Start-up Nation (12 page)

Nathaniel Fick was a marine captain who fought in the Afghanistan and Iraq wars, before pursuing a dual-degree program at
Harvard Business School and the Kennedy School of Government and penning a book about his experiences called
One Bullet Away
. He told us that he was trained to think about fighting the “three-block war.” In Iraq and Afghanistan, he said, “Marines
could be passing out rice on one city block, doing patrols to keep the peace on another block, and engaged in a full-on firefight
on the third block. All in the same neighborhood.”
¹⁵

Junior commanders in America’s new wars find themselves playing the role of small-town mayor, economic-reconstruction czar,
diplomat, tribal negotiator, manager of millions of dollars’ worth of assets, and security chief, depending on the day.

And, as in the
IDF
, today’s junior commanders are also more inclined to challenge senior officers in ways they typically would not have in the
past. This is partly from serving multiple tours and having watched their peers get killed as a result of what junior officers
often believe are bad decisions, lack of strategy, or lackluster resources provided by higher-ups. As American military analyst
Fred Kagan explained it, U.S. soldiers and marines “have caught up with the Israelis in the sense that a junior guy who has
been deployed multiple times will dispense with the niceties towards superiors.” There is a correlation between battlefield
experience and the proclivity of subordinates to challenge their commanders.

Given all this battlefield entrepreneurial experience, the vets coming out of the Iraq and Afghanistan wars are better prepared
than ever for the business world, whether building start-ups or helping lead larger companies through the current turbulent
period.

Al Chase advises vets not to be intimidated by others in the job market who have already been in the business world and know
the “nomenclature.” Vets, he said, bring things to the table that their business peers could only dream about, including a
sense of proportionality—what is truly a life-or-death situation and what is something less than that; what it takes to motivate
a workforce; how to achieve consensus under duress; and a solid ethical base that has been tested in the crucible of combat.

Brian Tice, an infantry officer, was a captain in the U.S. Marine Corps when he decided that he wanted to make the transition
to business. By that time he was thirty years old and had completed five deployments—including assignments in Haiti and Afghanistan—and
was in the middle of his sixth, in Iraq. He wrote his essays for his applications to Stanford’s
MBA
program on a laptop in a burnt-out Iraqi building near the Al Asad Air Base, in the violent Al Anbar Province of western
Iraq. He had to complete his application at odd hours because his missions always took place in the middle of the night. As
an operations officer for a unit of 120 marines, Tice had to build the “package” for each operation against insurgents and
al Qaeda—determine how much force, how many marines, and how much air support were needed. So the only time he could rest
and plan future operations was during the day.
¹⁶

Based over eight thousand miles from Stanford’s campus, he couldn’t meet the school’s requirement for an in-person interview.
So the admissions department scheduled one over the phone, which he did between sniper operations and raids, while standing
in an open expanse of desert. Tice asked the admissions officer to excuse the blaring noise of helicopters flying overhead,
and had to cut the interview short when mortars landed nearby.

More and more American military officers are applying for
MBA
programs and, like Captain Tice, are going to extraordinary lengths to do so. In 2008, of aspiring
MBA
applicants that took the Graduate Management Admission Test (GMAT), 15,259, or 6 percent, had military experience. At the
University of Virginia’s Darden School of Business, the number of military applicants rose 62 percent from 2007 to 2008. The
first-year class in 2008 had 333 students, 40 of whom were from the military, including 38 who had served in Afghanistan or
Iraq.

The Graduate Management Admission Council, which administers the
GMAT
, has made it a priority to better organize the path from war front to business school. It has launched its Operation
MBA
program, which helps members of the armed forces find B-schools that waive application fees or offer generous financial aid
packages and even tuition deferrals for cash-strapped vets. And the council is even setting up
GMAT
test centers on military bases, one of which was opened in 2008 at Fort Hood in Texas; another is planned to open at Yokota
Air Base in Japan.

Yet the capacity of U.S. corporate recruiters and executives to make sense of combat experience and its value in the business
world is limited. As Jon Medved explained, most American business-people simply do not know how to read a military résumé.
Al Chase told us that a number of the vets he’s worked with have walked a business interviewer through all their leadership
experiences from the battlefield, including case studies in high-stakes decision making and management of large numbers of
people and equipment in a war zone, and at the end of it the interviewer has said something along the lines of “That’s very
interesting, but have you ever had a real job?”

In Israel it is the opposite. While Israeli businesses still look for private-sector experience, military service provides
the critical standardized metric for employers—all of whom know what it means to be an officer or to have served in an elite
unit.

Doubt and argument—this is a syndrome of the Jewish civilization and this is a syndrome of today’s Israel.

—A
MOS
O
Z

A
BOUT THIRTY NATIONS
have compulsory military service that lasts longer than eighteen months. Most of these countries are
developing or nondemocratic or both. But among first-world countries, only three require such a lengthy period of military
service: Israel, South Korea, and Singapore. Not surprisingly, all three face long-standing existential threats or have fought
wars for survival in recent memory.
¹

For Israel, the threat to its existence began before it had become a sovereign nation. Beginning in the 1920s, the Arab world
resisted the establishment of a national Jewish state in Palestine, then sought to defeat or weaken Israel in numerous wars.
South Korea has lived under a constant threat from North Korea, which has a large standing army poised just a few miles from
Seoul, South Korea’s capital. And Singapore lives with memories of the occupation by Japan during World War II, its recent
struggle for independence, which culminated in 1965, and the volatile period that followed.

Singaporean National Service was introduced in 1967. “We had to defend ourselves. It was a matter of survival. As a small
country with a small population, the only way we could build a force of sufficient size . . . was through conscription,” explained
Defense Minister Teo Chee Hean. “It was a decision not taken lightly given the significant impact that conscription would
have on every Singaporean. But there was no alternative.”
²

At independence, Singapore had only two infantry regiments, and they had been created and were commanded by the British. Two-thirds
of the soldiers were not even residents of Singapore. Looking for ideas, the city-state’s first defense minister, Goh Keng
Swee, called Mordechai Kidron, the former Israeli ambassador to Thailand, whom he had gotten to know while the two men were
working in Asia. “Goh told us that they thought that only Israel, a small country surrounded by Muslim countries, . . . could
help them build a small, dynamic army,” Kidron has said.
³

Singapore gained independence twice over the course of just two years. The first was independence from the British in 1963,
as part of Malaysia. The second was independence from Malaysia, in 1965, to stave off civil war. Singapore’s current prime
minister, Goh Chok Tong, described his country’s relations with Malaysia as having remained tense after an “unhappy marriage
and acrimonious divorce.” Singaporeans also feared threats from Indonesia, all while an armed Communist insurgency was looming
just to Singapore’s north, in Indochina.

In response to Goh’s pleas for help, the
IDF
tasked Lieutenant Colonel Yehuda Golan with writing two manuals for the nascent Singaporean army: one on combat doctrine
and the structure of a defense ministry and another on intelligence institutions. Later, six
IDF
officers and their families moved to Singapore to train soldiers and create a conscription-based army.

Along with compulsory service and a career army, Singapore also adopted elements of the IDF’s model of reserve service. Every
soldier who completes his regular service is obligated to serve for short stints every year, until the age of thirty-three.

For Singapore’s founding generation, national service was about more than just defense. “Singaporeans of all strata of society
would train shoulder to shoulder in the rain and hot sun, run up hills together, and learn to fight as a team in jungles and
built-up areas. Their common experience in National Service would bond them, and shape the Singapore identity and character,”
Prime Minister Goh said on the Singaporean military’s thirty-fifth anniversary.

“We are still evolving as a nation,” Goh continued. “Our forefathers were immigrants. . . . They say that in National Service,
everyone—whether Chinese, Malay, Indian, or Eurasian—is of the same color: a deep, sunburnt brown! When they learn to fight
as one unit, they begin to trust, respect, and believe in one another. Should we ever have to go to war to defend Singapore,
they will fight for their buddies in their platoon as much as for the country.”
⁴

Substitute “Israel” for “Singapore,” and this speech could have been delivered by David Ben-Gurion.

Although Singapore’s military is modeled after the IDF—the testing ground for many of Israel’s entrepreneurs—the “Asian Tiger”
has failed to incubate start-ups. Why?

It’s not that Singapore’s growth hasn’t been impressive. Real per capita
GDP
, at over U.S. $35,000, is one of the highest in the world, and real
GDP
growth has averaged 8 percent annually since the nation’s founding. But its growth story notwithstanding, Singapore’s leaders
have failed to keep up in a world that puts a high premium on a trio of attributes historically alien to Singapore’s culture:
initiative, risk-taking, and agility.

A growing awareness of the risk-taking gap prompted Singapore’s finance minister, Tharman Shanmugaratnam, to drop in on Nava
Swersky Sofer, an Israeli venture capitalist who went on to run Hebrew University’s technology transfer company. The university
company, called Yissum, is among the top ten academic programs in the world, measured by the commercialization of academic
research. Shanmugaratnam had one question for her: “How does Israel do it?” He was nearby for a G-20 meeting, but he skipped
the last day of the summit to come to Israel.

Today the alarm bells are being sounded even by Singapore’s founding father, Lee Kuan Yew, who served as prime minister for
three decades. “It’s time for a new burst of creativity in business,” he says. “We need many new tries, many start-ups.”
⁵

There is a similar feeling in Korea, another country that has a military draft and a sense of external threat, and yet, as
in Singapore and not as in Israel, these attributes have not produced a start-up culture. Korea, clearly, has no shortage
of large technology companies. Erel Margalit, an Israeli entrepreneur with a stable of media start-ups, actually sees Korea
as fertile ground for his cutting-edge companies. “America is the queen of content,” Margalit said, “but it is still in the
broadcast era, while China and Korea are in the interactive age.”
⁶

So why doesn’t Korea produce nearly as many start-ups per capita as Israel? We turned to Laurent Haug for insight. Haug is
the creator and force behind the Lift conferences, which focus on the nexus between technology and culture. Since 2006, his
gatherings have alternated between Geneva, Switzerland, and Jeju, Korea. We asked Haug why there were not more start-ups in
Korea, despite the great affinity Koreans have for technology.

“The fear of losing face, and the bursting of the Internet bubble in 2000,” he told us. “In Korea, one should not be exposed
while failing. Yet in early 2000, many entrepreneurs jumped on the bandwagon of the new economy. When the bubble burst, their
public failure left a scar on entrepreneurship.” Haug was surprised to hear from the director of a technology incubator in
Korea that a call for projects received only fifty submissions, “a low figure when you know how innovative and forward-thinking
Korea really is.” To Haug, who has also explored the Israeli tech scene, “Israelis seem to be on the other side of the spectrum.
They don’t care about the social price of failure and they develop their projects regardless of the economic or political
situation.”
⁷

So when Swersky Sofer hosts visitors from Singapore, Korea, and many other countries, the challenge is how to convey the cultural
aspects that make Israel’s start-up scene tick. Conscription, serving in the reserves, living under threat, and even being
technologically savvy are not enough. What, then, are the other ingredients?

“I’ll give you an analogy from an entirely different perspective,” Tal Riesenfeld told us matter-of-factly. “If you want to
know how we teach improvisation, just look at Apollo. What Gene Kranz did at NASA—which American historians hold up as model
leadership—is an example of what’s expected from many Israeli commanders in the battlefield.” His response to our question
about Israeli innovation seemed completely out of context, but he was speaking from experience. During his second year at
Harvard Business School, Riesenfeld launched a start-up with one of his fellow Israeli commandos. They presented their proposal
at the Harvard business plan competition and beat out the seventy other teams for first place.
⁸