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Rising above: Israeli tech startups show resilience amid conflict

Israeli tech startup founders at the New York Stock Exchange on January 18, 2024. Photo by Ed Frank.
Israeli tech founders at the New York Stock Exchange visit, organized by Axis Innovation, on January 18, 2024. Photo by Axis Innovation.

Despite the toll that the ongoing war against Hamas is taking on the Israeli economy, resulting in Moody’s recent downgrade of Israel’s credit ratings, the country’s tech ecosystem is showcasing unprecedented resilience. In January alone, Israeli startups raised over $473 million, a 75% increase compared to the same period last year.

Our team demonstrated the true meaning of this resilient community. Just two weeks before the war, we celebrated the launch of our new product – the result of years of intensive research and development efforts. We felt we were perfectly positioned to meet the surging demand for AI-powered automation solutions in traditional industries. I expected the challenges we’d face over the following months to revolve around onboarding of new clients, stress testing our technology and the growing pains of rapid scale.

The war turned everything upside down in an instant. On October 7th, my day began with a flurry of phone calls to family, friends and our team, to ensure they were all safe. One of my data scientists, who was staying in a kibbutz just an hour south of Tel Aviv’s bustling tech center, was off the grid for 36 hours. We later learned that he was sheltering with his pregnant wife in their home’s safe room as a horrific massacre took place outside. Two days later their son was born. These aren’t the stories you expect when thinking about building an AI startup, but that was our reality.

Like many other Israeli tech leaders, I had to figure out not just how to run a successful startup, but how to make it resilient enough to survive this crisis. I faced new challenges every day: What do you do when your key employees leave for reserve duty? How do you support those who stay while continuing to deliver for your clients? What do you tell your investors? How do you go from trauma to continued growth?

The months that followed were extremely challenging for the Israeli tech ecosystem. It has been filled with tremendous pain, sadness and loss. Yet despite this, my team – like hundreds of other teams at Israeli tech startups – has shown unbelievable strength and resilience. In this article, I’ll share my personal experience navigating this storm and the lessons I learned along the way that helped Israeli tech deliver no matter what.

Steadying the ship

In times of crisis, the chaos can be overwhelming, with a million different things happening at once, making it challenging to discern what needs immediate attention. It’s during these moments that the urgency of prioritizing tasks becomes paramount, as the sheer magnitude of the situation can put you in a state of paralysis. That’s why when faced with something as devastating as a war, the ability to focus on the most immediate tasks becomes a critical skill.

When my team couldn’t work from the office where they were running to the shelter dozens of times a day, I had to shift back to my Covid-era experience, readjusting our daily processes to remote mode. Another lesson that the pandemic taught me was that you have to always be prepared with plan B and plan C. When resources were tight in Israel, I hired a team in Greece to help with developers.

Our technology, initially developed for enterprises, found a new purpose during the war. I started to receive calls from friends in the healthcare system in Israel. They had surgeons going from surgery to surgery who didn’t have time to capture critical data. So we offered them to send us WhatsApp voice messages at the end of every surgery before the re-scrub, and we generated automatic reports for them.

Now tens of thousands of social workers and psychologists in Israel are working around the clock, helping people traumatized by the war. We help them to capture the session summary in real-time, in speech, and are happy to do whatever we can to help.

Supporting your team

After putting out the most urgent fires, the next place to focus was demonstrating our commitment to the well-being of our workforce in times of uncertainty. This responsibility goes beyond moral obligations, evolving into a strategic investment. Employees who feel supported and cared for are better equipped to handle stress, adapt to changes, and collaborate effectively. During times of crisis, maintaining a sense of normalcy and stability becomes crucial for workers who may be grappling with personal or familial challenges, which in turn impacts the overall stability of the organization.

That’s why one of the most pressing concerns in the first days of the war was taking care of my 60 employees, 17 of whom were called up for duty, including our head of research and chief architect. Additionally, the spouses of several employees were also drafted. Soon, I found myself buying mobile chargers, parkas and other necessities for soldiers.

Apart from that, I had to make sure that their families weren’t left behind and struggling. We assisted them by providing groceries, babysitting, and assisting with any other basic needs they had. We also had key employees whose partners were called up for duty. With schools and kindergartens closed due to constant rocket fire, we stepped in to help with immediate needs.

That allowed our employees to maintain focus on their work responsibilities without the added burden of worrying about essential necessities for their families. This support not only bolstered their well-being during a challenging time but also fostered a sense of security, enabling them to contribute effectively to our collective efforts.

Communicating with stakeholders

The outbreak of the war in Ukraine in 2022 highlighted for me the profound importance of clear and timely communication to those outside of the conflict zone, who will struggle to make sense of what they’re seeing on TV. I had a developer in Ukraine and was immediately overcome with concern for his safety.

With the war in Israel, I knew it was only a matter of time before our investors, partners and customers would start to ask themselves similar questions. Dealing with Fortune 50, Fortune 500 companies with long-term commitments, heightened the need for swift action before the “glue” holding together important relationships became unglued.

Recognizing the fragility of ties that bind you to investors and partners is the first step in reinforcing them. That’s why, less than three weeks after the war started, I took the most difficult trip of my life to address concerns and reinforce our commitment to deliver. I took “buckets of glue” and got on a plane to apply extra layers to reinforce key relationships.

As a famous saying goes, culture eats strategy for breakfast. Clean, consistent communication with employees, investors and customers is crucial. A month into the war, I wrote a letter to friends of aiOla: investors, international partners, and employees. It was a letter about resilience, showcasing our company’s ability to achieve great results despite all the pain and losses. We completed our very best business month in October, which wouldn’t have been possible without the above-mentioned steps that I had to take to navigate the chaos.

Shifting from survive to thrive

Survival mode is not a sustainable long-term strategy. Despite grappling with numerous challenges, commitment to growth is pivotal. At aiOla, we continued to embark on new projects and expand our team. These decisions weren’t merely fueled by my optimism, but strategically positioned at the confluence of opportune moments and a well-crafted approach.

Swiftly transitioning to a growth mindset, we signed a long-term contract and nationwide deployment with a Fortune 35 company, secured a deal with one of the largest retail companies in North America, and established a close partnership with leading private equity firms to serve their portfolio companies. We also partnered with a Fortune 50 company to transform their core service worldwide.

We also kept expanding our team, which might seem like an irrational decision during the war, when many companies were sending their staff on unpaid leave. But the prevailing theme in the Israeli tech industry is “We deliver no matter what.” Yes, we are facing unprecedentedly hard times, but that doesn’t mean we need to stop growing and bringing value.

I believe that this transformative experience equipped us with crucial resilience, and our startup has developed an essential muscle for facing future challenges. Just like with individuals who have undergone a traumatic event, I believe that organizations can also experience post-traumatic growth (PTG) as a result of adversity, rising afterward to a higher level of functioning, which is what we’ve been witnessing with Israeli tech.

Post-crisis readjustment

While the war is still ongoing in Israel, the country is settling into a new kind of normal. However, when a crisis winds down, things don’t snap back to how they were. We are going through an adjustment period, and it’s important to understand that some things may never return to how they were before, especially when it comes to personal experiences. After 90-100 days of service, many employees come back to work as different people, having witnessed the harsh realities of war, some losing friends and enduring terrible sights.

Recognizing the importance of allocating resources for their readjustment, we encountered a new challenge. Drawing from my own experience back in my days of service of being wounded in combat and stranded for 26 hours before rescue, I found myself better equipped than most to understand the emotional journey some of my employees are now undertaking.

To facilitate their readjustment, I’ve underscored the importance of patience within the team. Returning to a seemingly normal office environment, where discussions revolve around casual topics like lunch plans, proves challenging after such traumatic experiences.

Some might feel like outsiders in a setting that has evolved during their absence. This challenge extends beyond the workplace: for instance, it often requires significant adaptation for a father returning to his family after 90 days at the frontline. At times, going back to the unit seems more comfortable due to less friction than what they face at home.

The key lesson here is that it’s crucial to prioritize bringing employees back with patience, care, and love. Recognizing the profound changes they undergo and providing a supportive atmosphere are crucial components of a successful readjustment.

Conclusion

Despite the entire country experiencing widespread trauma, remote work challenges, children staying at home, economic instability and various other issues, some of the most significant developments in our company happened during October, November, and December. Our resilience was tested, but we came out stronger than before, achieving outstanding business results and continuing to expand our team.

As a result, my optimism for the future of my startup and Israeli tech has grown. The challenges of war made us stronger. While we always held a sense of purpose and mission, they are now amplified. Moreover, my team fully grasps the significance of our work for the Israeli tech ecosystem in the face of adversity. Our ability to make an impact on a country during a war, when so many people were affected, brings us immense satisfaction and pride.

Reflecting on the last four months, the main lesson I learned is that failure is not an option. Even war cannot stop us from delivering on our mission. In the end, this steadfast determination may be the catalyst that propels the startup nation to the next level.

About the Author
Amir Haramaty is the CEO at aiOla, managing corporate operations and strategically driving the company towards the future of AI for the masses. Prior to joining aiOla, he served as CCO at SparkBeyond, crafting commercial strategies and execution from the ground up. Amir has worked with Fortune 500 firms, developed successful partnerships with McKinsey, Microsoft, and Baker McKenzie, and drove over $1 billion in impact for clients across 20+ industries.
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