A Closer Look at Start-up Nation: Prologue

The author’s copy of the text (feat. half a pad of mini post-its)

Fifty MBA students from Columbia and Interdisciplinary Center (IDC) Herzliya met up tonight in Tel Aviv to kick off a week-long intensive course, “A Closer Look at Start-up Nation”. Inspired by Dan Senor and Saul Singer’s 2009 book, “Start-up Nation: The Story of Israel’s Economic Miracle”, the 5-day course will introduce students to individuals from all areas of Israel’s innovation ecosystem – from start-ups and research and development (R&D) divisions of multinational firms to venture capitalists (VCs) and business-focused non-profits. We hope to take away valuable learnings about the genesis of Israel’s start-up culture, how to work with Israel’s high-tech industry, and – more broadly – how a cluster of factors can lead to innovation-rich geographies such as “Silicon Wadi” (the Israeli “Silicon Valley”).

Israel leads the world in per capita R&D spending – benefitting from both the R&D divisions of large multinationals such as Intel, Google, and Microsoft as well as a high concentration of start-ups. Outside Silicon Valley, Israel claims the top spot in per capita start-ups and is also the world leader in per capita VC investments. Not confined to early-stage ventures alone, Israel has more companies listed on Nasdaq than Korea, India, and Japan combined.

The book, for those who have not had the chance to read it, does a wonderful job of weaving together the aspects of Israel’s history and sociopolitical structures that contribute to this innovation-rich environment. As an example, the book explores the non-hierarchical nature of Israeli society and how a willingness to challenge the status quo leads to more innovative thought and design. Mandatory conscription in the Israeli Defense Forces (IDF) serves to enshrine egalitarianism as a societal value and instills a mission-driven culture amongst citizens. Lastly, on a cultural note, failure is not viewed as shameful but rather as an aspect of growth and development in life. While each of these conditions may be found in a number of societies, the book argues that it is the union of these factors that has allowed Israel to become the high-tech powerhouse it is today.

This blog will view the course through the lens of Senor and Singer’s text – providing updates on the latest decade of Israeli start-up development as well as supplementary learnings related to the themes found in the book. It is our hope that, through careful evaluation of this confluence of factors, we can identify the most crucial aspects necessary to build a culture of innovation – and what competitive advantage, if any, can persist for Israel’s high-tech sector in the long-run.

Casey Buckley is a 2020 MBA Candidate at Columbia Business School

Final Thoughts on Israel

Wrapping up the Israel Chazen Study Tour, here are the five biggest pleasant surprises I came across:

Coffee: From neighborhood cafes to national chains like Aroma (note: it is the Israeli version of Starbucks, and they have a branch in SoHo too!), coffee in Israel never disappointed me. You might not expect that coffee is an Israeli specialty, but many of us were very impressed by the quality of coffee here (much better than the US!), thanks to a different type of milk and coffee bean.

Cats everywhere: Israel might well be a paradise for cat lovers. We found cats in almost single restaurant we went to, and this definitely enhanced our general dining experience with cute cats being our accompany!

People’s passion for the country: From taxi drivers to random people on the streets, locals here are very eager to learn about our experiences in Israel and make sure we are having a good time. We have been greeted with “Welcome to Israel!” in almost all conversations I have had with shopkeepers, waitresses and hotel staff etc. Their passion is of course legitimate – who would not fall in love with a country that can offer so many different things to do for visitors?

The Election: the prime minister election took place during our trip. It was certainly a big, big day in the country. Our tour guide and organizers were all extremely passionate about it, and it seemed like everyone was talking about the Election Day. Such high level of political awareness impressed me a lot, and made me wish I had the right to vote for the PM too!

Israel’s commitment for humanity: Everyone knows Israel is a start-up nation that the number of start-ups per capita is the highest in the world. However, from our company visits, I had the impression that the country’s passion for start-ups is not merely for money. Rather, Israeli people have a more noble vision: they want to change the world and contribute to the human race. Their entrepreneurial spirit and risk-taking attitude is truly inspiring, and in fact, given the small yet developed market in Israel, it is a perfect environment for companies to test out innovative ideas, which can subsequently be applied to the world. It is thus not a surprise that most tech giants like Google and Sony set up R&D centers in Israel.

To conclude, for me this Chazen trip to Israel is not just about learning about a foreign culture or visiting historical sites. Rather, my biggest takeaway was what I learned from Israeli’s passion – for the country, and for humanity. They taught me that even in adverse environments, as long as we dare to risk and be persistent, miracles can happen, just like how Israel has become an economically powerful and influential country in just 60 years, despite the frequency of wars and unstable geopolitical situation in the Middle East.

Last but not least, I must thank our three organizers Adi, Daniel and Rachel, our faculty advisor Professor Kalay and our tour guide Steve for making this trip such a successful and inspiring one. They showed us the best of Israel in just a week, and all of us had such an amazing time here.

Israel, goodbye for now, but I will definitely come visit you again sometime in the future!

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

Venturing North: Haifa and the Golan Heights

Whenever I travel to a new country, I always appreciate it when I have the time to venture outside of the capital city and witness a contrasting experience of life there.  We’ve had such an opportunity in the second half of the Chazen Israel trip, in which we stopped in the industrial city of Haifa for several hours, followed by an evening at a kibbutz and a morning of exploration at Golan Heights.

Our first stop was a visit to Elbit Systems, the biggest private defense company in Israel with revenues of $2.8Bn, 13,000 employees worldwide, and a lot of R&D and international growth.  Tomer Goldberg ’13 had worked there before school and the company’s portfolio includes airborne systems, unmanned vehicles, homeland security, EW & countermeasures, ISR & EO systems, combat vehicle systems, and naval systems.  The presenters shared an in-depth view of their unmanned air vehicle systems, which have applications such as patrolling long borders to identify penetrations, scanning an area for targets with a radar, or moving target detection; in other words, helping the military to attain better “situational awareness.”  They also demonstrated their Helmet Mounting System, a high-tech helmet with display, tracker, and electronic unit to help pilots target the enemy by maneuvering their heads instead of the entire aircraft, and to also monitor the pilot’s health while in flight to help avoid unnecessary tragedies.  The company has made strategic decisions to focus on the defense market and concentrate their efforts on certain markets by operating as a “multi-domestic” company in the countries where they have contracts; they are also conscious of the relationships they build with their clients and won’t, for instance, take any clients from China given their huge business in the United States.

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After visiting Elbit Systems, we stopped by the Baha’i Gardens, a beautifully landscaped garden and memorial to one of their founders buried there (and a UNESCO World Heritage Site).  The Baha’i have a small, transient community in Haifa that comes to the city to study and tend the garden, although they are not eligible for Israeli citizenship.  From our scenic lookout, we were able to view the large port and the coastline facing north towards the Lebanese border.  Haifa was hit by a number of rockets from Hezbollah, but from what I read and heard from our guides, the city, which is home to many international companies, kept operating through the attacks and this hasn’t stopped significant foreign investment.

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Next, we visited the Church of the Beatitudes, overlooking the Sea of Galilee.  The view was beautiful but even more remarkable is that these are the spots where in multiple accounts in the Bible, Jesus delivered the Sermon on the Mount, walked on water, and performed much of his ministry.

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We arrived in Golan Heights in the early evening and spent the night at a kibbutz, or collective community traditionally based on agriculture (today, they typically have at least one factory or other businesses – this one had developed a number of tourist activities).  Many innovations have developed at kibbutzim and although only 2% of the population lives on them, President Shimon Peres mentioned in his speech that they produce 7% of the country’s GDP. Our itinerary included cozy accommodations and delicious food produced at the community, a dance party on a hill, driving ATVs in the nature preserve, and visiting the eerily calm Syrian border (UN operations in the area are uncertain due to the recent kidnappings) one mile from the kibbutz.

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As an aspiring wine connoisseur, I personally really looked forward to our visit to Golan Heights Winery.  The winery is one of about 250 wineries in the country (90% of them are in this region), most of which are small boutique operations, but this one produces about six million bottles per year and has won a number of different awards.  We toured the facilities, learned about the winemaking process, and sampled Riesling, Cabernet Sauvignon, and Moscato wines.  The tour guide was engaging and informative for anyone wishing to order wine in a business situation, store it, and open it properly, and also shed light on how to make kosher wines and manage an operation such as this in accordance with the Sabbath.  The winery staff doesn’t work on the Sabbath, and it was also interesting to hear that every seven years, they take a sabbatical in which they do not plant more vines and there are some limits to the amount of pruning that they can do.  Everyone that I talked to really enjoyed the wines and I think that we would agree that Golan Heights Winery is definitely worth a visit if you’re in the area.

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We returned to Tel Aviv for a couple of days and the group is mostly in the process of heading home to New York City now.  I’ll send a final report on the other side!

Krista Sande-Kerback ’14

Banking, Technology, and Politics in Israel

The Chazen Israel trip is off to a packed and fascinating start!  In the first two days, we’ve participated in an event with the president of Israel, visited a pharmaceutical plant, solar power startup, energy company, bank, and venture capital firm, met local CBS alumni and admitted students, explored the nightlife, and of course eaten lots of local food.

At our first meeting at Hapoalim Bank, Chairman Yair Seroussi talked with us about the Israeli economy (GDP was 3.3% in 2012, with a budget deficit of 4.2%) and the banking climate.  One of the significant challenges facing Israel, in his view, is that young people are highly leveraged and housing is very expensive – in fact, there were demonstrations last year around this issue. In terms of the banking industry, he mentioned that many of the larger banks are leaving some of the regions where they are operating and are focusing on their core markets; Hapoalim’s strategy in response is to try to be the market leader domestically and a niche player internationally, particularly where there are large Jewish diasporas.  Ultimately, Seroussi feels that “the challenge of banks in the future is the balance…between the [traditional banking] structure and new technology.”

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The next stop to Teva Pharmaceuticals, a 111-year old Israeli company focusing on generics and its flagship drug Copaxone with $20.3Bn in revenues, was a new kind of experience for most of us.  Teva has 73 manufacturing sites in 60 countries and is experiencing significant growth globally (it currently produces 6 billion tablets and capsules annually). We had a conversation with one of the managers and then donned white lab coats and booties in order to enter the manufacturing facilities.  It was fascinating to watch pills go through the various stages of the manufacturing process and to go into a fully automated warehouse where the packages were being moved around by various types of robots.

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Getting an audience with Israeli President Shimon Peres that evening was a particular highlight – and we were lucky that he kept the appointment, given President Obama’s visit to Israel this week!  Peres is an impressive speaker and consummate politician (particularly at almost 90 years old).  One of his key takeaways was that the greatest challenges facing the country are “tradition on one hand, and innovation on the other” and he stressed the importance for Israel of “studying the unknown future” as opposed to just the past.  Overall, I enjoyed the event and was happy to be interviewed about my impressions so far by a local organization that is working to bring more MBAs to experience Israel.

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Tomer Goldberg introduces President Shimon Peres (photo credit: Anton Chtcherbakov)

Our second full day was devoted to visits to Pitango, a venture capital firm, Noble Energy, an American firm that recently made some huge natural gas finds off the shore of Israel, and Solar Edge, a late-stage startup that developed a DC power optimizer to make solar panels more efficient and “captures more data per second than the biggest bank in Israel.”  Among other things, we learned that there are about 4,850 startups in Israel, and government initiatives help to promote high tech; Pitango co-founder Rami Kalish got his first chance through a government support program for high-tech in which they picked qualified managers and would invest 8M in the venture, provided the company got an additional 12M investment.  The meeting with Noble Energy was fascinating as they’ve recently discovered large offshore natural gas reserves and gave us a detailed explanation of how they found and process these resources.  It’s a rare for a country to suddenly find these resources in a company that already has a high-tech sector and now needs to integrate this into the economy, and it will be interesting to see if they or their competitors make additional large discoveries.

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CEO and Chairman of SolarEdge Guy Sella shares his entrepreneurship story as well as a technical explanation of solar panels

Trip organizers Guy and Tomer credit our ability to obtain these meetings and experiences to the power of their Columbia Business School as well as their military networks.  Military service is compulsory in Israel, and our speakers have frequently cited this as a formative experience for them personally and something that has made Israelis in general more informal with each other, willing to pitch ideas, and open to taking risks.

We’re now in Jerusalem for a tour of the city’s historical sites, which has been a profound and fascinating experience for much of the group.  More to come in a couple of days!

Krista Sande-Kerback ’14

Getting Ready for Chazen Israel

Spring break is finally here!  I’m starting my first blog as official “social media guru” from a Turkish Airlines flight after spending a day and a half in Istanbul with two friends from my cluster, and am looking forward to meeting up with the Chazen Israel group in Tel Aviv.

After a busy spring semester so far, there is a lot to process.  As everyone at Columbia Business School knows at this point, we said farewell to a beloved classmate, DeShaun Maria Harris ‘14, last week after she passed away unexpectedly of a brain aneurysm.  This loss is a profound lesson for many of us to “live life to the fullest” that we would have preferred to be reminded of in a different way.  DeShaun was on my learning team, so I feel particularly privileged to have gotten to know her well and learn a significant amount from her in a short period of time.  Just a week earlier, we had caught up at length during happy hour, sharing our hopes and excitements for our campus involvements and summer internships.  As I’ve been going through the various stages of grief, it still hasn’t fully sunk in that she’s gone – I can just picture her face, her smile, the sound of her voice so vividly (and a wonderful trip that we took to New Orleans as a cluster, below) – but I’m just grateful to have had that time with her.

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DeShaun was also a blogger for the Chazen India trip in January, and she shared some beautiful stories and pictures about her experience HERE.  She certainly sets the bar high for me.

Anyway, the trip organizers, Guy Soreq and Tomer Goldberg, have put together a tremendous itinerary for the group, and here is some of what we have to look forward to in Israel:

  • Meeting the President of Israel, Shimon Peres
  • Meeting with Stanley Fisher, the Governor of Bank of Israel
  • Visiting several companies, including Teva, Pitango, Noble Energy, and Solar Edge
  • Socializing with recently admitted students and alumni
  • Visit to Hagolan Vineyards
  • Hiking in the Golan Heights
  • Siteseeing in Jerusalem, around the Dead Sea, and in the West Bank

More to come soon!

Krista Sande-Kerback ’14

Follow me on Twitter: @kristasande