Baden U'Ren

2018 / 12 November

What I learned from a Week’s Immersion in the Startup Nation


You can feel it when two people are truly in love. There’s an energy that lifts a room and brings smiles to faces and excitement to conversations. We’ve all experienced it. Onlookers reflect on their own relationships and take cues on what is needed to drive a vibrant existence. The atmosphere of a couple truly in love is infectious: it brings the best out in both parties and raises the experience of all who connect. We are drawn to it, either to connect with kindred spirits or hoping some of it will rub off on us.

Truly great love is driven by intimacy, by vulnerability, by immersive shared experiences, and by trust. It is the basis of a meaningful relationship. Only when we are truly ourselves and open up to the potential of vulnerability can we freely engage with our partner to enhance our experience and build a base for an extraordinary state of being.

Such are my thoughts as I reflect upon my one week immersion in Israel, the Startup Nation. Thirteen of us shared an immersive experience as part of Startup Catalyst’s 2018 Startup Community Leaders Mission, supported by the Department of Industry, Innovation and Science and organised through Australia’s Tel Aviv Landing Pad, part of Austrade’s Australia Unlimited program. We hailed from across Australia, from VCs to universities to government agencies to incubators, accelerators and innovation hubs. We were there to learn and to connect: to improve our knowledge and networks in order to better serve our communities.


Mission:Israel 2018 crew (L-R): Baden U’Ren (me!), Imogen Baxter (back), Aurora VossChristiaan HindJosh LipscombeJustin StrharskyFilipp D’AprileChantal AboucharRenee HakendorfOmri WislizkiDianna SomervillePrathayana ChandrakumarMelissa Pye.  Image by Or Kaplan

My understanding of innovation-driven ecosystems has deepened immeasurably. This is the seventh international mission I have led, and I am finally beginning to truly understand the innovation enablers in a community. They are not just coworking spaces or innovation hubs or accelerators: it is much deeper than that. At the heart of an entrepreneurial ecosystem is the very fabric of the community, similar to the attributes of true love that support meaningful relationships.

For some, it is referred to as a community’s social capital. Receiving mixed commentary in academic circles, the term social capital refers to a collection of concepts such as social norms, trust and shared values. Supporting the Startup Nation I see a social capital akin to that enjoyed by a couple truly in love. I see vulnerability. I see intimacy, I see trust. Sitting above I see an intense aspiration for a greater good.

A greater good. A desire to improve one’s lot in life. Perhaps driven from millennia of oppression, persecution and abuse. Before this immersion I didn’t really get it. Yes, I have benefited from Australia’s worldly view of history and have been exposed to the horrors of the holocaust, but until stood in Israel’s own holocaust museum, in Jerusalem, I didn’t understand.

I came to Israel with sympathy for the Jewish plight. And as I stood within the memorial erected by the Jewish people themselves, watching interviews with holocaust survivors recounting their horrific experiences, standing next to an Israeli woman, about my age, holding back sobs of grief as tears rolled down her face, that my understanding turned to empathy. I could feel it. It surrounded me. It entered my heart and, in subsequent days when I heard examples of Zionism, of wealthy Jewish diaspora investing in community-focused entities such as Start-up Nation Central with no interest in financial gain, allowed me a different lens with through which to understand.

I understand the fight for a Jewish State at a new level. Israel, a place to call home. A “Jewish and Democratic State.” When I first heard this term I went searching for what it actually meant and found this definition by noted author and journalist Yossi Klein Halevi: “The homeland of all Jews, whether or not they are citizens of Israel, and it’s the State of all its citizens, whether or not they are Jews.”

Given the history and experience of the Jewish people, if I were a member of a Jewish family I would want to live in a country absent of an authority which could choose to discriminate against me and I would want that country to thrive. It makes sense to me. This is not to say I necessarily agree with the definition of Israel, nor prioritise a Jewish claim over the contentious and pivotal geography that is currently called Israel, but rather to empathise with the Jewish point of view and understand at a deeper level the drive for a Jewish and Democratic State.

I compare that to my own Huguenot heritage. The Huguenots have also suffered persecution and mass extermination at the hands of oppressors. My family emigrated from France though England, arriving in Australia in the early 1800s. Ever since we have enjoyed the bounty that is the lucky country. We have lost touch with our oppressed history: it is no longer discussed over the dinner table. We don’t memorialise our past. Our shared immersive experience has become one of comfortable family life, our priorities focused on our family and immediate community, not the Huguenot people as a whole.

It also adds to my understanding of why hundreds of thousands of Australians brave the cold winter’s morning on Anzac Day, commemorating primarily the tragedy of Gallipoli in 1915. This is an Australian shared immersive experience – one of loyalty and mateship, of strength and courage under extreme adversity, of punching above our weight – and one which contributes to the character of our nation.

How does this relate to the Startup Nation? What is palpable in Israel is a collective effort for the good of the country. When I asked our host Omri Wislizki how he felt about being required to serve in the Israel Defense Force, he unreservedly replied “I do it for my family, and for my country.” There is an inner drive, an imperative even, to provide a vibrant society for all Israelis, and for all Jews.

Enabling this collective effort is a constant meeting and mating of ideas, of innovations, of organisations. It seems as though everyone is connected with everyone. It is certainly the case that a startup founder looking for a connection is afforded every opportunity. There is a certain meritocracy present in interpersonal relationships in Israel. You don’t need a fancy title or business card to gain the attention of those you seek. You judged on your achievements and potential to contribute to shared goals.


Inside the Australian Landing Pad in Tel Aviv

Why is this the case? I believe the IDF is at least partly responsible, but perhaps not for the reasons one may suspect. Israel’s compulsory national service is often cited as a basis to explain why the Startup Nation is structurally different to other regions in the world. Conversations cite the particular strengths of Unit 8200 and the advances in cyber and fintech which enjoy their beginnings in the shadowy insides of the IDF’s crack intelligence unit. Another explanatory factor is the volumes of data gleaned from the induction process. All Israelis (with a few exceptions) are required to serve for 30 months (men) or 18 months (women) and, in order to assign people into a unit most suitable for them, the IDF conducts exhaustive physical and psychometric testing. For me, it is the relationships that are built and, more importantly, the basis of those relationships that are the secret ingredient behind the Startup Nation’s innovative success.

Time and again we saw people working together who met in the IDF, especially when they were in the same unit. You see, individuals are assigned into units based on the previously mentioned physical and psychological assessments. Inductees are told their physical profile number, between 21–97, with certain requirements for certain units (special forces and fighter jet pilots require a 97). Suffice to say, the really smart individuals find their way into the intelligence units.

This enables an instant insight into the characteristics of an individual based upon which unit they served in. It is an assessment made at the beginning of a person’s adulthood, and perhaps becomes less relevant the more advanced one becomes in age and experience. But it was pervasive: when we asked about the background of SOSA CEO Uzi Scheffer the first comment was “he was a pilot!” F2 Capital’s accelerator program The Junction is led by Tal Zackon who, it emerged through conversation, was Special Forces: the same unit as Managing Partner Jonathan Saacks. The head of the 8200 Social Program Neta-Li Meiri hails from the unit that bears its name, along with many of her staff. There is an inner bond among members of the same unit, even from different cohorts, born from shared language and a set of experiences creating psychological contracts extending far beyond activities in the IDF.


With Tal Zackon at F2 Capital

Even more important, in my view, is the informal formality imparted by the structure of the IDF itself. This insight came from a very candid talk by Nimrod Vromen, Partner International Hitech Department at Yigal Arnon & Co and an active reservist in the IDF. He serves one month per year in his old unit and shared a peculiarity about seniority in the IDF. One third of the IDF comprises conscriptees, typically aged 18–21 or 21–24 if they become officers. The remainder are reservists like Nimrod: experienced personnel continuing to serve up to the age of 45.

This means a 22 year-old officer is often commanding a team which includes several 30- or 40-something reservists, making decisions and expecting conformity. That 22 year-old can’t just pull rank: they must influence in ways that are not based on position alone. In the study of power and influence we refer to this as referent power: the ability to influence behaviour because of a follower’s loyalty, friendship, respect or desire for approval. It is the antithesis of institutional or positional power.

This corruption of a typical hierarchical structure imparts an inbuilt questioning of authority. Not disrespect, mind you, but a willingness of subordinates to speak their mind and of superiors to take heed. It enables an exchange of ideas, flexibility in decision-making, and agility in action. It is so entrenched that officers and conscripts alike call each other by their nicknames, and it is driven from the top: even Prime Minister Benjamin Netanyahu is most commonly referred to by his nickname “Bibi.”

This is in stark contrast to the discipline evident in the US Army, with high power distance dictating conformity without question. I am reminded of a recent discussion on the radio where a former US Army officer was reflecting on the high instances of mental health problems among veterans. He recounted basic training where they would arrive at a training camp on a bus and one sergeant would shout at them to get off the bus, to which they would respond “Yes Sergeant!” When they got outside another sergeant would berate them for getting off the bus and order them back on, to which they would respond “Yes Sergeant!” And this would continue until the new recruits just do exactly as they are told without questioning why. This is an intervention aimed at building a base of positional power in the organisation, where behaviour is dictated by the individual with the higher rank. It is an excellent system to enable discipline and control.

This meritocracy, developed in the IDF, is embedded in society and evident in organisations. In the words of Matt Ridley, it enables ideas to have sex. Creative collisions and collaborations drive exchange and trade, the very engine of a market economy. A meritocratic ecosystem will not, however, function without trust. Left unchecked, it can lead to competitive behaviours prioritising individualism and “a pernicious, self-justifying, entitlement narrative.

Trust

It is my considered opinion that trust is the ingredient which empowers us to give up control, to free ourselves from the boundaries of Taylorism and the hubris of Twentieth Century management. Trust is the liberating force which opens us up to our potential, expands our possibilities, and allows us to pursue the potential of creative collaboration.

Much has been written on the effect of psychological safety on team performance within organisation, with Google’s Project Aristotle a notable example. While psychological safety focuses on the effect of group dynamics on an individual’s perception of the consequences of taking a risk – like questioning an assumption, proposing an opinion, or challenging the decision of a leader – trust incorporates a relational context and considers expectations of the behaviour of others over time.

Trust comprises four main pillars: authenticity, integrity, benevolence and consistency. To trust another party we require confidence they are who they say they are, they hold strong to some fundamental principles on which we can rely, they have our interests at heart in addition to their own, and their behaviours are predictable over time.

Authenticity. Genuine: being actually and exactly what is claimed. I see authenticity in spades in Israel. Government plays a facilitator role through entities such as the Israel Innovation Authority and JNext. In each case, the strategy is clear: promote integration and collaboration in the ecosystem through a range of grants and program focused on stakeholder activation.

SOSA is an open innovation platform connecting multinational corporations with the Israeli start-up scene. Deloitte’s Innovation Tech Terminal performs the same role, but for Deloitte clients worldwide. Coca Cola resources The Bridge in a similar play but from the opposite side, using its global network to commercialise Israeli startups. Turner and Mercedes Benz joined this model to expand the commercialisation opportunities. Start-Up Nation Centralmeasures the ecosystem and hosts boutique corporate immersions. Time and again we visited stakeholders in the ecosystem who were very clear on their role and focused on delivering their value proposition. The strategic intent of each participant was clear and didn’t waiver: they were exactly what they claimed to be.

Integrity differs from authenticity in that it implies adherence to some strong moral principles, socially constructed as they may be. There is a certain honesty involved in an entity deemed to have integrity. I am drawn to the contemporary discussion of purpose-led organisations. Research shows firms embodying a meaningful purpose attract and retain the best people and outperform financially. When this is combined with the Three Cs driving employee motivation (career, community, cause) we can start to see that clearly identified statements about what is important to the company can appeal to like-minded employees, leading to high levels of organisational identification and contributing to to an involvement oriented culture (see the case study of Omada Health and why ex-Google Enterprise VP Jocelyn Ding decided to join them). The link to my earlier discussion of the collective desire for a vibrant Jewish and Democratic State is clear.

The third pillar is the keystone of trust, the one without which the other pillars will crumble in upon themselves. Benevolence implies an interest in doing good, of being kind to others, of valuing the well-being of others in going about your business. It is the ingredient which lifts relationships and is evident in all innovative ecosystems around the world. In Silicon Valley it is called the pay-it-forward mentality. In Boulder they give it the hashtag #givefirst. In Israel it is embodied in a collective commitment to building the Startup Nation.

The benevolence factor reminds me of Warren Buffet’s famous insight: “in looking for people to hire you look for three qualities: integrity, intelligence and energy. Without the first, the other two will kill you.

Consistency. Trust exists in a transient state, built over time and susceptible to erosion and sabotage. Trusting relationships must be carefully maintained by consistent reinforcing behaviour and, importantly, by the absense of contrarian actions. This is why infedelity is so destructive to marriage and playground indiscretions lead to the break up of school-based friendship groups.

At the heart of Israel’s entrepreneurial ecosystem I see the fundamentals of trust and a collective desire for a greater good.

It is led by visionary entrepreneurs like Yanki Margalit, beacons of light illuminating paths forward by focusing on aspirational innovation.

Government acts as a facilitator, proactively encouraging and enabling collaboration through targeted interventions like the IIA’s Innovation Labs Program, focused on activation of innovation potential. Their focus on supporting R&D has resulted in Israel ranked #1 in the world on R&D spend as a percentage of GDP. Multinational Corporations engage with the startup community, primarily through specialist intermediaries like SOSA, The Bridge and Deloitte’s ITT just to name a few. Universities and the IDF inject relevant talent and provide environments for the creation of IP. Mobileye is a classic example, despite the fact Hebrew University of Jerusalem received no monetary return when the autonomous vehicle technology company was acquired by Intel in 2017 for US$15.3B. Israel’s Venture Capital industry ranks first in the world for investments per capital, and the ecosystem is driven by an average of 880 new startups per year qualified through 258 active incubators and accelerators.

Enormous levels of collaboration are the engine behind what is one of the world’s most innovative ecosystems. For me, it is driven by an overarching cause and an inherent trust among the participants. The good news is we don’t have to have compulsory national service nor experience the terrors of the holocaust to benefit from the Israel example. The development of trust is contextual and relevant to the parties involved. We just need to consider the ways and means we can foster a similar culture, using the example of Israel as an exemplar to guide practice.

The lessons for Australia are clear. We must connect with a driving purpose that is relevant to our organisation or community. It doesn’t need to be a safe haven for our people, it just need to be authentic. My wife’s business Pet Wellness Centres, for example, lives and breathes the inner mantra of “helping pets live longer, healthier, happier lives.” It rallies our staff together and attracts like-minded business to collaborate and grow together. If we are authentic in our claims and exceptional in our performance it will drive specialisation and exchange, the basic ingredients of economic prosperity.

We then need to let go of control. By knowing our strengths and opening ourselves up to the potential of vulnerability, we can kick-start creative collaboration and drive innovative capability. Being taken advantage of is the potential downside of this approach, which can best be managed by nurturing trust-based relationships. Once we understand the pillars of trust — authenticity | integrity | benevolence | consistency — we can take action to enable it in our personal and business dealings.

The insights of Israel have shown how this works at scale: it is up to us to enact it at a local level. Thank you Israel, it has been epic.


One of the hidden surprises of Tel Aviv, an intriguing city on many fronts.


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