Start-up Nation: Investing in People, Not Oil - 27
One of the best books I've ever read was No Room for Small Dreams by former Israeli Prime Minister Shimon Peres. There's one chapter from the book that really opened my eyes. For years, many Israelis lamented the fact that we don't have any oil. Many of the countries that surround us are oil-rich, but thus far, no oil has been discovered in the Holy Land (we recently discovered natural gas off our northern coast). But Peres saw that as a blessing!
We didn't have land nor water. We didn't have neither gold nor oil. We couldn't make a living.
So facing the absolute nothingness, we looked for a way out, and we discovered that one resource is still available. The human capital, the human resource. We found that people can contribute more to the land than the land can contribute to the people. So we discovered and built two new things: a new agriculture which is based on high-tech, and we produced our own weapons to defend ourselves.[i]
Peres writes in his book about how Israel became the "start-up nation."
"With a little more than eight million people, we have become home to more than six thousand start-ups, the highest density in the world. How did this happen? How did we start up a nation from nothing and transform it into a nation of start-ups? The answer lies in a paradox: having nothing was at once our greatest challenge and our greatest blessing of all. Without natural resources, our hopes were tied to our own creativity."[ii]
In 2008, The Great Recession wreaked havoc not only on the American economy but economies all over the world. One country that was not affected was Israel. A couple of things kept us safe:
We don't make bad loans. In the U.S., before the recession, you could borrow 110% of the value of your property. In other words, not only did you not need a down payment, you got paid to get a loan! In Israel, you cannot get a mortgage without 30% down. On the one hand, it makes it very hard to get a mortgage because real estate is very expensive. But if you do manage to put down 30%, they know that you are good to pay it off.
Secondly is our tech industry. "[Israel] was spared the economic beating America and many other rich countries took. High-tech and biotech, Israel's top industries, are booming, and many global firms now have a presence there, driving demand for college-educated English speakers."[iii]
Some of the start-ups that have come out of tiny Israel that you may have heard of are Waze, Wix, and Fiverr (I have used all of these apps). ICQ (I seek you) became AOL's instant messaging, and it was invented in Israel. Intel has offices in Israel, and in fact, Gil Afriat, the senior pastor at Tiferet Yeshua (he replaced me in 2016), has a great job at Intel, where is still works a few days a week.
Israeli Defense Forces
In Start-Up Nation, a book about Israel's incredible ingenuity and creativity in starting tech businesses, the authors credit the lessons that Israelis learn when they serve in the Israeli Defense Forces. When you live in a country that is surrounded by mortal enemies, it takes a certain amount of courage to survive. Israel has not only survived, but it thrives!
In the IDF, you are taught to never give up. Even when you are in the most difficult of circumstances, you are taught to be creative and not collapse. That carries over into business. It's why Israeli entrepreneurs are able to do things that nobody ever thought were possible. Listen to Asaf Toker, CEO of SeeVoov, a video-based trip-planning platform.
Though it's not what may spring to mind when one thinks of personal creativity and freedom, Toker credits his time in the Israel Defense Forces (IDF) – military service is compulsory for the majority of Israeli citizens – for giving him the tools to enter the start-up game. With 80 soldiers reporting to him when he was in his late teens, he had to quickly find his feet as a leader. "We all have to go into the army, and there you learn how to improvise," Toker says. "You learn how to find solutions when you have a problem, and you don't have the means to solve it – you need to think outside the box!"[iv]
This also translates in our military defense industry. One of these weeks, I will write about how the Iron Dome was developed. But I will tell you this, the main person behind it was told over and over again that a short distance missile defense system was simply not possible. Yet, he didn't give up. He searched for funding, and in the end, we have a defense system that has saved probably thousands of lives. Not just that, it has prevented widescale war. If Hamas was able to make direct hits inside of Israel, our response would be fast, furious, and fatal. The Iron Dome has probably saved more Arab lives than Israelis because we have not had to respond.
While other nations have natural resources, we decided to invest in people. As a result, the oil-rich Arab nations that surround us are not winning Nobel Peace Prizes in math or science. Most of them focus on religious indoctrination over education. Who would believe that a tiny little nation like Israel would send a rocket to the moon? Yes, it crashed upon impact, but all the excitement around it has created a whole new generation of teenage scientists determined to make it land! Success breeds success. When other Israelis see their countrymen succeeding, it makes them want to be innovative.
And that's why they call us the Start-up Nation!
[i] https://time.com/4224947/exclusive-shimon-peres-on-peace-war-and-israels-future/ [ii] Shimon Peres, No Room for Small Dreams, p. 145 [iii] https://www.reuters.com/article/us-usa-economy-israel/some-american-jews-sit-out-recession-in-israel-idUSTRE6274J220100308 [iv] https://apex.aero/articles/startup-nation-israel-become-silicon-valley/