Start-Up Nation I: The IDF

Doron, our classmate and instructor

We’re back from Israel after an intense week of classes, company visits, and group exercises. We connected the lessons of “Start-Up Nation” to the realities of the Israeli start-up ecosystem and learned even more about what makes these ventures so special. In each of the next three posts, we’ll explore an aspect of the book and its relevance in present day Israeli start-up culture. We’ll then connect those aspects to individual company visits. In our last post, we’ll examine the start-up nation as it stands today – a decade after the publishing of the original book – and hopefully make some informed predictions about what lies ahead.

The Israeli Defense Forces (IDF)

Featured prominently in the book, omnipresent in daily Israeli life, and mentioned at nearly every company visit – it would be impossible to discuss the start-up nation without discussing the IDF. Israel’s mandatory conscription (3 years for men, 2 years for women) is an incredibly formative experience for so many who will go on to become start-up founders.

In most of the world, an individual can travel through life without meaningfully engaging with people outside of their social strata. While of course minor interactions are inevitable, this is likely true when considering deep, sustained interactions over a period of time.

IDF units, however, select individuals on the bases of merit and ability – not family background. This meritocratic staffing system, combined with mandatory conscription, ultimately leads to a relative lack of social hierarchies – as are found elsewhere in the world.

This is furthered by the lack of hierarchy within the IDF. Young soldiers are given leadership positions early and are free to challenge the orders of their commanding officers. Israel realized early on that it could not afford to let its military get bogged down in unnecessary formalities and bureaucracy – so it simply did away with them. As a result, IDF soldiers aren’t trained to simply accept things as they are given – it’s paramount that ideas are tested, and alternatives considered.

As it turns out, this mental framework is quite useful when considering innovation in business. Inability to see past the status quo and formalized rules of society are some of the most common barriers to ideation in business. Israel didn’t set out to create super-innovators in business – rather, it has been a naturally occurring byproduct of the IDF.

Beyond flat hierarchies and a knack for innovation, the IDF also builds the mental toughness necessary to succeed as an entrepreneur. We got a taste of just how much mental toughness is required in the IDF – as we underwent an afternoon of training (edit: light training) with former officers. Running with stretchers on a hot Israeli beach is no easy task – and we weren’t even in uniform. We can only imagine what boot camp would actually feel like.

Running stretchers full of sandbags down the beach in Herzliya

SpacePharma and Zirra

Challenging the status quo can be simple or can really stretch your mind of what is possible. For the latter, two company visits stand out in particular.

Yossi Yamin at SpacePharma has a vision of democratizing access to space. More specifically, he aims to expand access to research and development opportunities in orbit for scientists in a variety of industry. As it turns out, the microgravity conditions of space can have curious and unexpected results in the fields of pharmaceuticals and biochemistry. SpacePharma provides a vehicle through which a multitude of compounds can be launched into space as one package – allowing the various compounds (and their respective researchers) to share the cost burden of accessing orbit.

Examining a model of the SpacePharma boxes sent into orbit

Moshit Yaffe of Zirra, on the other hand, has her eyes set on Wall Street. A lawyer and former investment banker, Moshit has led Zirra as it pioneers AI-driven data analysis of company data shared across the internet. Rather than relying on technical financial data, Zirra will scrape the web for press releases, job postings, and other text-based data sources that can be fed into an algorithm that ultimately renders a buy or sell judgement. Initial results indicate that Zirra is onto something, with a sample portfolio outperforming the S&P 500 over the past 2 years.

Next Time

In our next post, we’ll examine civilian life in Israel and the socio-cultural forces that help drive a successful community of ventures. Check back soon!

Casey Buckley is a 2020 MBA Candidate at Columbia Business School

A Cuba!

Every week since late January, our group of 30 has gathered on the fourth floor of Warren Hall to discuss Cuba – its culture, its history, and its future. Led by the inimitable Professor Bruce Kogut (and his fearless sidekick, Lodovico), we have been fortunate to have been exposed to a wide range of literature and numerous distinguished guest speakers – including Provost John Coatsworth and Dr. Margaret Crahan of SIPA.

The core focus of our course – and the lens through which we have viewed Cuba – is that of an economy in transition. Our holistic approach to the subject has allowed us to explore a wide range of topics: the legacy of Spanish colonialism, the decline of the Castro regime, and a Russian case study in privatization of state-owned real estate – to name a few. We hope that a thorough understanding of Cuba’s past and the transitions of its formerly communist peers will allow us to better contextualize and assess the promise of economic reforms today.

And with that, we’re off to Havana!

Some of the questions we hope to answer over the course of the next week are:

  • How do the Cuban people view their neighbors? The U.S.? Venezuela?
  • How has life changed since the introduction of 3G cellular service on the island? What has stayed the same?
  • How do private citizens view themselves in the context of broader economic reforms? Is it a “reform or out” mentality? Or is there a “third way” between capitalism and Cuba’s communist past?

On a slightly more whimsical note, we’re also looking forward to jazz clubs, salsa dancing, and riding in classic cars. And of course, we wouldn’t be MBA candidates if we weren’t interested in any potential business opportunities down the line…

Stay tuned for answers to the above questions and more!

Casey Buckley is a 2020 MBA Candidate at Columbia Business School

The Other Middle Eastern Oil Export: Discovering Tunisian Olive Oil

Moulins Mahjoub 1.jpgEarly in the fall, my study group for Global Immersion: Doing Business in North Africa made the somewhat serendipitous decision to study the Tunisian olive oil industry for our term project. We made this choice with little information — other than that olive oil is Tunisia’s largest export and that the industry is the country’s largest employer — but I couldn’t be happier that we got to spend the trip taking a deeper look at olive oil.

moulins-mahjoub-2

On Wednesday, we spent the day at Les Moulins Mahjoub, a 70-year-old, family-owned olive oil producer about an hour outside of Tunis. Despite being a relatively small producer of 200,000 liters per year with no intention of increasing its outputs, there’s a good chance you’ve tried Les Moulins Mahjoub’s products, available in the U.S. at Whole Foods and as the house brand at Le Pain Quotidien. Now in its third generation, the business is co-owned by three brothers and seven sisters. One of the brothers, Abdel-Majid Mahjoub, who serves as the general manager, gave us a tour of the production press, explaining to us the cold press process, which still very closely resembles the ancient process.

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Les Moulins Mahjoub has no intention of increasing its production because it is happy with its position as an upscale, boutique producer.  It has no intention of competing with Bertolli, or of providing unbranded liters to European producers who will blend it with Spanish or Italian oil. Roughly 90 percent of Les Moulins Mahjoub’s oil is sold under its own brand, although the remaining 10 percent is sold under the brand (or in the case of Le Pain Quotidien, co-brand) of select partners. The company also sells Tunisia condiments, including its top product by volume, Harissa, which has recently exploded in global popularity.

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The highlight of the visit, which served as a microcosm for the industry overall, was eating lunch prepared by the family in their tasting room. We enjoyed olives and spreads, as well as numerous Tunisian dishes ranging from the familiar, shakshuka and cous cous, to the unfamiliar, breadcrumbs mixed with preserved lemons, garlic, harissa, and chickpeas prepared in broth. The third-story tasting room provided aerial views of the olive groves and farmland, which stretched into mountains in the horizon, a surprisingly beautiful setting reminiscent of Californian wine country.

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Despite its premium product, Tunisian olive oil faces two challenges in its luxury positioning: first, there’s a lot of olive oil labeled as extra virgin that isn’t in fact extra virgin; second, Tunisian olive oil lacks the brand recognition of olive oil from countries like Italy and Spain. Tunisia was featured at New York’s Fancy Food Show this year, suggesting the beginning of its improved global recognition, but there’s still a ways to go. After sampling numerous brands of Tunisian oil and spending a day at Les Moulins Mahjoub, Tunisian olive oil gained another 30 brand ambassadors in our class.

-Zoe Fox ’17

Global Immersion: Doing Business in North Africa

Tunisia’s Female Entrepreneurs

 

dar ben gacem.jpgOne of my first questions about visiting Tunisia was whether the women’s rights awarded at independence in the 1950s had an impact on society. A couple days into Global Immersion: Doing Business in North Africa and I already sense that the answer is a resounding yes.

Our first night in Tunis, before the program officially kicked off we visited Dar Ben Gacem (pictured above), a stunning seven-room guesthouse in the historic medina, city center, which is a restored 17th century home adorned at every corner by works of local artisans. But the house is only half of the story. Dar Ben Gacem’s founder, Leila Ben-Gacem, is a biomedical engineer turned social entrepreneur, who is simultaneously running a hospitality business as she works to untap the potential of Tunisia’s medina. She got her start in 2006 running training programs for local artisans, ensuring they could continue to practice their crafts as sustainable livelihoods so that the country wouldn’t lose that aspect of its heritage. Put simply, she was an incredibly inspiring woman to meet on our first night in Tunisia, making a strong case for that the country’s women are distinctly empowered.

The first official company visit was to Lilas, a paper products company, the first of its sort in North Africa. In a region lacking forests, Lilas imports pulp from Brazil and Scandinavia and produces a host of paper products that it exports across throughout North Africa and to 18 total countries on the continent. We toured its modern factories and saw just as many women working on the floors as men. But what’s more impressive is that Lilas was founded in 1994 by Mounir El Jaiez and Jalila Mezni, a husband and wife team. She, not he, serves as CEO. Though we didn’t meet Mezni, her company’s steady growth over the past two decades makes a good case for her success as a CEO in Tunisia.

It’s more than these two cases. Our tour guide told us that 62% of the country’s university students are women. The economist who presented to us at the African Development Bank was female. What feels like a majority of a group of student entrepreneurs that we met were been female. We met two successful female entrepreneurs, one who co-founded Tunisia’s first co-working space and the other who founded a sustainable agri-business, during a social enterprise panel this afternoon. The country may have its challenges, but its women are ready and able to tackle them.

-Zoe Fox ‘17

A Cuba Visit 15 Years in the Making

When I was 13, a Cuban café opened near my house. Despite living just more than 200 miles from Havana in Southwest Florida, those Saturday lunches of ropa vieja and maduros were my first real exposure to Cuban culture. Nonetheless, I’m ultimately a simple man with a pathway to my heart that runs directly through my stomach, so my interest in Cuban culture was piqued.

While food drove this interest for the next few years (colada was the first coffee I ever enjoyed), living in Miami from age 17-25 provided ample opportunity to deepen my connection to Cuban culture. From formal study of Cuban Cold War history as an undergraduate to casual learning about my friends’ experiences as Cuban American children of expats over cigars and dominoes, those nine years in Miami created an ever-growing desire to visit the island just a few miles to the south.

So on the eve of this long-awaited trip to Cuba, my anticipation is matched only by my consternation as to what comes next for the homeland of many of my Miami neighbors. While much has been made of Cuban-American détente over the past 15 months, it remains unclear if we are on the cusp of a new era of Cuban prosperity or a gradual slide into a one-dimensional, tourism-centric economy like that of too many of Cuba’s neighbors.

Over the past six weeks our class has heard from a variety of experts whose expectations range from nearly unbridled optimism to dejected acceptance of a dismal future for the Cuban economy. Now, we will learn first-hand over the next week from those on ground who can offer another perspective. We will meet with government officials, restauranteurs, hoteliers, and (of course) cigar producers among other segments of industry to learn about commerce in Cuba as it is and what the future might hold. Internet access allowing, I will post updates along the way.

While tourists across the world scramble to visit Cuba before it changes, I can’t help but feel lucky to visit as it changes. No one can say when the embargo might be lifted, or how a country steeped in nearly three generations of communism can compete in a global economy, but the opportunity to see this unfold in a country with such potential is undoubtedly exciting. And of course the fresh pastelitos won’t hurt.

 

-Mark Adelman ’16

First few days in Tunisia: Ancient Carthage, Resort Towns, Foreign Investment & Media

Salam and Bonjour from Tunis!  We arrived in Tunisia yesterday, with the 22 CBS students flying in from destinations near and far from prior winter break travels.  For those of us who arrived earlier in the day, Chazen organized a tour to the visit the ruins of Ancient Carthage, just a few miles north of the modern city of Tunis.

The Empire of Carthage, founded as a Phoenician city-State in 814 BC, was significant both politically and as a trade hub amongst the ancient empires.  It is notorious for warring with the Greeks and the Roman Republic, which culminated with the Punic wars, which were led by Hannibal, immortalized by Vergil’s Aeneid, and ultimately ended with the destruction of Carthage.

Carthage, Atlas Mountains, Mediterranean
Carthage, Atlas Mountains, Mediterranean

Corinthian Column
Corinthian Column

Remains of Carthage with Latin Inscriptions
Remains of Carthage with Latin Inscriptions

CBS at Carthage
CBS at Carthage

Following the tour of Ancient Carthage, we traveled to the summer vacation town of Sidi Bou Said, a 12 miles outside the city, for a welcome dinner.  The town is known for uniform white buildings punctuated by azure doors and windows.  Tunisia’s Minister of Foreign Affairs, currently embroiled in a nationwide scandal, was a fellow diner at the seaside Dar Zarrouk restaurant.

Blue door in Sidi Bou Said
Blue door in Sidi Bou Said

Yesterday marked the 2nd anniversary of the Revolution.  The country decided a few weeks ago to officially recognize January 14th as a holiday, and as such, most businesses closed in recognition.  In order to avoid the demonstrations in the streets, populated by Tunisians off from work, our group enjoyed the morning meandering through Hammamet, a, popular resort town outside Tunis, whose population quadruples in the summer months.  We explored the town’s medina (old city), browsing the souq (marketplace) for Tunisian handicrafts, and stopped for some mint tea, a traditional beverage, ubiquitous throughout the region, at a salon de the (café).

Salon de The
Salon de The

Hammamet
Hammamet

Coastline in Hammamet
Coastline in Hammamet

Mediterranean in Hammamet
Mediterranean in Hammamet

The CBS Group
The CBS Group

In the afternoon, the Mediterranean School of Business hosted us to meet with several individuals about the current state of Tunisia and foreign investment.  We met with Cyril Grislain Karray, former Managing Director at McKinsey and current political activist in Tunisia (interview about his new book & his 2011 TEDx speech in French); Dr. Salah Hannchi CBS ’80, former Tunisian Ambassador to Australia and Japan;  Neziha Berzouga, Offshoring Promotion Department Head at the Foreign Investment Promotion Agency; and Elias Bouricha the Tunisian country director for Predictix, an Atlanta-based software company.  Our discussions started with high-level overviews of the foreign investment climate and surplus of highly educated human capital in Tunisia and culminated with Elias presenting the specific case study of his experience as a country director for the domestic offices of an American company.

At the Mediterranean School of Business
At the Mediterranean School of Business

On Tuesday, we began the day with a Media Panel which included Kamel Labidi Head of the National Independent Authority for Information and Communication (current English recommendations report); Chawki Chahed a Communications Officer with the African Development Bank; Zied Mhirsi, founder of the first English newspaper: Tunisia Live; Hasse Zargouni, the Founder and CEO of Sigma Conseil, a media marketing research firm, and Moncef Dhambri, a university professor, newspaper editor and freelance journalist.  The panel touched upon the topics of Tunisia’s history of media censorship, current freedom of press and anti-censorship efforts, and media advertising and investment.

To sum up the historical (and arguably current) history of the country’s censorship, one of the panelists told us the following famous Tunisian joke:  A newspaper decided to interview Americans (developed country), Ethiopians (less developed country) and Tunisians (somewhere in the middle) about their opinions on the shortage of meat.  When the journalist asked the Americans about their opinions on the shortage of meat, the Americans responded “shortage…what do you mean ‘shortage’?” When the journalist asked the Ethiopians about their opinions on the shortage of meat, the Ethiopians responded “meat…what do you mean ‘meat’?” And when the journalist asked the Tunisians about their opinions on the shortage of meat, the Tunisians responded “opinions…what do you mean’opinions’?”

Until the next (freedom of press protected) post,

Yael Silverstein ‘13