Notes on Start-Up Nation

One of the most enjoyable books I've recently completed is Start-Up Nation by Dan Senor and Saul Singer. The book's subject is the entrepreneurial culture in Israel, the country with the greatest concentration of innovation in the world. I found much of the book eye-opening and informative, and I definitely learned a lot about Israel that I didn't know, including many lessons that could translate to improve innovation in the US.

Introduction

• Example of Israeli innovation: electric cars/BetterPlace. Goal to get one country completely off oil.
  
• Israeli population in constant state of dissatisfaction, which causes continuous rethinking of the status quo.
  
• Israel has more VCs and startups than any other country.
  
• 125% cell phone penetration (people have more than 1 cell phone)
  
• Constant struggle against adversity critical part of Jewish culture and fuels entrepreneurs
  
• Compulsory military service
  
• Culture of informality
• Culture of questioning authority
  
• Completely OK to fail in Israel
  

Part 1: The Little Nation That Could

Ch. 1: Resistance

• Chutzpah 
  
• PayPal bought fraud tracking system from Israeli start-up.
  
• Intel in Israel innovated on microprocessors and created the new parallel/multi-core architecture.
  
• Lots of debate in Israeli companies; no bullshit.
  
• Constantly challenging authority; healthy conflict.
  

Ch. 2: Battlefield Entrepreneurs

• Military constantly improvising in war; improvisation useful skill for entrepreneur.
  
• More autonomy and decentralized control in Israeli military than US military
  
• Israeli military is anti-hierarchical.
  
• Questioning superiors built into the Talmud
  

Part 2: Seeding a Culture of Innovation

Ch. 3: People of the Book

• Famous guestbook where travelers leave recommendations for others in hostel
  
• Israelis travel a lot.
  
• Go far, stay long, see deep
  
• Feel confined in Israel after military service
  
• Internet software another way to get out (besides travel)
  
• "Israel Inside" (like Intel Inside): most innovations we now depend on in all of our gadgets came from Israel.
  

Ch. 4: Harvard, Princeton, and Yale

• Hardcore training and recruiting to get into elite military units
  
• Reserve unit team is one's second family throughout life.
  
• 8200 intelligence unit alumni are elite/most intelligent.
  
• "Tabiyot" most selective group
  
• Key training: finding cross-disciplinary solutions without guidance
  
• Become good at a lot of things instead of one
  
• Maturity at a young age
  
• Highest % that go to university of any country
  
• Military reserves remain a part of everyone's life for decades (annual service requirement)
  
• Everyone knows everyone.
  
• People take full ownership of missions and business.
  
• Little connection to military in US as a civilian
  

Ch. 5: Where Order Meets Chaos

• Singapore adopted Israeli military model.
  
• But not as innovative as Israel
  
• Culture missing initiative, risk taking, agility
  
• Apollo mission good example of experimentation and questioning
  
• Columbia disaster bad example of strict, routine management
  
• Israeli military practices: daily debrief, deconstructing mistakes and experiments
  
• Debrief as important as the war
  
• Decentralizing authority
  

Part 3: Beginnings

Ch. 6: An Industrial Policy That Works

• Key factors that turned around economy: new immigration, new war, new VC industry

Ch. 7: Immigration: The Google Guys' Challenge

• Brin and Page visited a high school in Israel
  
• Many Soviet immigrants; hard science background, drive for excellence in Soviet Jews
  
• Israel has intense focus on letting in as many immigrants as possible.
  

Ch. 8: The Diaspora

• Many engineers travel back and forth between Israel and SF
  

Ch. 9: The Buffett Test

• Google Israel created Google Suggest
  
• Industry and business goes on during war; no one stops coming to work.
  

Ch. 10: Yosma the Match

• VC funding critical to industry growth; many sources of capital.
  
• BIRD financing from government endowment
  
• Yosma VC funding through government matching foreign VC investment
  
• Allowed performance fees for all asset managers, created finance industry
  

Part 4: Country with a Motive

Ch. 11: Betrayal and Opportunity

• France cut off military airplane supplies at key moment of Middle East conflict
  
• Had to develop on own; was actually better for Israel in long run to be self-sufficient and fueled their deep innovation in aerospace and nuclear power.
  

Ch. 12: From Nosedowns to Geysers

• No bad lending practices or sub-prime crisis in Israel
  
• Innovation continues
  

Conclusion: Farmers of High-Tech

• Perez was a founder of industries, serial entrepreneur, 2 time prime minister.
  
• View of agriculture: 95% science
  
• Ben Gurion thought the future lay in science as well.
  
• Nuclear power
  
• Jewish culture of dissatisfaction
  
• Great universities, start-up ecosystem, military culture
  
• Aggressiveness and team orientation
  
• Failure not a stigma
  
• Idea factory