Necessity is the mother of invention. Sometimes, to energize your innovative self, you need to be backed into a corner. In no country that I’ve traveled to is that more evident than in Israel, which is where I’ve been for nearly the past ten days. Surrounded by, unfortunately, enemies which should be neighborly countries, 8.5 million people inhabit the tiny nation. You can drive from its western Mediterranean border to the most eastern tip in just over an hour. North to south, it’s probably no more than 600 kilometers. I won’t get into the politics of this part of the world in this blog, but to summarize, it’s complicated; and many of Israel’s neighbors would like to see it wiped off the map (paraphrasing their literal words). Yet in spite of all this, Israel is known as the ‘Startup Nation,’ with a plethora of incredibly resourceful entrepreneurs and innovative companies.
Plots to bomb Israel are regularly foiled by the Mossad, its intelligence branch. From time to time rockets are blown out of the air in Gaza which are intended to inflict lethal damage on Israel and its people (I know this because I traveled to Gaza and saw some of the rockets that were recently intercepted – see picture below).
I spent two days approximately two kilometers from the Gaza Strip to take a look at a startup’s very compelling technology, test it myself and meet the team. While there, I heard a distinct buzzing noise from time to time. It came from the military drones hovering above, capable of lethal force should the need arise…
The week before my arrival in Israel, Palestinian protests erupted in Gaza, and there were some testy encounters with the two factions, so I heard.
Israel’s nearby trading partners are few and far between, so it is forced to be industrious, entrepreneurial, a global dealmaker and extremely innovative to grow its economy. Today, Israel is known around the world as the ‘Startup Nation.’
The Startup Nation’s Most Valuable Asset
Sitting smack dab in the middle of the Middle East, Israel considers itself a part of the West – amongst the leaders of the West if you ask people there. Its most populated city, Tel Aviv, is very progressive and reminds me of Barcelona in a way. Israel has a sizeable, affluent population, and its products (principally high tech) are sold all over the world. Unlike many Middle Eastern countries, Israel doesn’t rely on oil to grow its economy and finance social programs whatsoever. In fact, Israel’s top import is crude oil. What Israel counts on more than anything is the brain power and innovation of its people.
Spread all over the country, from Haifa to Jerusalem and Herzliya, I witnessed, first-hand, nearly a dozen startup technologies that could, if the companies execute on their business plan, change entire industries; and even the world in two particular cases. After spending a week touring the tech scene in three different cities, I now know why Israel is referred to as the ‘Startup Nation,’ a term coined in Dan Senor and Saul Singer’s book ‘Start-up Nation.’ There are over 400 high-tech startups in Israel today. As a result, the world’s leading tech corporations (the FAANGs), have offices and incubators of sorts in Israel.
Many Israeli startups have been bought out in recent months. Examples include Waze (bought by Google for over $1 billion), Mobileye (bought by Intel last year for just over $15 billion) and Playtika (bought by Chinese consortium for $4.4 billion), to name a few. And after witnessing what some Israeli startups are working on right now, there will be many more buyouts in 2018 and beyond. If Silicon Valley is the place to be for software startups, then likewise Israel for hardware startups.
N.B. Israel is the inventor of the drone and now the world’s biggest exporter for military purposes.
Israel’s Entrepreneurial Culture
A humorous, true story a friend of mine in Israel told me which I think articulates the ingenuity of its people: Due to the rules around kosher food, there was a law passed in the country which banned the raising of pigs for human consumption on the land of Israel. So, some creative farmers who wanted to pig farm came up with an idea… they created platforms to raise pigs that never touched the ground of Israel. True story.
With nearly the same GDP per capita as Japan — which is the world’s third-largest economy — Israel has accomplished an economic miracle. It had to to survive. A strong economy leads to a strong military and global alliances. It also prevents radicalism and desperation domestically in a region of the world where that is somewhat common. By necessity, little Israel has become an economic power, thanks to the ingenuity of its people.
Sometimes, as entrepreneurs, we get comfortable. We stop pushing and taking risks; and cease to innovate. We stop growing. If you find yourself in such a blasé state, shake things up. Put your back against the wall by inserting yourself into a situation where there will be a severe consequence for failure. Put your reputation, capital and even your future in an industry on the line. By necessity, you’re likely to excel in such a scenario, if any of those things matter to you. Israel is the poster child for this, and that’s why, against all odds, it is known as the Startup Nation.
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