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

Israel – Day 4/5 in Golan Heights and Jerusalem

Day 4 – Golan Heights > Sea of Galilee > Jerusalem
In the morning, we drove the ATVs to the Israel/Syria border. What strikes me most was the visit to the old Syrian headquarter, which is now an empty building in an area now controlled by Israel. It was my first very time witnessing ruins of wars and this made me reflect on how lucky we are to live in areas free of wars. Later we went up to Mount Bental where we could overlook both Syria and Lebanon. It was also my very first time looking at 3 countries at the same time. During our time there, there were some other UN representatives who explained to us their work at the border.

Driving the ATVs up to the Israel/Syria border
Driving the ATVs up to the Israel/Syria border

At previous Syrian HQ
At previous Syrian HQ

At previous Syrian HQ
At previous Syrian HQ

At previous Syrian HQ
At previous Syrian HQ

This is Syria!
This is Syria!

Next, we headed to the Bahat Winery and wasted some Israeli wine, and then we stopped by the Sea of Galilee. To me, although the stop was short, it means a lot to me, because when I was small I learned about all the stories about Jesus that center around Galilee. And having visited the actual sea, I could now visualize the stories.

Bahat Winery
Bahat Winery

In the evening, we arrived at the holy city of Jerusalem. At first glance, I already fell in love with the city. It reminds me of Rome with its sense of rich history, and I especially loved the Jerusalem stone which is a limestone used in almost every building in the city (as required by the law). This makes the city unique and charming. When we arrive at the highly-rated Mamilla Hotel, we were all amazed by its decor. The organizers also surprised us with a welcoming drinks during which the hotel manager briefed us on the facilities in the hotel. Many of us said that this is one of the best hotels we have ever stayed. We ended the day with a long dinner at Hasadna till 12am.

Jerusalem stone
Jerusalem stone

Welcome drinks at Mamilla Hotel
Welcome drinks at Mamilla Hotel

Dinner at Hasadna
Dinner at Hasadna – delicious!

Day 5 – Jerusalem
We kicked off the day with a visit to Yad Vashem, the Holocaust memorial. We had a very outstanding guide, who is a Jewish from New Jersey. Learning about the history in this very vivid way was heartbreaking (especially when you got to see videos of how people were killed and buried, and read about the personal stories of victims), yet this reminds everyone that we should ALWAYS learn from this lesson and NEVER AGAIN commit crime that is against humanity. After the memorial, we went to the Hebrew University of Jerusalem to meet with Professor Eugene Kandel, who detailed how Israel became a start-up nation in a broader context. Next, we visited OurCrowd, a crowd-sourcing VC fund. I especially enjoyed this visit because the presenter gave us a great overview of the VC scene with data and graphs. Coming from Hong Kong, I was surprised to learn that the company is very impressed by Li Ka Shing, the richest Chinese man who is from Hong Kong, as he invested in more than 24 start-ups in Israeli, more than any other country. The presenter made the point that, even for investors with absolutely no background in Israel or Judaism (like Li Ka Shing who is a Chinese) would understand the great potential of Israeli start-ups. After the meeting, I also had a nice chat with their investor relations manger who is in charge of the Asian clients. This meeting proved to me the best conclusion to all the meetings as it connected all the dots from previous meetings with VCs and start-ups.

Yad Vashem
Yad Vashem

Meeting with Prof. Eugene Kandel at Hebrew University of Jerusalem
Meeting with Prof. Eugene Kandel at Hebrew University of Jerusalem

Meeting with OurCrowd
Meeting with OurCrowd

In the evening, we checked out a local market. With no restaurant in mind, we just asked locals for restaurant recommendations, and we ended up with a BBQ restaurant which served outstanding steak and fish.

Jerusalem at night
Jerusalem at night

BBQ at local market
BBQ at local market

Local market
Local market

Israel – Day 1/2/3 in Tel Aviv & Air Force Base

After 16 hours of flights (transit in Moscow), I am finally in Israel!

Day 1 – Tel Aviv
While the organizers managed our expectation that the immigration process might take very long, it was surprisingly efficient with only 2 quick questions being asked by the immigration officer. Stepping out of the Tel Aviv airport, I was greeted by the beautiful Jerusalem stone and palm trees. Yes, I am now in the Middle East!

My first impression about Tel Aviv is that it very much resembles Miami in terms of urban fabrics and pace – it’s very much like a resort city! And our hotel is right by the beach that overlooks the Mediterranean Sea.

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Our study tour kicked off with a beautiful Mediterranean sunset, followed by a very delicious Israeli dinner at Benni Hadayg, with HUGE dishes of seafood and steak.

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Day 2 – Tel Aviv
Our second day started with a meeting with Mr. Gidi Grinstein of Reut Institute. Mr. Grinstein previously represented the Israeli negotiation team on the Permanent Status Agreement between Israel and the Palestine Liberation Organization in the Office of Prime Minister Ehud Barak (1999-2001). For the many of us who are extremely intrigued by the political issues in Israel, this meeting was the golden opportunity for us to ask tons of questions. Indeed, Mr. Grinstein gave us refreshing insights on Israel’s international relations and role as a start-up nation.

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Next, we toured around Rothschild Boulevard, a relaxing and local neighborhood in Tel Aviv. The tour surprised me with the very strong sense of community. As we walked around, many locals approached our Israeli tour guide Steve and asked about us – “Why are they here?” “Where are these young guys from?”. As we were crossing a road, we came across a truck that delivers flowers. The truck driver, excited about our big group visiting his neighborhood, even got out of the vehicle and gave us a big bouquet of roses (for free)! This really shows their hospitality, which I am extremely impressed of.

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After lunch at a relaxing local cafe, we visited Aleph Venture Capital on the rooftop of a 3-story building with great views of the street. Through the app Meerkat, the meeting was simultaneously video-conferenced with 40 people from around the globe. The presenter, Mr. Michael Eisenberg, is a very engaging speaker who gave us great perspectives of how it is like to work in a venture capital.

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Next, we visited Elevator Startup Accelerator. During the meeting, we met with three entrepreneurs who were working in three different start-ups. The start-up that interested me the most was the one which designs drones. The founder showed us the various types of drones and talked about the challenges, such as legal liabilities and how to sell this new technology in the mass market.

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We had dinner at a Spanish restaurant called Vicky Christina. Food quality and ambiance were outstanding. What’s more, we also had unlimited drinks including sangria and champagne. This was, hands down, one of the best dining experiences in the trip.

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Day 3 – Tel Aviv > Israel Air Force Base > Golan Heights
In the morning, we visited Rumble, which is a smart mobile management system founded by Mr. Al Azoulay, a CBS EMBA alum. Not only did he talk about how the system works, he also described the process through which he became an entrepreneur and shared tips of how to run a successful start-up.

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After the meeting, we left Tel Aviv and headed to the Israeli Air Force. The visit was very eye-opening to me because I had never learned about how a military force works. We were hosted by an officer, who is also an entrepreneur (not a surprise in Israel). He talked about the operations and showed us how Israel is very well protected by the Air Force. I particularly liked the real-life dilemma cases he showed us. This really led us to realize the many difficult situations the Air Force has to face on a daily basis, especially when it comes to life-and-death matters. After the presentation, we also got the chance to check out the F15. Unfortunately, no photo was allowed inside the base. But this is definitely one of the most interesting visits to me.

In the evening, we arrived at the Golan Heights, and we had a very delicious dinner at a steakhouse, followed by a party featuring karaoke and of course drinking.

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Karl Chan, MBA ’15

Chazen Israel: One day more!

Four months ago, I was thinking where I should go for Spring Break. Realizing this would be the last semester ever in my life, I told myself, “I should go to the most interesting place!” Browsing through the Chazen website, I saw a destination that sounds both familiar and unfamiliar – “Israel”.

Back in high school, the name “Israel” always appeared in bible. When reading news, the conflicts in the Middle East have also always brought “Israel” into my mind. In business school, whenever people talk about start-ups, “Israel” is almost always mentioned.

So this country name does sound extremely familiar, but did I know anything more? Not quite. Having done some preliminary research, I found out that Israel, despite the small size, has a lot to offer – beautiful beaches, rich history, vibrant nightlife, delicious food, intriguing political context and ambitious companies. Yes, the country appeals to everyone!

Without doubt, I signed up for the tour. Four months later, I am now soon on my way to my very first trip to the Middle East!

The trip organizers Daniel, Adi & Rachel gave us a great pre-departure session last week. Looking at the itinerary, every item seems to be great fun, but I am especially looking forward to the following:

  1. Bamba (a peanut butter-flavored snack from Israel)
    *Introduced by the organizers. Check out the video “Americans Try Israeli Snacks“. 
  2. Dinner at Vicky Christina 
    *Yes, food again. I checked out all restaurants in the itinerary and this one looks especially good!
  3. Drinks included every night (!!)
    *Seems like unlimited drinks are included in almost every dinner…very impressed!
  4. Dead Sea
    *I still can’t imagine how I can float in water…
  5. Golan Heights
    *Heard from previous participants that we could see Syria from there?
  6. Company visit: Rumble
    *Start-up (mobile app management) in Israel. 
  7. Yad Vashem
    *To learn about the Holocaust. 
  8. Camel ride
    *Self-explanatory!!

As an organizer of two previous Chazen trips, I perfectly understand how heavy the workload can be. Thus, here I’d like to thank the three amazing organizers once again for putting together such a great itinerary. I was also pleasantly surprised that each participant got the book “Start-up Nation,” which would be the best reading in the long-haul flight.

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Tel Aviv, see you in a bit!

Karl Chan, ‘MBA 15

Final Destination: Golan Heights and my Reflections on Chazen Israel

Within the narrow and long country of Israel, there is a variety in terms of landscapes, architecture, culture, and yet the people in every city as extremely warm, friendly, and humble! After being in the metropolitan city of Tel Aviv followed by natural beauty of Dead Sea, and the charm of ancient city of Jerusalem, we traveled north to see the Bahai Gardens briefly, and go further to Golan Heights, a very peaceful place given its close proximity to the Syrian border.

Bahai Gardens exist in many parts of the world but have a sense of consistency that follows each one of them. As you can see from the picture below, they are extremely well kept, symmetrical, gorgeous, and peaceful places.

Bahai Gardens
Bahai Gardens

Our next stop was Golan Heights, which was the most calm place for where it is situated. We stayed in Kibbutz, which has cottages surrounded by natural beauty of mountains and are self-sufficient. These cottages are mostly for locals, while a few are reserved for tourists who come to visit. I was keen to learn more after coming back and you can read more about it here.

Golan Heights Kibbutz

Golan Heights Kibbutz

All of us got to explore Golan Heights in a really unique manner by driving ATVs or horse riding on the mountains. The views and experience for everyone was unmatched anything we’ve done before. The tour guides explained significance and proximity to Syria, and talked about how safe everyone felt in the community. I did the horse riding and was completely blown away by the beautiful landscape, as every moment of this was stunning and serene. While horse riding, we had some hilarious moments of bonding when one of the horses refused to cooperate and started eating grass every time we would stop for a few seconds. Also, we had a dog who was leading the group of horses along with the tour guide, which was really funny to observe.

#CBSatthecenter of hiking in ATVs

#CBSatthecenter of hiking in ATVs

Horse riding very close to the Syrian boarder in Golan Heights
Horse riding very close to the Syrian boarder in Golan Heights

Our next stop was Golan Height winery, where we got a tour from this really adorable old man about how the wines are made, what process and barrel are used, and why. Many of us were thinking back to our operations and finance class cases on wines. The wines were delicious and a great end to incredibly amazing trip!

Golan Heights Winery
Golan Heights Winery

After a 3 hours bus ride, we reached Tel Aviv and met at the beach right before sunset to reflect on the best moments of the trip while toasting with our Golan Heights’ champagnes! We went around to talk about some of our best memories, which included:

BEST PEOPLE: meeting some of the best people at CBS and feeling like we had just made a really close group of amazing friends for life. Most of us did not know each other and this trip really helped us bond and get to know each other so well! I would also say that I didn’t know our trip planners, Yoav or Guy, very well before this trip and seeing the country through their eyes, asking them questions and their opinions, and getting to know them was one of my favorite things!

MOUTHWATERING FOOD: we LOVED the food, every meal was delicious, fresh, unique, and one of the most fun bonding experiences. Apart from the food, the ambiance of the places we visited, and the exclusivity and opportunity to have us take over the place made the experience memorable. My favorite was when all the chefs came out and created our very own dessert table by dancing and throwing various flavors of ice cream with toppings and fudge on a table covered with aluminum foil! It was spectacular and SO delicious!

PLACES: From the Dead Sea to holocaust memorial, the Old City of Jerusalem to Golan Heights, the Bahai gardens and air-force base, and everything in between, we were pleasantly surprised and shocked by the beauty, significance, and history of each place we visited. I was in awe each time, and every place after surpassed by expectation. I learned so much, not only through our visits and speakers, but also by learning about the places and having conversations with my peers afterwards.

Reflections
Reflecting on our last day by the beach

For most of us, this trip was the first time in the Middle East and in Israel. Even for those re-visiting some of these places, they said the city never fails to be magical and teach them something new. This trip has been one of the most memorable of all my travels and inspired me to go back to Israel to explore more.

Aditi Sahani ’15, Chazen Israel

 

Magical Moments in Jerusalem

From the new metropolitan city of Tel Aviv, we headed in our bus towards one of the most powerful museums I have ever visited: Yad VaShem, the Holocaust Memorial.  It is built with the vision that people will never forget what happened by gaining a good understanding, and coming out of the museum hopeful about the future of the country rather than angry. We had two tour guides, who walked us through the museum in chronological order, sharing stories and pointing us towards the minute details of how each transition over 4.5 years is reflected in the physical ambiance, and describing the brutal murder of 6 million innocent Jews. Although most of us have read books or seen movies about the Holocaust, as we walked through each exhibit, we felt chills down our back and the expressions on our faces were unable to accept the reality of inhumane treatment in the concentrations camps. I found it extremely informative and emotionally challenging. But it was illustrated to evoke emotions and sentiments and I was glad we could visit for a few hours as it put a lot of things in perspective regarding the struggles and strengths of Israelis.

Our next stop was Jerusalem, which was one of the most anticipated parts of our trip due to the history and beauty. As we drove, we could see how all of the architecture looks the same and all exteriors are made of a particular type of stone. We stayed at the beautiful Mamila Hotel, and our afternoon began with a crash course on Israeli Economy. We got to meet with the Economic Advisor to the Prime Minister, Eugene Kandell, and the Mayor of Jerusalem, Nir Barkat at the city council. I was really captivated by both of their presentations, their enthusiasm, belief in Israel’s human capital and the determination to grow, scale, and be self-sufficient by playing on the strengths. I loved when the Mayor talked about being a brand manager for the City of Jerusalem, taking initiatives that may not have been thought about before by treating the city as a product.

Nir Barkat – Mayor of Jerusalem

The next day, we began with a trip to the Dead Sea, which was so much FUN as you can see from our picture below! It was an incredible experience floating in the water, unable to swim, and being surrounded by mountains and gorgeous natural beauty. We got to rub mud that is supposed to be full of minerals and oils all over and have a mini competition on who does it best!

Dead Sea: #CBSatTheCenter of Beauty
Dead Sea: #CBSatTheCenter of Beauty. Photo Credit: Leslie Pebbles

Our incredible Israeli hosts, Yoav Rand & Guy Rejwan '15, relaxing at the Dead Sea
Our incredible Israeli hosts, Yoav Rand & Guy Rejwan ’15, relaxing at the Dead Sea

After our memorable visit at the Dead Sea, we finally headed for the tour of the Old City of Jerusalem, an ancient place that is considered holy for Jews, Christians, and Muslims. Our tour guide was immensely valuable as he shared a ton of stories about each ethnic quarter, significant religious memorials, and stereotypes. It was an immersive experience watching the locals, the businesses, and the tourists all hustle through these ancient streets that I had only seen in pictures before.

Old City of Jerusalem
Old City of Jerusalem, Photo Credit: Mimi Vavilala

As I mentioned in my earlier posts, one of my favorite things about this trip was surprisingly delicious meals and really fun restaurant experiences. Our dinner at Machne Yehuda, a hip and trendy restaurant, surpassed all expectations and toped off the night. We had the place booked to ourselves, and what slowly started as dinner, turned into a dancing night with some of the popular songs of 1990’s and 2000’s. We also had a birthday celebration, where 6-7 of the chefs came out and created a dessert table with the BEST ICE CREAM SUNDAY I have ever had! It was truly an experience as none of us knew what was going on as the chefs danced to the music beats and within 2 minutes created what you see below in a long rectangular table covered with aluminum foil! Dessert was followed by more dancing and celebrations of all of us being in Jerusalem for our last night before we hit the road again the next morning!

Dessert Table Experience with Ice Cream Sunday created in front of our eyes
Dessert Table Experience with Ice Cream Sunday created in front of our eyes

Aditi Sahani ’15, Chazen Israel