Israel’s Venture Capital Scene : What Can U.S. Entrepreneurs Learn From Israeli Startup Culture?
What Can U.S. Entrepreneurs Learn From Israeli Startup Culture? Israel’s startup ecosystem is world-renowned for its prolific output of high-tech innovation. Israel has the highest number of startups per capita in the world, at about 1 startup for every 1,400 people. There are marked differences between American and Israeli startups and workstyles: the hiring turnover rate in Israel is much faster; the work climate there lacks social hierarchy; and it’s common to have founded a startup together with one’s army connections, to name a few. How does the experience of the average Israeli lend itself to innovation? It is clear that Israel’s compulsory military service for citizens has something to do with the country’s high rate of innovation. American startups could undoubtedly benefit by implementing some basic lessons from Israeli entrepreneurs.
When I first had the idea to work in Israel’s high-tech scene, I reached Meron Lavie–the CTO and VP of R&D at an Israeli startup called XCifrcular, and a fellow alumnus of Amherst College. Lavie happened to be on a two-week vacation in the U.S., so we met in Boston for coffee. I asked him what he thought of working in Israel, and if he had any advice about navigating the professional world there.
I remember very clearly what he suggested: “If you want to understand how to manage people in Israel, you have to join the army.” An entry-level job? No-army service required. But beyond that, Lavie explained that I would be at a loss in terms of communicating and leading at an Israeli company without having served in the military.
I ultimately took Lavie’s advice and now understand what he meant. The connection between Israel’s mandatory national service and its entrepreneurial economy is undeniable. The Israeli startup scene is rooted in values acquired through national service, namely a deep proficiency in teamwork. When people serve together in the Israeli army (or other forms of national service for those who are exempt from the IDF), they create cooperative units in which they constantly perform team building exercises and work towards a common goal. Teams of Israeli soldiers regularly learn and execute disaster management, rapid problem-solving, and pivoting as a group when necessary. I noticed in the army that once each soldier internalized that he or she was working towards a common goal with the rest of the group, attitudes changed—suddenly, instead of trying to prove themselves on an individual level, each soldier stayed back to help the others learn and accomplish joint tasks.
Contrastingly in the U.S., no status quo of national service exists to bring youth together in a concerted effort to achieve a goal beyond individual achievements. In American colleges, students compete for scarce resources like class rankings and jobs, with very little collaborative contexts. There are plenty of exceptions to the rule, but it’s much more frequent that Israeli startup founders will have had a shared military background than it is among their American counterparts.
Thinking back on the startup where I worked before the army, the sense of teamwork was palpable and unlike what I had experienced in the U.S.; the software developers on my startup team would constantly perform “hafifa,” (overlap): filling in their colleagues’ knowledge gaps in order to best serve the startup.
Israel’s Venture Capital Scene
In sum, it’s during national service that people form teams and work towards a common goal, and it’s those teams who form startups. It’s in the army that people are encouraged to rapidly identify problems and devise solutions together that can quickly be implemented as a team. Combining teamwork with the network that soldiers build during their service and the technological skills that soldiers gain in a variety of roles, it makes sense that so many Israelis are uniquely prepared to found and manage startups—often directly after the army. One elite technological unit—8200—has a long list of companies founded by teams of alumni, including Wix, Check Point, Waze, and Palo Alto Networks.
Another takeaway that American startups could integrate from Israeli entrepreneurial ventures is their higher degree of social informality in the workplace, including a less-defined social hierarchy and an underlying appreciation for creativity, regardless of its source. Having worked at an Israeli startup, I learned that I could walk into the CEO and CTO’s office, call them by their first names, and pitch an idea to them—and then have a conversation about how to turn those ideas into working points. The level of informality stems from the army, where the content of contributions is more important than the source. Perhaps American companies could learn from Israel’s informal distance between management levels in the workplace, which allows for a greater flow of creativity and ideas between the front lines and upper management.
I remember one time on my army base when my staff sergeant collapsed from heat exhaustion, and I was the only medic on base to treat him. My medic colleague, usually exasperated with my rudimentary Hebrew, called from another base and his behavior towards me totally changed. He patiently went through a checklist with me to make sure that all eventualities had been covered. Having experienced the Zen-like calm that comes over a team under stress, it was clear to me that this kind of teamwork could be translated anywhere.
Israel’s Venture Capital Scene
