The Israeli Army Breeds Technology Entrepreneurs

 The Israeli Army Breeds Technology Entrepreneurs

MANY Israeli start-ups should pay royalties to the army, says Edouard Cukierman, a venture capitalist in Tel Aviv. He is only half joking. Despite the recession, Israel’s technology exports grew by more than 5% last year. Mr Cukierman thinks military service deserves some of the credit. Israel’s army does not just train soldiers, he says; it nurtures entrepreneurs.

Teenagers conscripted into high-tech units gain experience “akin to a bachelor’s degree in computer science”, says Ruvi Kitov, co-founder and chief executive of Tufin Technologies, an Israeli software firm. Almost all of Tufin’s employees in the country are, like Mr Kitov himself, veterans of the Israel Defence Forces (IDF). One of the firm’s cash cows is software that finds spam servers and blocks their transmissions. It is based on IDF cyberwarfare technologies that developers first used as soldiers.
Traditional armies drill unquestioning obedience into their grunts. Israel’s encourages creativity. An IDF spokesman says it is “highly acceptable” for soldiers to point out problems and pitch ideas to superiors. That is why veterans are snapped up by start-ups, says Alan Baker, president of the Israel-Canada Chamber of Commerce in Tel Aviv. They also do well raising money, he says, because investors assume the IDF has already weeded out the dishonest and irresponsible. In other countries, employers rely on the college-entry obstacle course to select the brightest and best. In Israel, thanks to conscription, most job applicants have tackled real obstacle courses.
Like Americans, Israelis are quick to challenge authority, says Shlomo Maital, the author of “Global Risk/Global Opportunity”, a new management book. In the IDF, which he served as a reservist for nearly a quarter of a century, soldiers are encouraged to improvise, lest they lose the initiative in the fog of battle. This culture helps ex-army entrepreneurs solve civilian problems, Mr Maital says. He points to Check Point, a large developer of internet-security software. Its founders used to build firewalls to protect systems run by Israeli intelligence.
Optibase, a company based in Herzliya in greater Tel Aviv, sells video technology. Its founders cut their teeth tinkering with video technologies used in the IDF’s intelligence and weapons systems. The firm might not exist without the IDF, says Eli Garten, a vice-president (who commanded 34 soldiers in an air-force intelligence agency when he was 20). Ironically, tech companies such as Optibase are now poaching talent from the IDF with higher salaries.