceforth, the startup scene in Israel exploded. The countless investments from abroad has not hurt either.

The Mellanox team now advocates a pay-it-forward model to entrepreneurship–even if that means challenging the politics of the nation.

Mentorship is the key to success for everyone, no matter where they are in the game. Mentors can refresh their knowledge when they teach. And mentees can build their skills to become future leaders.

It is a win-win for everyone.

Collective Societies work together
Of course, these successes are rarely an individual endeavor. It takes the support of a community to go forward.

I often meet Israelis who tried to immigrate abroad for the hope of better economic security and they returned less than 5 years later because of loneliness. They report that they missed their friends and family and the general warmth of Israeli society that just can’t be replaced. Go to the beach or pub, and you’ll quickly see how a party of two doubles and triples as the day or evening progresses. Take the bus and you’ll see people huddled in clusters even when the bus is virtually empty. For better or worse, we like to be together.
We need this collective mentality in startups. One person simply cannot do it all alone. The CEO needs to know when and how to ask for help. And his or her teammates need to be willing and able to help.

Maybe this is why coworking spaces are popping up like crazy in Israel and are becoming part of the norm for startups. Why work alone when you can pool resources from everyone around you?

I for one get much more work done in the collective environment than I do during my days of working from home, despite the ease of rolling out of bed and flipping open my laptop in my PJ’s. Seeing other people around me working energizes me. And I know my work is better when I poke my head over to my colleague’s seat and get his feedback.

Besides that, I don’t like eating alone. Moreover, the real conversations happen over lunch.

The Army is a Fertile Training Ground
Part of the collective mentality stems from the military. The Israeli Army offers ample opportunity for soldiers to develop skills, hone their creativity, and create contacts that last a lifetime.

Improvising is the norm, even if that means bending the rules and challenging authority.

Most importantly, it is a place where the ability and willingness to learn a new skills supersedes experience. The Army will train the youth and give them the place to apply their knowledge.

I know countless developers who got their start in tech in the Army. By the time they were released from their compulsory service, they had 2-3 years of experience in tech at minimum. Meanwhile, youth abroad were in college learning theory with no real life application. Education is important, but life experience trumps the text books.

Forbes estimates over 1000 companies that came out of Israel Defense Force’s once clandestine unit 8200. The unit trains youth with a high aptitude for analytical thinking, decision-making, and team-work as cyber intelligence analysts. It’s not surprising that Israel plays a dominant role cybersecurity globally, with the United States as its only superior for cyber defense and data protection.

They were given one mission: figure out how to hack the computers of hostile nations, crack the encryption, and decrypt the data. Other than that, there were no rules or guidelines. The unit has to be adaptable and willing to try anything to succeed with limited resources. And they have to learn to work together.

If there is a problem, these tech wizards will figure out a way to fix it like real-life MacGyvers. They can solve everything from a water scarcity and impending rockets to live-saving medical solutions using artificial intelligence as well as innovative methods of travel via social entrepreneurship on shoe-string budgets.

It’s a start-up by design.

How do we transition to a Tech Nation?
All of that being said, it is becoming clear that Israel is growing up. We have taken off our training wheels and our start-ups are moving ahead at full-speed. Ran Senderovitz, VP, general manager at Intel Israel Development Centers believes that to continue calling us startup nation is like saying we are Peter Pan, never growing up. And we have proven that we can succeed in the long term.

To paraphrase Friedrich Nietzsche, we need the Dionysian ecstasy to thrust our passions forward and the rational thinking of Apollo to keep these creations stable. Passion builds the product and drives innovation. But that is only part of the game.

We need the methodical business people to channel our passions into solid businesses that can withstand time. Moreover, we’ll need to open ourselves up to partnerships that may challenge our comfort zones.

And that will be the unique challenge in this hot-tempered climate.

About the Author
Claire Polansky is a Marketing Writer for Tel Aviv University and a freelance writer. She holds a Ph.D in East-West Psychology, an M.A. in Art Therapy/Counseling Psychology, and a BFA in Fine Art. She uses her media knowledge to generate conversations about Israel-based startups and natural health.
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