Start-Up Nation

In an effort to maintain full disclosure – I must confess that I have been a fan of Israeli culture since the raid on Entebbe Airport (in Uganda) by Israeli (IDF) commandos in the summer of 1976 that successfully rescued hostages from a hijacked Air France plane.

I was 11/12 years old when it happened and in the months and years that followed, I read every article and book on the subject I could get my hands on and watched every movie and documentary made on the Entebbe raid (even the bad TV movie with Linda Blair). :-o

My favorite movie was the Israeli made, “Operation Thunderbolt” – that was nominated for an Academy Award for best foreign language film in 1978.

Years later I was stoked to acquire the 25 year anniversary two disc DVD of Operation Thunderbolt! And at the same time, I stumbled upon the book “Entebbe: A Defining Moment on the War on Terrorism – the Jonathan Netanyahu Story” which painstakingly outlined the background and strategy surrounding the hijacking and rescue as well as demystified some of the legends that arose from the incident.

That said, politics aside, I am a total dork when it comes to anything IDF.

I am also a dork when it comes to trying figure out why some organizations and businesses succeed while others fail….or begin with a flashy launch only to slowly and painfully decline into a stagnant mess.

In late November 2009 I happened to be listening to Talk Radio and heard the tail end of an interview with the writers of a new book entitled, “Start-up Nation”. The book discusses how Israel has more successful (and innovative) start-ups than any other country in the world and outlines a series of reasons why these ventures succeed in Israel and why not in other countries through a series of interviews and anecdotes.

The author’s of Start-up Nation outlined roughly seven (7) unique qualities that when woven together create a fascinating recipe for success – that I am not sure could be replicated anywhere else:

· Education –Israeli’s have easy access to several top notch Universities and Research Institutes. In addition, these Universities are not the Tel Aviv branch of American or European schools – but instead Israeli founded institutions.

· Mandatory Military Service - In addition to mandatory military service, the Israeli military (unlike other countries) encourages a flat organizational structure, brutal honesty (chutzpah) and a non-politically correct environment. The result creates independent thinking individuals with strong problem solving skills.

· Israel is a small town – there are only 7+ million people in the country. This creates a small town / community environment where everyone knows or is related to everyone. This fact seems to foster nurturing (business) relationships.

· Ownership vs. The Sheik’s Dilemma – Individuals who start businesses in Israel have ownership of their business. This is unique in this part of the globe. In neighboring countries the government or royal families tend to own local businesses – therefore there is no incentive for the proprietor to make it grow or thrive.

Incidentally, the authors noted that in Dubai – the thriving businesses tended to be the Dubai Branch of another country’s business (i.e. Bank, Retail Outlet, etc.) – not a business owned and operated by a Dubai citizen.

· Immigrant Work Ethic and Citizenship - Israel has a generous citizenship process. Therefore, new groups of immigrants seem to arrive at frequent intervals. This fact mixed with opportunity creates an environment for new arrivals to thrive economically through hard work and diligence. As one group of immigrants becomes established and perhaps slows down to enjoy the fruits of their labor….another new group immigrants arrive to keep the country’s economic cycle thriving.

· Opportunity – In recent decades government regulations have been relaxed to encourage greater economic growth in a variety of fields (i.e. investment banking and hedge funds).

· Edge / Adversity –The authors described the experience of an American businessman who travelled to Israel for an investment meeting. While in flight he realized that his destination was literally a tiny island of democracy surrounded by countries hostile to its existence. Dealing with this type of adversity on a daily basis creates a unique personality trait in its citizenry that is not allowed to devolve (over time) into a mindset of suburban complacency (like in more peaceful nations). Glassman of the Wall Street Journal described this personality trait best, “…an almost abrasive individualism and the kind of self-reliance that occurs in a country that has to go it alone to survive”

Politics aside, I strongly recommend to anyone interested in business, economics or organizational structures, the book: “Start-up Nation”.


References

Glassman, J. (November 2009). Where Tech Keeps Booming: In Israel, a clustering of talent, research universities and venture capital. Wall Street Journal. Retrieved November 28, 2009,
http://online.wsj.com/article/SB10001424052748704779704574553884271802474.html

Netanyahu, I. (November 2003). Entebbe: A Defining Moment in the War on Terrorism--The Jonathan Netanyahu Story. Balfour Books.

Senor, D & Singer, S. (November 2009) Start-Up Nation: The Story of Israel's Economic Miracle. New York. Twelve Books / Hatchet Book Group.