Making a virtue of necessity: Israel as a startup

Today I'd like to say a few words about the State of Israel. Why Israel? Its history has been a fascinating story since it declared independence on May 14, 1948, and perhaps long before then. It's the story of a struggle for freedom by a country small in population and territory. It was often left to fend for itself, and its people knew from the experience of pogroms and the Holocaust that no one else would help them. I'll set aside the complexities of the Israeli-Palestinian conflict and the question of who's right, good, bad or ugly. My subject is what makes Israel look to me like an ideal startup. I started thinking about it after finishing The Weapon Wizards: How Israel Became a High-Tech Military Superpower.

Why this particular book? It might sound like a strictly military subject, but the opposite is true. Israel is a prime example of a startup approach. The weapons it uses and the battles it has fought, is fighting and, sadly, will probably keep fighting in the Middle East illustrate what angel investors and startups call disruptive innovation.

In business theory, a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.

Israel had 8.7 million inhabitants in 2017. Its founder and first prime minister, David Ben-Gurion, captured the problem this “startup” is trying to solve.

We have an unusual military problem. We have many enemies, and there are few of us.

Solving it would have been impossible without innovation. To name a few areas: its own nuclear development, a space program including satellite launches, drones and a missile shield that even the United States could not develop at the same cost-to-performance ratio. This made Israel a market leader in some fields, including computer security and drones.

The recipe, the key ingredients, and how they reinforce one another

The shadow of the guillotine sharpens the mind.

Perhaps the most important factor is the survival of the state itself. That runs from the declaration and struggle for independence through the Suez Crisis and the war over the Sinai Peninsula, the Six-Day War, the Yom Kippur War and the first and second Lebanon wars. Since the mid-twentieth century you won't find a decade in which Israel wasn't at war. In its first thirty years it fought fierce battles for survival against overwhelming odds. The resulting innovations had practical uses straight away.

Conscription in Israel cuts across social classes and includes both sexes. The United States, by contrast, draws most of its recruits from poorer areas, where opportunities for further education are scarce. Women serve two years and men three. Their military duties continue afterward with annual exercises of up to three weeks. The ratio of senior officers to soldiers is 1:9, compared with 1:5 in the United States. As a result, soldiers are given significant authority and responsibility at a young age. While people in Europe and the United States take longer to become independent and responsible for their own lives, in Israel it is common for soldiers under 22 to bear the burden of command and be responsible for the lives of those under them.

Many go to university and continue their education only after military service. Because military experience is so widely shared, the theory they learn in school and use later at work mingles with firsthand experience from their service. Many military innovations come straight from people's experience and needs.

Israel doesn't cultivate a social hierarchy, and neither does its military. It's quite normal for lower-ranking soldiers to bring ideas directly to senior commanders without having to pass them up the chain, one superior at a time, until they reach someone who can make a decision. They have chutzpah, the kind of nerve that lets the lowliest private walk up to a general without anyone finding it odd.

In some cultures, failure brings personal punishment, so people think less flexibly for fear that taking any initiative might jeopardize their standing. The average Israeli, though, will dare to take a risk without fear of failure.

Yaniv Harel, head of the Ministry of Defense's cyber division

One problem Israel must solve, and one that applies to any modern conflict where civilians and paramilitary groups intermingle, is how to strike strictly military targets with precision. In the densely built-up Gaza Strip, where Hezbollah fighters can pass as civilians and civilian institutions such as schools or hospitals are sometimes used to hide weapons, every strike needs surgical precision. Israel developed its own space program and launches its own satellites, but examining the images and assessing potential targets is still done by people.

In 2016 the head of the Mossad intelligence service approached a nonprofit that helps young autistic people find their place in everyday life, with an idea for involving them. They worked out that these young people could detect small changes in terrain that most people overlook. A moved bush or a minor change to a building could point to a weapons cache or launch pad.

Developing drones became a necessity after Israel withdrew from the Sinai Peninsula and Egypt took it back. Israel could not afford to keep aircraft airborne around the clock patrolling near Egyptian air defenses.

The special Talpiot training program is a story in itself. Think of it as training for the most gifted of the gifted. It admits thirty recruits a year and lasts forty months. Participants complete combat training with elite paratroopers and finish by defending a degree in physics, mathematics or computer science. They are meant to gain an interdisciplinary education and learn the military's technological capabilities so they can find unconventional solutions to problems they encounter. Talpiot graduates were behind a system for detecting cross-border tunnels and anatomical modifications to combat helicopter seats, among other things. These one-person “commandos” drove innovation across a wide range of fields.

Some things Israel does or has done fall short of strict moral standards. The conflict with Palestinians is complicated, and it can be hard to decide who is in the right in each case, especially when paramilitary units mix with the population and exploit that fact. Even though Israel uses advanced weapons and has developed what is arguably the most effective tactic for fighting in densely populated areas while sparing civilians as far as possible, innocent people still die. It's also important to recognize that Israel had the full backing of the United States for a long time and thereby gained access to technology that accelerated its own development. Today the relationship has reversed in many areas, and the United States takes cues from Israel or buys its technology and weapons.

Israel's story has been fascinating from the start. It rewards study because there is so much to learn from it.