7 ms·

Can someone explain how or why Israeli startups have historically punched above their weight? For such a small country, they keep churning out tons of successf

Can someone explain how or why Israeli startups have historically punched above their weight? For such a small country, they keep churning out tons of successful companies that get acquired by larger American and European counterparts. I’m suspecting high levels of education plus a culture that encourages entrepreneurship and risk-taking, but there might be more to the story..

tomrod 2y ago
My assumption is all of the above, as well as well connected folks through world class educational institutions, and a generally practical environment.
TheMrZZ 2y ago
I suspect having a 10M population "only" + very bad commercial relations with their direct neighbours make Israeli startups think global from scratch. In Europe, most startups tend to think local-first, which hinders their scaling.
dagmx 2y ago
Mandatory military service with a military that has a high weight on technical warfare/superiority is an oft given reason. Another is network effect. The same way that Silicon Valley has a lot of very successful startups. Once you have a few in a region, it creates a knock on effect. It inspires people to follow suite. It means there’s more money being pushed around in that area. It means there’s more people looking at developments in that area. Often someone may be lower down in one successful startup and then leave to make their own with the experience of how to do it.
- shmatt 2y ago
  I haven't researched deeply but there are plenty of Israeli startup exits with executives coming from combat, non tech units. Usually elite combat units that are harder to get in to. There is something to be said about spending 18-21 in the military, there is pretty much 0 partying during college (that is done during military vacations + the gap year between military and college). By the time you've finished your Bachelors degree you're 25-26 and ready to settle down. You hit your full time job life 6-8 years after high school. Its a very different mindset I look at the 22 year olds moving to NYC after college for their first job, and there is such a huge difference in what they're looking for in their day to day lives. Their job is probably the last thing they are about
John23832 2y ago
Through the Israeli military service there is a large pipeline of (technical acumen cultivated while serving) -> (business || academia). Especially in technology. A large part of this is comes from the fact that Israel strives to be self sufficient when it comes to military technology. When it comes to deals, there is also, frankly, a large Jewish funding/investing community. The hard part of getting deals is who you know.
shmatt 2y ago
There is also a work culture of both putting in as many hours as necessary, but also very goal oriented and understanding whats critical to deliver and what sint There are obviously many more countries that make the average American or European tech worker seem lazy, but for some of them working a 60-80 hour week is about showing you're working rather than doing important work From my experience its not strictly the hours put in per week driving Israeli startups, but actually delivering what customers are asking for. I've been in many calls where the executives promised a complex feature that hasn't even been planned yet be delivered very soon, and somehow the team is able to complete it with careful planning and prioritizing (and putting in the hours) The executives dont shy away from the grind either, im now on the other side (US corporate) and Israeli startup CEO/CTOs are basically available for every concern I have 24/7, even when I dont expect them to answer they do
- okdood64 2y ago
  +1 In my previous stint, I had worked with Spot (https://spot.io/ https://spot.io/) as one of our vendors. Absolutely great product, amazing customer support and ability to take feature requests, or otherwise address our pain points quickly and effectively.
- fshbbdssbbgdd 2y ago
  > even when I dont expect them to answer they do I have also experienced this. Given Israel is the opposite side of the world from California, mainly I expect if I ask a question in the afternoon there will be an answer ready in the morning. But surprisingly often, they answer immediately.
  - jedberg 2y ago
    Many Israelis in tech worked shifted hours to line up with the USA better, because either their customers or coworkers are in the USA.
    - falcor84 2y ago
      I would also assume it might be a good circadian fit for many, given the prevalence of "night owls" in tech
treprinum 2y ago
Easy access to large VC companies in the US, networking effects.
deleted 2y ago
[deleted]
trashtester 2y ago
The same demographic is punching even more above their weight in the US. Probably by a pretty large margin, too.
j7ake 2y ago
It’s not only start ups, but also academia. Weizmann institute of science is the envy of the world in terms of their research output, and widely used as a model for new research institutes to aspire to.
pclmulqdq 2y ago
If you google "Unit 8200" that is pretty much the reason. The Israeli military pushes their super-smart kids together to be computer scientists and hackers for 2 years - this is essentially the NSA of Israel. Behind every Israeli tech company is a small cadre of unit 8200 grads. When they finish, a huge network of Unit 8200 alumni who are already rich have a shared experience with these kids, and are ready to invest in any idea these kids have. They have a tight-knit group of incredibly smart colleagues as well, from their time in the military.
- yoavm 2y ago
  > Behind every Israeli tech company is a small cadre of unit 8200 grads. This is of course greatly exaggerated. I know plenty of Israeli startups that never had 8200 grads in them, mine included. I actually think that the role of a specific army unit in creating the environment that fosters these startups is really hyped. It's much more of a cultural thing than some random army unit.
  - pclmulqdq 2y ago
    Plenty of communities have cultures of entrepreneurship and hard work, though.
  - flakeoil 2y ago
    Overall military spending can explain a lot as well. A lot of military spending goes to existing companies as well as startups to develop weapons and defence systems which drives innovation in high-tech technology. Israel spends 5.3% of their GDP on military. That's more than almost any other country in the world and they have spent a lot for many decades. https://en.wikipedia.org/wiki/List_of_countries_with_highest_military_expenditures https://en.wikipedia.org/wiki/List_of_countries_with_highest...
    - jolj 2y ago
      I don't think the Israeli defense budget really goes into Israeli startups. The only related fields are drone startups and cyber startups that hardly sell domestically
MrBuddyCasino 2y ago
> I’m suspecting high levels of education plus a culture that encourages entrepreneurship and risk-taking, but there might be more to the story.. I sincerely hope this is bait, because the answer is obvious.
- I_ 2y ago
  Which is? (I am genuinely asking)
  - throw310822 2y ago
    Jews have a higher proportion of very smart people than other ethnicities. It's something that is "complicated" to talk about (we don't like all the implications of such a possibility), but it's pretty much indisputable.
    - N0b8ez 2y ago
      Hitler infamously condemned the IQ system for being "jewish". I don't think that sentiment has gone away.
      - trashtester 2y ago
        Usually it's the far left that use the oppressor/oppressed way of thinking to demonize their enemies. But when it comes to Jews, Nazis and many other extreme right wingers do the same. Hitler saw the Jews as an existential threat, not as objectively inferior to "Aryans". In fact, this is why he hated them so much above anyone else; he thought that they were the only "Race" that had the potential to out-compete his "Aryans".
        throw310822 2y ago
        > Hitler saw the Jews ... not as objectively inferior to "Aryans". ... he thought that they were the only "Race" that had the potential to out-compete his "Aryans" We're veering terribly off topic, but I'm pretty sure this is not historically true.
underdeserver 2y ago
There's "Startup Nation" by Senor and Singer with a thesis on this. My personal opinion is huge talent density, a just-get-it-done attitude, strong network effects from military service and a small number of universities, and a lot of startup experience across the board - if you're an entrepreneur in Tel Aviv, it's relatively easy to find people who've done it before multiple times, and they'll give you good advice.
htrp 2y ago
Israel is also small enough that almost everyone is 1-2 degrees away from a top tier vc
CSMastermind 2y ago
This touches on some potentially sensitive topics but at least some of the success is explained by having a population with, on average, the second highest IQs. Another part of it is definitely the benefits from having a strong high-trust culture that gives them access to social networks and a priority to provide for the group as a whole not just their own personal interests.
- trashtester 2y ago
  If we look at IQ as an explanation, it's not only about the mean, but also about the variance, which is driven up by the Ashkenazi sub-population. I would not be surprised if Israel has a significantly larger percentage of people with IQ>140 than any other nation.
- myth_drannon 2y ago
  There is a very large percentage of population that doesn't participate in the economy and is largely uneducated. So it's even more shocking to see Israel so successful. And of course, you have the huge wave of immigration from the former USSR in the 90's. Sadly I'm very pessimistic about the future of Israel and the demographics are against it.
  - jolj 2y ago
    The demographics are against the entire western world however i wouldn't get too caught up with extrapolations, they are usually wrong (see population bomb)
m3kw9 2y ago
The govt is westernized and allow relatively more freedom of thought than other nations. So the situation is similar to America. Plus Israel is always been focused on tech because they know they need leverage to defend itself as a small country surrounded by adversaries
belter 2y ago
Nvidia has R&D operations in Israel for several years. Are any of the employees from Run:AI ex-NVIDIA?
0xcde4c3db 2y ago
I'm no economic historian and don't know where the relevant figures would be for Israel, but having skimmed some history of South Korea and Taiwan I get the impression that when a small country overperforms like this it usually involves a combination of generous domestic subsidies/incentives and a massive influx of foreign capital, which can come in numerous forms including technology transfer. Having a diaspora in more developed countries probably doesn't hurt a country's chances either (see e.g. Morris Chang).
- trashtester 2y ago
  The thing is, Jews tend to overperform even more outside of Israel. From Wikipedia: Of the 965 individual recipients of the Nobel Prize and the Nobel Memorial Prize in Economic Sciences between 1901 and 2023,[1] at least 214 have been Jews or people with at least one Jewish parent, representing 22% of all recipients. For comparison, 65.4% of Nobel prize winners were either Christians or had a Christian background. Jews comprise only 0.2% of the world's population, meaning their share of winners is 110 times their proportion of the world's population. [1] https://en.wikipedia.org/wiki/List_of_Jewish_Nobel_laureates https://en.wikipedia.org/wiki/List_of_Jewish_Nobel_laureates
  - VS1999 2y ago
    Unless they're somehow 110 times better than everyone else, this indicates some powerful nepotism.
    - trashtester 2y ago
      That's the oppressor/oppressed narrative for any such difference. Hitler came to the same conclusion, and decided to do something about it. Various communists revolutionaries have used the same kind of thinking to get rid of the ruling classes in their countries after the revolution. But if you consider it this way: The Nobel price was given mostly to white people (including Jews) until about 1970. That's a factor of 10 already. Then you consider that Ashkenazi Jews have an average IQ of about 115 vs other Europeans somewhere south of 100 on average. If the standard deviation is a constant 15, a population with a mean of 100 has about 0.4% of the population with an IQ >140. Increase the mean to 115, and that grows to about 5%. That's another factor of 10. And the gap widens as the threshold increases. This seems to fit the 110x almost perfectly. Disclaimer: I have no Jewish ancestry that I'm aware of. Edit: Also, to my knowledge, the Nobel committee has NOT been dominated by Jews.
phone8675309 2y ago
When you've got the US fueling your war machine you tend to have a lot of money left over to plow into tech dominance.
maratc 2y ago
“Start up nation” does a good job exploring this topic. In short, it’s about never accepting authority and challenging everything, the roots for that come from the culture and even the religion.
xyzzy4747 2y ago
This may be controversial to some people here, but Israelis have high IQs genetically and from good parenting. When you put a bunch of determined high IQ people together they're going to outperform.
xyst 2y ago
Investment into their people. Proper support structures. Taking advantage of their “country pride”. Same effect was seen in USA during the space race. At some point USA just “gave up” and ceded all control to private corporations which don’t give a shit about the people and only care about the bottom line
alephnerd 2y ago
> I’m suspecting high levels of education It's this plus being a small country. The entire population of Israel is roughly the same as the Bay Area, so everyone is 2-3 degrees away from each other. This makes it easier to raise capital and build a startup. The success of Checkpoint and PANW kickstarted the scene.
jampekka 2y ago
Probably a lot of money sloshing around the US-subsidized military-industrial complex?
ActorNightly 2y ago
The boring answer is that its simple community. If you surround yourself by friends who all do that one thing and are all driven to be good at that thing, you will be motivated to do the same thing and get good at it, and motivate other people in turn. Silicon Valley used to be like this.
rchaud 2y ago
> I’m suspecting high levels of education plus a culture that encourages entrepreneurship and risk-taking There's also the small matter of $200bn in US military assistance since 1973, which involved significant knowledge transfer across many different scientific and engineering domains.
someotherperson 2y ago
I've worked for two, both inside and outside Israel, and both were very successful. The same thing happened both times. 1. Foreign Jewish VCs pumped money into it, gave the founders plenty of autonomy. 2. The internal network of the founders to other successful Jews was gigantic. Even if they're unimpressive themselves. Essentially easy access to capital + domestic and international network that can facilitate success. It's a nationalized version of YC.

tomrod 2y ago

My assumption is all of the above, as well as well connected folks through world class educational institutions, and a generally practical environment.

TheMrZZ 2y ago

I suspect having a 10M population "only" + very bad commercial relations with their direct neighbours make Israeli startups think global from scratch. In Europe, most startups tend to think local-first, which hinders their scaling.

dagmx 2y ago

Mandatory military service with a military that has a high weight on technical warfare/superiority is an oft given reason. Another is network effect. The same way that Silicon Valley has a lot of very successful startups. Once you have a few in a region, it creates a knock on effect. It inspires people to follow suite. It means there’s more money being pushed around in that area. It means there’s more people looking at developments in that area. Often someone may be lower down in one successful startup and then leave to make their own with the experience of how to do it.

shmatt 2y ago
I haven't researched deeply but there are plenty of Israeli startup exits with executives coming from combat, non tech units. Usually elite combat units that are harder to get in to. There is something to be said about spending 18-21 in the military, there is pretty much 0 partying during college (that is done during military vacations + the gap year between military and college). By the time you've finished your Bachelors degree you're 25-26 and ready to settle down. You hit your full time job life 6-8 years after high school. Its a very different mindset I look at the 22 year olds moving to NYC after college for their first job, and there is such a huge difference in what they're looking for in their day to day lives. Their job is probably the last thing they are about

John23832 2y ago

Through the Israeli military service there is a large pipeline of (technical acumen cultivated while serving) -> (business || academia). Especially in technology. A large part of this is comes from the fact that Israel strives to be self sufficient when it comes to military technology. When it comes to deals, there is also, frankly, a large Jewish funding/investing community. The hard part of getting deals is who you know.

shmatt 2y ago

There is also a work culture of both putting in as many hours as necessary, but also very goal oriented and understanding whats critical to deliver and what sint There are obviously many more countries that make the average American or European tech worker seem lazy, but for some of them working a 60-80 hour week is about showing you're working rather than doing important work From my experience its not strictly the hours put in per week driving Israeli startups, but actually delivering what customers are asking for. I've been in many calls where the executives promised a complex feature that hasn't even been planned yet be delivered very soon, and somehow the team is able to complete it with careful planning and prioritizing (and putting in the hours) The executives dont shy away from the grind either, im now on the other side (US corporate) and Israeli startup CEO/CTOs are basically available for every concern I have 24/7, even when I dont expect them to answer they do

okdood64 2y ago
+1 In my previous stint, I had worked with Spot (https://spot.io/ https://spot.io/) as one of our vendors. Absolutely great product, amazing customer support and ability to take feature requests, or otherwise address our pain points quickly and effectively.
fshbbdssbbgdd 2y ago
> even when I dont expect them to answer they do I have also experienced this. Given Israel is the opposite side of the world from California, mainly I expect if I ask a question in the afternoon there will be an answer ready in the morning. But surprisingly often, they answer immediately.
- jedberg 2y ago
  Many Israelis in tech worked shifted hours to line up with the USA better, because either their customers or coworkers are in the USA.
  - falcor84 2y ago
    I would also assume it might be a good circadian fit for many, given the prevalence of "night owls" in tech

treprinum 2y ago

Easy access to large VC companies in the US, networking effects.

deleted 2y ago

[deleted]

trashtester 2y ago

The same demographic is punching even more above their weight in the US. Probably by a pretty large margin, too.

j7ake 2y ago

It’s not only start ups, but also academia. Weizmann institute of science is the envy of the world in terms of their research output, and widely used as a model for new research institutes to aspire to.

pclmulqdq 2y ago

If you google "Unit 8200" that is pretty much the reason. The Israeli military pushes their super-smart kids together to be computer scientists and hackers for 2 years - this is essentially the NSA of Israel. Behind every Israeli tech company is a small cadre of unit 8200 grads. When they finish, a huge network of Unit 8200 alumni who are already rich have a shared experience with these kids, and are ready to invest in any idea these kids have. They have a tight-knit group of incredibly smart colleagues as well, from their time in the military.

yoavm 2y ago
> Behind every Israeli tech company is a small cadre of unit 8200 grads. This is of course greatly exaggerated. I know plenty of Israeli startups that never had 8200 grads in them, mine included. I actually think that the role of a specific army unit in creating the environment that fosters these startups is really hyped. It's much more of a cultural thing than some random army unit.
- pclmulqdq 2y ago
  Plenty of communities have cultures of entrepreneurship and hard work, though.
- flakeoil 2y ago
  Overall military spending can explain a lot as well. A lot of military spending goes to existing companies as well as startups to develop weapons and defence systems which drives innovation in high-tech technology. Israel spends 5.3% of their GDP on military. That's more than almost any other country in the world and they have spent a lot for many decades. https://en.wikipedia.org/wiki/List_of_countries_with_highest_military_expenditures https://en.wikipedia.org/wiki/List_of_countries_with_highest...
  - jolj 2y ago
    I don't think the Israeli defense budget really goes into Israeli startups. The only related fields are drone startups and cyber startups that hardly sell domestically

MrBuddyCasino 2y ago

> I’m suspecting high levels of education plus a culture that encourages entrepreneurship and risk-taking, but there might be more to the story.. I sincerely hope this is bait, because the answer is obvious.

I_ 2y ago
Which is? (I am genuinely asking)
- throw310822 2y ago
  Jews have a higher proportion of very smart people than other ethnicities. It's something that is "complicated" to talk about (we don't like all the implications of such a possibility), but it's pretty much indisputable.
  - N0b8ez 2y ago
    Hitler infamously condemned the IQ system for being "jewish". I don't think that sentiment has gone away.
    - trashtester 2y ago
      Usually it's the far left that use the oppressor/oppressed way of thinking to demonize their enemies. But when it comes to Jews, Nazis and many other extreme right wingers do the same. Hitler saw the Jews as an existential threat, not as objectively inferior to "Aryans". In fact, this is why he hated them so much above anyone else; he thought that they were the only "Race" that had the potential to out-compete his "Aryans".
      - throw310822 2y ago
        > Hitler saw the Jews ... not as objectively inferior to "Aryans". ... he thought that they were the only "Race" that had the potential to out-compete his "Aryans" We're veering terribly off topic, but I'm pretty sure this is not historically true.

underdeserver 2y ago

There's "Startup Nation" by Senor and Singer with a thesis on this. My personal opinion is huge talent density, a just-get-it-done attitude, strong network effects from military service and a small number of universities, and a lot of startup experience across the board - if you're an entrepreneur in Tel Aviv, it's relatively easy to find people who've done it before multiple times, and they'll give you good advice.

htrp 2y ago

Israel is also small enough that almost everyone is 1-2 degrees away from a top tier vc

CSMastermind 2y ago

This touches on some potentially sensitive topics but at least some of the success is explained by having a population with, on average, the second highest IQs. Another part of it is definitely the benefits from having a strong high-trust culture that gives them access to social networks and a priority to provide for the group as a whole not just their own personal interests.

trashtester 2y ago
If we look at IQ as an explanation, it's not only about the mean, but also about the variance, which is driven up by the Ashkenazi sub-population. I would not be surprised if Israel has a significantly larger percentage of people with IQ>140 than any other nation.
myth_drannon 2y ago
There is a very large percentage of population that doesn't participate in the economy and is largely uneducated. So it's even more shocking to see Israel so successful. And of course, you have the huge wave of immigration from the former USSR in the 90's. Sadly I'm very pessimistic about the future of Israel and the demographics are against it.
- jolj 2y ago
  The demographics are against the entire western world however i wouldn't get too caught up with extrapolations, they are usually wrong (see population bomb)

m3kw9 2y ago

The govt is westernized and allow relatively more freedom of thought than other nations. So the situation is similar to America. Plus Israel is always been focused on tech because they know they need leverage to defend itself as a small country surrounded by adversaries

belter 2y ago

Nvidia has R&D operations in Israel for several years. Are any of the employees from Run:AI ex-NVIDIA?

0xcde4c3db 2y ago

I'm no economic historian and don't know where the relevant figures would be for Israel, but having skimmed some history of South Korea and Taiwan I get the impression that when a small country overperforms like this it usually involves a combination of generous domestic subsidies/incentives and a massive influx of foreign capital, which can come in numerous forms including technology transfer. Having a diaspora in more developed countries probably doesn't hurt a country's chances either (see e.g. Morris Chang).

trashtester 2y ago
The thing is, Jews tend to overperform even more outside of Israel. From Wikipedia: Of the 965 individual recipients of the Nobel Prize and the Nobel Memorial Prize in Economic Sciences between 1901 and 2023,[1] at least 214 have been Jews or people with at least one Jewish parent, representing 22% of all recipients. For comparison, 65.4% of Nobel prize winners were either Christians or had a Christian background. Jews comprise only 0.2% of the world's population, meaning their share of winners is 110 times their proportion of the world's population. [1] https://en.wikipedia.org/wiki/List_of_Jewish_Nobel_laureates https://en.wikipedia.org/wiki/List_of_Jewish_Nobel_laureates
- VS1999 2y ago
  Unless they're somehow 110 times better than everyone else, this indicates some powerful nepotism.
  - trashtester 2y ago
    That's the oppressor/oppressed narrative for any such difference. Hitler came to the same conclusion, and decided to do something about it. Various communists revolutionaries have used the same kind of thinking to get rid of the ruling classes in their countries after the revolution. But if you consider it this way: The Nobel price was given mostly to white people (including Jews) until about 1970. That's a factor of 10 already. Then you consider that Ashkenazi Jews have an average IQ of about 115 vs other Europeans somewhere south of 100 on average. If the standard deviation is a constant 15, a population with a mean of 100 has about 0.4% of the population with an IQ >140. Increase the mean to 115, and that grows to about 5%. That's another factor of 10. And the gap widens as the threshold increases. This seems to fit the 110x almost perfectly. Disclaimer: I have no Jewish ancestry that I'm aware of. Edit: Also, to my knowledge, the Nobel committee has NOT been dominated by Jews.

phone8675309 2y ago

When you've got the US fueling your war machine you tend to have a lot of money left over to plow into tech dominance.

maratc 2y ago

“Start up nation” does a good job exploring this topic. In short, it’s about never accepting authority and challenging everything, the roots for that come from the culture and even the religion.

xyzzy4747 2y ago

This may be controversial to some people here, but Israelis have high IQs genetically and from good parenting. When you put a bunch of determined high IQ people together they're going to outperform.

xyst 2y ago

Investment into their people. Proper support structures. Taking advantage of their “country pride”. Same effect was seen in USA during the space race. At some point USA just “gave up” and ceded all control to private corporations which don’t give a shit about the people and only care about the bottom line

alephnerd 2y ago

> I’m suspecting high levels of education It's this plus being a small country. The entire population of Israel is roughly the same as the Bay Area, so everyone is 2-3 degrees away from each other. This makes it easier to raise capital and build a startup. The success of Checkpoint and PANW kickstarted the scene.

jampekka 2y ago

Probably a lot of money sloshing around the US-subsidized military-industrial complex?

ActorNightly 2y ago

The boring answer is that its simple community. If you surround yourself by friends who all do that one thing and are all driven to be good at that thing, you will be motivated to do the same thing and get good at it, and motivate other people in turn. Silicon Valley used to be like this.

rchaud 2y ago

> I’m suspecting high levels of education plus a culture that encourages entrepreneurship and risk-taking There's also the small matter of $200bn in US military assistance since 1973, which involved significant knowledge transfer across many different scientific and engineering domains.

someotherperson 2y ago

I've worked for two, both inside and outside Israel, and both were very successful. The same thing happened both times. 1. Foreign Jewish VCs pumped money into it, gave the founders plenty of autonomy. 2. The internal network of the founders to other successful Jews was gigantic. Even if they're unimpressive themselves. Essentially easy access to capital + domestic and international network that can facilitate success. It's a nationalized version of YC.