Start-up Nation: The Story of Israel's Economic Miracle

A reform happens when you change the policy of the government; a revolution happens when you change the mind-set of a country.

Four guys are standing on a street corner… an American, a Russian, a Chinese man, and an Israeli…. A reporter comes up to the group and says to them: “Excuse me…. What’s your opinion on the meat shortage?” The American says: What’s a shortage? The Russian says: What’s meat? The Chinese man says: What’s an opinion? The Israeli says: What’s “Excuse me”? —MIKE LEIGH, Two Thousand Years

it is a story not just of talent but of tenacity, of insatiable questioning of authority, of determined informality, combined with a unique attitude toward failure, teamwork, mission, risk, and cross-disciplinary creativity.

In the Israeli army, soldiers are divided into those who think with a rosh gadol—literally, a “big head”—and those who operate with a rosh katan, or “little head.” Rosh katan behavior, which is shunned, means interpreting orders as narrowly as possible to avoid taking on responsibility or extra work. Rosh gadol thinking means following orders but doing so in the best possible way, using judgment, and investing whatever effort is necessary. It emphasizes improvisation over discipline, and challenging the chief over respect for hierarchy.

Dov Frohman, the founder of Intel Israel, later said that to create a true culture of innovation, “fear of loss often proves more powerful than the hope of gain.

in the Israeli military, the tactical innovation came from the bottom up—from individual tank commanders and their officers. It probably never occurred to these soldiers that they should ask their higher-ups to solve the problem, or that they might not have the authority to act on their own. Nor did they see anything strange in their taking responsibility for inventing, adopting, and disseminating new tactics in real time, on the fly.

A 2006 Harvard University study shows that entrepreneurs who have failed in their previous enterprise have an almost one-in-five chance of success in their next start-up

You rarely see people talk behind anybody’s back in Israeli companies. You always know where you stand with everyone. It does cut back on the time wasted on bullshit.

Cái mới không phải lúc nào cũng tốt hơn cũ,nhưng ít nhất dòng chảy của những ý tưởng tươi mới cũng giúp hạn chế sự lão hoá của đầu óc giới quân đội, thường là hình phạt cuối cùng cho chiến thắng và là nguyên nhân thất bại trong tương lai.

At the heart of this combined impulse is an instinctive understanding that the challenge facing every developed country in the twenty-first century is to become an idea factory, which includes both generating ideas at home and taking advantage of ideas generated elsewhere.

What the Soviet émigrés brought with them is symptomatic of what Israeli venture capitalist Erel Margalit believes can be found in a number of dynamic economies. “Ask yourself, why is it happening here?” he said of the Israeli tech boom. We were sitting in a trendy Jerusalem restaurant he owns, next to a complex he built that houses his venture fund and a stable of start-ups. “Why is it happening on the East Coast or the West Coast of the United States? A lot of it has to do with immigrant societies. In France, if you are from a very established family, and you work in an established pharmaceutical company, for example, and you have a big office and perks and a secretary and all that, would you get up and leave and risk everything to create something new? You wouldn’t. You’re too comfortable. But if you’re an immigrant in a new place, and you’re poor,” Margalit continued, “or you were once rich and your family was stripped of its wealth—then you have drive. You don’t see what you’ve got to lose; you see what you could win. That’s the attitude we have here—across the entire population.

According to the pioneering work of Nobel Prize winner Robert Solow, technological innovation is the ultimate source of productivity and growth.22 It’s the only proven way for economies to consistently get ahead—especially innovation born by start-up companies.

The cultural differences between Israel and the United States are actually so great that Intel started running “cross-cultural seminars” to bridge them. “After living in the U.S. for five years, I can say that the interesting thing about Israelis is the culture. Israelis do not have a very disciplined culture. From the age of zero we are educated to challenge the obvious, ask questions, debate everything, innovate,” says Mooly Eden, who ran these seminars. As a result, he adds, “it’s more complicated to manage five Israelis than fifty Americans

George Bernard Shaw wrote, “If you have an apple and I have an apple and we exchange apples, then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”4 While

the “edge of chaos.” They define that edge as “the estuary region where rigid order and random chaos meet and generate high levels of adaptation, complexity, and creativity.

In Israel’s elite military units, each day is an experiment. And each day ends with a grueling session whereby everyone in the unit—of all ranks—sits down to deconstruct the day, no matter what else is happening on the battlefield or around the world.

With all its problems, Israel has one commanding advantage: a sense of purpose. Israelis may not have affluence… or the quiet life. But they have what affluence tends to smother: a motive.

You can tell a lot about a society based on how [its members] refer to their elites. Israel is the only place in the world where everybody in a position of power—including prime ministers and army generals—has a nickname used by all, including the masses.

So long as the risk was taken intelligently, and not recklessly, there is something to be learned.

in this country there’s an unwritten social contract: we are going to serve in this army provided the government and the army are responsible toward us….

Dan Yakir is a scientist at the Weizmann Institute who manages the FluxNet research station at Yatir. He says that the forest not only demonstrates that trees can thrive in areas that most people would call desert, but that planting forests on just 12 percent of the world’s semi-arid lands could reduce atmospheric carbon by one gigaton a year—the annual CO2 output of about one thousand 500-megawatt coal plants. A

Doubt and argument—this is a syndrome of the Jewish civilization and this is a syndrome of today’s Israel.

Alex Vieux, CEO của tạp chí Red Herring nói với chúng tôi rằng ông đã có mặt ở "hàng triệu hội thảo về công nghệ ở nhiều châu lục. Lúc nào tôi cũng thấy người Israel như Medved đang diễn thuyết cùng với những đồng nghiệp từ nước khác. Những người khác luôn giới thiệu về công ty của họ. Những người Israel luôn giới thiệu về đất nước Israel.

Người Israel đã nắm được quy tắc phượt toàn cầu một cách quyết liệt hơn bất kỳ một quốc gia nào khác, đó là: đi thật xa, ở thật lâu, và nhìn thật kỹ

All the time you want to change and change,” Peres said, speaking of both the Jewish and the Israeli condition. Echoing what we heard from almost every IDF officer we interviewed, Peres said, “Every technology that arrives in Israel from America, it comes to the army and in five minutes, they change it.” But the same thing goes on outside the IDF—an insatiable need to tinker, invent, and challenge.

Exhibiting the common Israeli response to all forms of success, many figured, If these guys did it, I can do it better.

But it is also a way of thinking that produces particularly creative solutions and potentially opens up new industries and “disruptive” advances in technology. It is a form of free thinking that is hard to imagine in less free or more culturally rigid societies, including some that superficially seem to be on the cutting edge of commercial development.

The multitasking mentality produces an environment in which job titles—and the compartmentalization that goes along with them—don’t mean much.

Israelis have a term for this: davka, an untranslatable Hebrew word that means “despite” with a “rub their nose in it” twist. As if to say, “The more they attack us, the more we will succeed.” As Eitan Wertheimer told Warren Buffett at the start of the 2006 Lebanon war, “We’re going to determine which side has won this war by ramping up factory production to an all-time high, while the missiles are falling on us.

Medved was not suggesting that there was a correlation between violence in Israel and its attractiveness to investors. Rather, he believes that Israel has managed to divorce the security threat from its economic growth opportunities. In other words, Israelis are confident that their start-ups will survive during war and turbulence. And Israeli entrepreneurs have managed to convince investors of this, too.