How come Israelis are so good with startups?
Israel, a small country with very limited resources, is attracting a lot of attention in recent years as it turned to be a well established startup hub. I read many articles and opinions which try to explain the reasons for that. In most cases the explanation is focusing at the Israeli military service, and especially at the “computers units” (aka 8200), Israelis have got an advantage over other nations. Well this is actually marketing bullocks which does not even come close to the truth: in this article I will focus on the reasons for Israel to turn into a startup nation. My comparisons would be mainly to New Zealand, where I live, and where the situation is almost the opposite: a country with lots of resources and has got an incompetent startups / IT industry.
1. Israelis know how to collaborate
Sometime in the history of our evolution, human beings created a higher organization than “the self” – a society. Humans learned that if it is better if they collaborate, rather than challenge the task of survival by themselves. Chimpanzees, for example, are highly intelligent creatures and are capable of building tools, but unfortunately for them, they do not know how to collaborate, which means – that each individual is working alone and each generation is reinventing the wheel. I read once, that it is impossible for two chimpanzees to carry one log of timber together. It means that chimpanzees would never be able to build a house. Human beings must collaborate in order to succeed – and Israeli collaborate really good. The society in Israel is based on tribunal values, with a mix of modern way of thinking. Tribunal values make people collaborate – even if they do not get an immediate reward. It will be very common to see professionals (content writers, developers – even lawyers) – doing free work for others – or doing work for equity – and not as part of a service agreement.
2. Israelis are risk takers
This might be related to the military service, but definitely not to 8200 (which is an office unit, not a field unit, and therefore is not exposed to life risks) – Israelis are risk takers. Israelis are ready to invest – time and money – and to lose it without too many cries or rejects to do it again.
3. Israelis have a good mix of races and cultures
Israel is a mixed nation of races and nationalities: mainly Jewish and Muslims, while the Jewish society is a mix of many races – European, Africans, Sephardi, Russians, and the Muslim society is a complete mix of immigrants from all over the lavant. This mix is creating a very good entrepreneurship spirit: people do not really care where people came from (in NZ it is the first question I have been asked, over and over again, and anywhere I go) – they care about what you do and your skills (how could we collaborate?). The mix of cultures – I mean real mix of cultures, is creating cultural diversity which is a very important aspect of creativity.
4. Jewish culture and values
There are two important Jewish cultural aspects that make Israel so successful with startups. The first one is the Jewish mother, the other one is that Jewish (especially from Arab and Sepharadi decent) – do not drink alcohol. The Jewish mother is something special – even today when I’m 50 years old, when I call my mother – her first question is “how is work?”. The Jewish mother wouldn’t let her kids to be lazy – she would expect you to work hard, to study for a high degree, and to “do something useful with your life”. Jewish are also not heavy drinker either – and I think this is a very important aspect to keep creativity and business under control.
5. Israelis work hard
You are probably saying “we all work hard”, yes, but Israelis work very hard. You go online, Israelis speak about work, and opportunities, and business. This is the main focus of Israeli life: you go to a barbecue “party” in Israel, the discussion is about business, about ideas, about startups. Even my 14 years old nephew is speaking about running his own startup. The discussion won’t be about the beer, or the wine, or the Chinese restaurant which you visited yesterday. The discussion will be about business and new ideas.
6. Israelis don’t care about details
This is probably the most important point. While living with Europeans, and especially with New Zealanders, I noticed a lot of care to details. It is nice sometimes, but it is very not useful for business managers, and especially for startup entrepreneurs. If you want to run a startup, let someone else care about the details. For example…: when an Anglo Saxon is reading those lines, they spot the grammar mistakes. Not only that they think about the grammar mistakes, they would invest an hour and discuss it with me. Israelis don’t care about grammar mistakes. If grammar mistakes is a business problem, they would give the content writing to a professional. If the grammar mistakes are not an impediment to progress the business, they would just leave it as is. That was just an example of course. The point is, that when you discuss things with Israelis, they care about the business, the vision, the strategy – the high level things. They do not care about the details. They have plans. Big plans. Small details do not fill their minds.
7. Israelis don’t care about titles and formality
18 years back, in the hot years of the internet bubble, I was consulting to one of the richest people in Israel. He wanted to invest in satellite infrastructure, so he hired a board room in a fancy hotel in Tel Aviv, and invited some very powerful IT CEOs for discussions. I don’t remember a lot from those meetings, I just remember that between the assistants to the CEOs, you couldn’t really tell who is who. I also remember that some CEOs came to the meetings with T shirts and sandals. In my eyes – dress codes and formality can only suppress good ideas. Big job titles create people which are full of themselves and not of ideas. And in Israel – it hardly exists.
8. Israelis are very bad at keeping the laws
I once had this startup idea (which I still think that it is a brilliant idea) – and I looked for people to collaborate with in Wellington, New Zealand. I remember that the few meetings that I had, very fast turned into investigations if the idea is legal or not. I ended up visiting three different lawyers which each one of them said separately, that such a product is not legal in New Zealand. Trust me, it was a 100% kosher brilliant SaaS, and when I suggested it to Israelis, they were focusing on “how are we going to market it” or “how are we going to build it” rather than its legality. Israelis don’t care so much about the laws, they keep those problems to the company lawyers. New Zealanders are always busy in learning and following the law, as if it was a Torah given by God him/her self. Also, Israelis don’t like their government and politicians, even if they voted for them. Israelis are very critical people, even if they see good results. Critical thinking is a basis for developing good ideas.
9. Israeli government is not disturbing, sometime even helping
One of the problems which I noticed in New Zealand, that the government is really stopping progress: they are busy in regulating everything and pursuing people for not following the law. They are putting all sorts of laws and regulations which make it really hard on entrepreneurs. In Israel – the situation is exactly the opposite: in some cases, Israel is a refuge for many “grey area” ventures, which wouldn’t be able to run from New Zealand. A good example: the Israeli IRS (IRD) has the power to negotiate on the tax level with companies. Companies which employ people or are in an area which is hard to collect tax, may get some tax breaks.
10. Israelis are quick
Several years back, a delegation from New Zealand went to Israel to learn “how to develop New Zealand into a startup nation”. As I’m connected to lots of Israelis, they connected me to one of the CEOs of a major New Zealand company which was part of this delegation. I emailed that person that I would like to meet him, as I got an idea how to progress the NZ startup industry. I got an answer, but not from him – my Email was forwarded to his program manager (mistake number one), which emailed me back “Oh! thank you for writing me! We have just got back from Israel and building a program, we will get back to you in August [6 months away]” – that was mistake number 2. And I never heard from them since.
In Israel, such a thing wouldn’t happen. If you are well reputed, and got connected to someone, that person would like to meet you and see “how we could collaborate”. The meeting would take place very quick, a matter of days.
Well, that it for today. I got lots of other observations in regard, but I must call my mom and report back how successful was my business today 😉