What San Antonio Startups Can Learn from Soldiers of Fortune: How the Israeli Army became the most prolific innovation engine on earth.
December 17, 2009
This is a reprint from Newsweek Magazine. With all of the military influence here in San Antonio, there are some great lessons to be learned.
Read on….
By Dan Senor and Saul Singer | NEWSWEEK Published Nov 14, 2009 From the magazine issue dated Nov 23, 2009
How does Israel—with fewer people than the state of New Jersey, no natural resources, and hostile all around—produce more tech companies listed on the NASDAQ than all of Europe, Japan, South K India, and China combined? How does Israel attract, per person, 30 times as much venture capital a and more than twice the flow to American companies? How does it produce, for its size, the most cu edge technology startups in the world?
There are many components to the answer, but one of the most central and surprising is the Israeli military’s role in breaking down hierarchies and— serendipitously—becoming a boot camp for new tech entrepreneurs.
While students in other countries are preoccupied with deciding which college to attend, Israeli high- school seniors are readying themselves for military service—three years for men, two for women—and jockeying to be chosen by elite units in the Israeli military, known as the Israel Defense Forces, or IDF.
As selective as the top Israeli universities are, certain commando, intelligence, Air Force, and high-tech IDF units are even more so. The prestige of these units makes them the national equivalent of Harvard, and MIT for the Israeli tech world. Even outside the elite units, the military experience of Israeli job applicants tells prospective employers what kind of selection process they navigated, and what skill relevant experience they may already possess.
For Americans, the idea that military service can be great training for business is surprising. “Innov hardly the first word most people associate with the military. “Improvisation” is even less likely to c mind. And “flat”—as in anti-hierarchical and informal—would be completely counterintuitive. Yet th exactly the attributes that employers have come to expect from young people emerging from their st
PRINIDF.
Talk to an Israeli Air Force pilot and you will see why. “If most air forces are designed like a Formul race car, the Israeli Air Force is a beat-up jeep with a lot of tools in it,” one pilot told us. A U.S. Air F “strike package” often consists of four waves of specialized aircraft: a combat air patrol to clear a cor enemy aircraft; a second wave to suppress enemy antiaircraft systems; a third wave of electronic-wa aircraft, refueling tankers, and radar aircraft; and, finally, the strikers themselves—planes with bom Israeli system, almost every aircraft is a jack-of-all-trades. “You do it yourself,” one pilot noted. “It’s effective, but it’s a hell of a lot more flexible.”
The Israeli business culture’s emphasis on multidisciplinary skills—on everyone being able to opera many sectors—rather than an intense and narrow focus in one area flows directly from the military also produces mashups: the combination of radically different technologies and disciplines.
Given Imaging, for example, is the Israeli startup behind the PillCam. The company’s founders took miniaturized sensing systems from the nose cones of fighter jets to create a swallowable camera. Th weighs 4 grams, and can beam a movie from inside a patient’s intestine out to a doctor’s monitor in room or across the globe. This is making some highly invasive and painful diagnostic surgeries all b obsolete. Given Imaging, listed on the NASDAQ, was the first company to go public after September (Article continued below…)
The three founders of biotech mashup Compugen—president Eli Mintz, chief technology officer Sim Faigler, and software chief Amir Natan—met in the IDF. Twenty-five of the 60 mathematicians in th company joined through the founders’ network of Army contacts. While still in the Army, Mintz cre algorithms for sifting through reams of intelligence data to find the nuggets that have been so critica Israel’s successes in hunting terrorist networks. When his wife, a geneticist, described the problems in analyzing enormous collections of genetic data, Mintz and his partners sought to revolutionize th of genetic sequencing.
The American corporate giant Merck bought Compugen’s first sequencer in 1994, a year after the st founded and long before the human genome had been successfully mapped.
The IDF also offers recruits another valuable experience: a unique space within Israeli society wher men and women work closely and intensely with peers from different cultural, socioeconomic, and r backgrounds. A young Jew from Ethiopia, the son of an Iranian immigrant, a native-born Israeli fro swanky Tel Aviv suburb, and a kibbutznik from a farming family might all meet in the same unit. Th spend two to three years serving together full time, and then spend another 20-plus years of annual in the reserves.
Not surprisingly, many business connections are made during the long hours of operations, guard d training. This gives young Israelis a tight-knit network with global reach. Two out of three Israelis a immigrants or the children of immigrants. The military is much better than college for inculcating y leaders with a sense of social range.
But the military can also do something much more counterintuitive: it breaks down hierarchies. No when one thinks of military culture, what comes to mind is unwavering obedience to superiors. But doesn’t fit that description. One way that the IDF exhibits a flat, non-hierarchical culture—more like startup than a large corporation—is that it works to drill responsibility down to lower levels. “The ID deliberately understaffed at senior levels. It means that there are fewer senior officers to issue comm says Edward Luttwak, a military historian. “Fewer senior officials means more individual initiative lower ranks.”
In the reserves, which are the backbone of the Israeli military in time of war, this flatness and dispe responsibility is most pronounced. Hierarchy is naturally diminished when taxi drivers can comman millionaires and 23-year-olds can train their uncles. This helps to reinforce that chaotic, anti-hierar ethos that can be found in Israeli society, from war room to classroom to boardroom.
It creates an openness to challenging, debating, and probing—even of one’s superiors—that permea Israeli startup scene; it helps produce unconventional solutions to tough business problems. Nati R lawyer in his civilian life and a lieutenant colonel who commands an Army unit in the reserves. “Ran almost meaningless in the reserves,” he says. “A private will tell a general in an exercise, ‘You are do wrong; you should do it this way.’ ”
This is not to say that soldiers aren’t expected to obey orders. But, as Amos Goren, a venture-capital with Apax Partners in Tel Aviv and a veteran Israeli commando, says, “Israeli soldiers are not define rank; they are defined by what they are good at.”
Innovation often depends on having a different perspective. Perspective comes from experience. Re experience also typically comes with age or maturity. But in Israel, you get experience, perspective, maturity at a younger age, because the society jams in so many transformative experiences when its are 18 to 21 years old. By the time they get to college, their heads are in a different place than those American counterparts.
According to the Organization for Economic Cooperation and Development, 45 percent of Israelis a university-educated, which is among the highest percentages in the world. But is it really the univer it the fact that Israel is the only country where most university students have also had a crucible lea experience before they even begin their post-secondary education? Or perhaps it’s that Israel’s univ students get so much more out of the college classroom because—unlike American students—by the they go to campus they are far more mature and grounded. By their early 20s, they know the true m
“life and death,” and—as one Israeli general told us—the “value of five minutes” when having to mak stakes decisions in the fog of ambiguity. That’s a skill that’s just as valuable on the corporate battlefi a real one.
Adapted from the book Start-Up Nation by Dan Senor and Saul Singer. Copyright © 2009 by Dan and Saul Singer. Reprinted by permission of Twelve, a Division of Hachette Book Group, New Yor N.Y. All rights reserved.
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