Naomi: Tim thought some of his blog followers may be interested in reading about the entrepreneurial/venture environment in other parts of the globe, and in particular, what Americans can learn. I just spent the last 18 months living and working in Israel as General Manager of Silicon Valley Bank’s Tel Aviv office. My initial approach to the job was going to be to take my years of experience and just transplant that into a new market, afterall, I work for an organization that has a long-standing history of success. Initially I found myself saying “Why are these people doing this, it just doesn’t make sense……” But after awhile, I realized maybe I was taking the wrong approach and needed to change the way I was doing things. Working in a foreign country requires adaptability – so I took a step back and thought, what can I learn from this new style? The truth is, a lot. And entrepreneurs can too.
Chutzpah: For those of you who don’t know the word, “chutzpah”, you probably haven’t met an Israeli. In Hebrew, chutzpah is used to describe someone who has overstepped the boundaries of accepted behavior with no shame. But in Yiddish, chutzpah has developed ambivalent and even positive connotations. It can be used to express admiration for nonconformist but gutsy audacity.* In Israel, you see both versions, but all young entrepreneurs need to have a little of the Yiddish kind (the Hebrew kind I could do without!) Israelis are not afraid to dream big. If you don’t know the story of a company called Better Place, that’s a classic example of a young entrepreneur dreaming big and making it happen. I highly recommend reading “Start-Up Nation” where Chapter 1 begins with the story of Better Place. US entrepreneurs, particularly those on the East Coast, need to believe they can be the next Google. I just met with a VC this morning who relocated from the West Coast, and he indicated a big difference between the 2 coasts. Some might call the East mentality realistic, but you can’t exactly pitch an investor by saying, “We think we can sell this for maybe 2x your investment.” It needs to be 10x!
Capital Efficiency: That said, Israelis are extremely capital efficient. They are able to build working technology with significantly less Shekels. This could be the result of less venture capital available within the market, but in my opinion, it’s a matter of being more resourceful. And it has nothing to do with cheaper costs, real estate is extremely expensive. And it’s not like Israelis are manufacturing all their own parts, afterall, the entire country is only the size of New Jersey, the majority of which is bare land and desert. For many, many years, the Israelis have learned to make do with a lot less.
Directness: On one of my first meetings in Tel Aviv, I was asked my religion and my age, two subjects that would be considered taboo in an American business meeting. I’m not suggesting we start asking those questions, but there is something refreshing about the Israeli directness. It took a bit of getting used to, but I did grow fond of it fairly quickly. When the directness is applied to business I found it made for more productive meetings. I knew exactly what the prospective client wanted, what I needed to do to win the deal and whether they wanted to work with me or not. It also makes it easier to say no with no hard feelings, something I was not very good at before. There is a balancing act between ‘direct’ and ‘rude,’ but I think we can all learn to be a bit more direct (something I never thought I’d hear my sensitive self say.) At the end of the day, it’s business, not personal…..another thing the Israelis are very good at separating. After a 30 minute argument (they call it “discussion”) with one of my CFOs, she invited me to her home to celebrate one of the traditional Israeli holidays with her family. I was shocked, but she was genuine.
Negotiate: And finally, negotiate, negotiate, negotiate…..this is the Israeli national sport. While I found it to be annoying and exhausting, mainly because I was on the defensive end, it’s something entrepreneurs must do. You’d be surprised how much leverage you have. I’m probably shooting myself in the foot by offering this up, but I also learned to say no!