Israel is home to the highest concentration of startups outside of Silicon Valley. So numerous and successful are these upstart businesses that Israel has been dubbed "Startup Nation", an epithet first coined by Dan Senor and Paul Singer in their 2009 book of the same name. But if Silicon Valley is known for its nerds wearing hoodies, Startup Nation is better known for its stern professionals with military backgrounds.
In Israel, public service, most commonly in the form of military service, is a requirement of all Israelis when they turn 18. The result is a populace that shares a common ethos, one that has empowered many entrepreneurs to take big risks and achieve great things. Israel has the most companies listed on the NASDAQ of any foreign nation.
What is it about military service that translates to entrepreneurialism so well? Asaf Yigal is an Israeli military veteran and CEO of Logz.io, a startup based in Tel Aviv that is pioneering log analytics software. His Co-Founder Tomer Levy also served, and so did many of the company's employees. I asked Yigal what principles of business he derived from his military service and this is what he said.
1. Attitude Over Experience
Recognizing the importance of attitude, Israel evaluates their soldiers first on dependability rather than experience. Commanders must know who they can depend on to look out for their fellow soldiers, follow orders, and complete missions.
"Over time, experience will come, but attitude must be present first," says Yigal. "Without the right attitude, experience has no meaning."
Running a startup can be time-consuming, stressful, and chaotic. Entrepreneurs are faced with a dozen obstacles every day. When filling roles in a startup, it is imperative to determine whether new hires have the attitude necessary to cope with stress, fluctuating work environments, and rapidly changing goals. Regardless of how experienced someone might be or how advanced their technical skills might be, if the attitude is not there, it is better to keep searching for the right candidate.
2. No Time For Hierarchies
Compared to other countries' military units, Israeli military units feature a relatively lean command structure. The country is so small that there may not be time to await orders from headquarters before an enemy force takes strategically important positions. Even the most junior officer in an Israeli military unit must be able to make what could be a life-and-death decision without delay.
"Micromanagement has no place in an Israeli military unit, and it should not exist in a startup, either. Rather than dividing roles, it is more effective to divide responsibilities," notes Yigal. "The result is well-trained staff members who can function at their full potential."
3. Winner Takes All
Given the nature of Israel's security threats, its national defense is predicated on a "win or die" mentality. You must win outright or face annihilation. This dogma is imbued in its soldiers, and they take it into the business world with them.
Yigal says of this mentality, "The phrase "failure is not an option" may be a cliche in the United States, but it is reality in Israel. As a result, Israeli startups plan meticulously and move aggressively."
4. Tell the Hard Truth
When Israeli commanders want to hear the hard truth, they will ask for a tachlis debriefing. This word does not exactly translate, but it basically means "shoot straight; tell the hard truth". In a tech startup, cutting through the non-essential information and getting to the core of an issue is pivotal. Everyone has to check their egos and put the mission first.
5. Business is a Battlefield
A startup is constantly under attack, faces aggressive competitors, and is always just one day away from failure. That is not so different from a military unit. Perhaps Israel's thriving startup culture uniquely benefits from the prevalence of people who understand and thrive in that environment. Yigal believes that his company, at least, is better off for it.
"Logz fights to be at the cutting edge of technology. It is a constant struggle to lead and innovate, but that is what we do, and I believe we are successful because of our military experience."
The culture in Startup Nation may be different from that of Silicon Valley, but the results are hard to argue. Perhaps Tel Aviv can hold Palo Alto's feet to the fire in the coming years and generate a rivalry worth watching.