How Israel Has Become the Start-Up Nation

Over the past decade Israel has emerged as a one of the world’s leading technological giants. Remarkably, despite its small size, Israel ranksranks first in the world in venture capital investments as a percentage of GDP and first in R&D investment. It is home to 10 Nobel Prize laureates and a pioneer in industries ranging from biotechnology to financial engineering. Bill Gates described Israel as the “country (relative to its population) that has done the most to contribute to the technology revolution” and Warren Buffet vouched for Israel’s “brains, energy, and integrity.”

Dan Senor and Saul Singer first brought to light the uniqueness of Israel’s start-up economy in their 2009 bestseller “Start-up Nation.” More recently Google’s acquisition of Israeli start-up company, Waze, for more than a billion dollars has furthered this fascination. Many foreign companies have been pouring money into Israel while trying to understand how Israel has been so successful in creating an atmosphere conducive to entrepreneurship and innovation. Even many foreign governments, such as South Korea, have been trying to understand Israeli culture in an attempt to attract jobs in high-paying, hi-tech industries.

This summer, five other Harvard students and I along with 35 students from other American universities participated in the TAMID Fellowship, which aims to connect Israeli and American businesses by sending Americans to Israel to intern at Israeli companies. I wanted to work at a start-up company as opposed to an established American company with offices in Israel, to experience the Israeli start-up culture first hand. I wound up at a small Tel Aviv financial services company called “I Know First” with fewer than 10 employees. I Know First uses an algorithm to predict movements in the stock, currency, and commodities markets.

When I first started, I expected to be tasked with writing insignificant internal memos and creating PowerPoints. I never expected anyone would pay much attention to my suggestions and advice. However, on the first day, the CEO, Yaron Golgher, sat down with me and explained his short-term goals for the company. He had me analyze the data and published my conclusions on the company’s main website that very day. When I came to work the following day I suggested a few ways to improve the user interface of the I Know First website. Not only did the CEO listen to my suggestions, he also told me that if I were interested I could have complete freedom to redesign the company’s LinkedIn page as well as an entirely new ancillary company website. Later that week I was asked to write a press release about the company and Yaron sent the article to be published under the company’s name to Seeking Alpha, a financial website.

Many people attribute Israel’s success to its world-class engineering schools, the military experience of its workforce, and its habitually challenging geopolitical climate, but I believe it is the Israeli openness to criticism and new ideas, respect for initiative-takers, and its culture of helping others that are the more important factors to consider. Yaron encouraged me to challenge the existing image of the company, listened to my ideas that were unrelated to my original task, and encouraged me to reach out to my friends at venture capital firms to drum up interest and connections.

The neighborhood where I worked, the Tel Aviv Port, is a hub of start-up companies and budding entrepreneurs. The main office of Wix, the hyped-up website builder, is less than a block away. Every restaurant in the area is teeming with entrepreneurs touting their products and handing out contact information. When I went out to lunch with my colleagues and other Israeli entrepreneurs in the area, everyone at the table was well informed about the latest start-up companies and had an overall sense of national pride. It was apparent that so many Israelis saw the success of Waze as a national success, not just as a victory for one Silicon Wadi company. It seems to me that Israel’s constant struggles and concurrent need for purpose and meaning drives people to work together, transfer ideas, and connect each other to those who can further help their companies.

In the two months I worked in Tel Aviv, I learned that regardless of which factors are most influential in contributing to Israel’s rapid technological growth, an openness to new ideas and a sense of national pride would be of help to any country. Perhaps America can adopt some of Israel’s receptivity and helpfulness. Maybe our corporate culture should at times abandon its hierarchical structure and impractical competition to create a more accessible and cooperative workplace where new ideas can be freely suggested and workers can feel they have a meaningful voice.

Ethan S. Fried ’16, a Crimson editorial writer, lives in Eliot House.