Just finished the Start-up Nation by Dan Senor, Saul Singer.
I would say it’s an Israeli XXI century version of Max Weber with his The Protestant Ethic and the Spirit of Capitalism meets Antifragile: Things that Gain from Disorder by NNT sparkled by Triple Package by Amy Chua. Or, more broadly, how ethics and culture could positively or negatively impact economic growth.
I’ve had a privilege to meet and talk to many Israeli entrepreneurs and business people and could wholeheartedly agree with many of the book’s statements and representations. Israelis are indeed very tenacious in business, not at all hierarchical, thrive dealing with ambiguity, comfortable with risk-taking, open to new ideas, challenge everyone all the time, don’t worry about saving face, and never operate in professional silos, because they don’t know silos exist.
I often vet new PayPal business customers, and Israel brings more unusual cases (in numbers and in the level of craziness) than anybody else.
A little anecdote from the book:
Four guys are standing on a street corner… an American, a Russian, a Chinese man, and an Israeli…. A reporter comes up to the group and says to them: “Excuse me…. What’s your opinion on the meat shortage?” The American says: What’s a shortage? The Russian says: What’s meat? The Chinese man says: What’s an opinion? The Israeli says: What’s “Excuse me”?
The book suggests that an important contributor to Israelis’ success in entrepreneurship is military training, especially if you serve in one of the prestigious military or intelligence units. Apparently it’s very competitive and incredibly hard to get there, which make it a great honor, to be selected by one of the prestigious units, similar to Ivy League Colleges applications. Once you are in, it’s not only a great experience of decision-making, people management and responsibility very early on in your career, it’s also a precious resume and network builder – for life. It’s even suggested that many businesses only take alumni from certain military units and would never employ a non-veteran. Military service plays a role of a merit-based social elevator.
There is no leadership without personal example and without inspiring your team to charge together and with you. There is no leaving anyone behind. You have minimal guidance from the top and are expected to improvise, even if this means breaking some rules. If you’re a junior officer, you call your higher-ups by their first names, and if you see them doing something wrong, you say so.
This is where I stumble a bit. Obviously, if the rules of the game demand that you need to prove yourself in the military and you are ambitious, you’d do whatever it takes. But at the same time, it’s not a bootcamp, it’s an actual military service, where you risk your life and could get killed or handicapped or whatever they mean by PTSD. Why the society hasn’t developed an alternative elevator? Going to war and risking your life is a bad idea, and the thought of teenagers linking their after-school dreams and aspirations with military units for 2-3-4 years, is … very foreign.
Russia and its military service is obviously a totally different dimension, but even there the survival instincts prevail and, as far as I hear, almost everyone with any intelligence or some money is able to cheat their way out of military service.
The book suggests Israel has no choice whatsoever, which may be true. But it’s still hard to accept that military service is good for building a character at the age of 18.
Another puzzle I am trying to solve about Israel is how it is possible for one country to combine very progressive regulatory framework for tech start-ups and very conservative, rigid and oftentimes outdated regulations for many other areas, such as finance, retail, taxation, currency regulations, or banking.
I will be thinking about it in the next weeks and months.
Some of my favorite highlights:
An interesting idea how to tell bad guys on the internet from the good guys:
We believe that the world is divided between good people and bad people, and the trick to beating fraud is to distinguish between them on the Web… Good people leave traces of themselves on the Internet—digital footprints—because they have nothing to hide… Bad people don’t, because they try to hide themselves. All we do is look for footprints. If you can find them, you can minimize risk to an acceptable level and underwrite it. It really is that simple.