Hope for Israeli-Palestinian Collaboration

One of the many sad things about the times we live in is the universal disillusionment with the prospects of ever achieving peace between Israelis and Palestinians. I will not dwell on how we got here and who’s to blame (hint – it’s everyone). That’s a topic for another blog (if not a book).

I will however describe my recent experience in trying to do something about it.

While I was taking some time off from my software entrepreneurship and management career, I was approached by Gershon Baskin and Hanna Siniora from IPCRI (a joint Israeli-Palestinian think-tank), to help set up an Israeli-Palestinian business forum headed jointly by an Israeli and a Palestinian. The purpose of this forum was to facilitate cross-territory business cooperation and we succeeded in getting an initial grant from a US organization call CIPE – The Center for International Private Enterprise (A bipartisan, congress funded organization that’s part of the National Endowment for Democracy).

I happily agreed and joined Fouad Jabr, my Palestinian counterpart, in putting together ideas for such a forum. Coming from high-tech entrepreneurial background, the first thing I looked into is where the Palestinians are in this area, and whether this is something we can build on.

I was pleasantly surprised.

Over the course of a couple of months in late 2010, Fouad and I conducted a comprehensive set of interviews with key Israeli and Palestinian individuals associated with high-tech both in the private and public sectors.  Based on these interviews and discussions, as well as access to research conducted by various organizations, several conclusions became apparent:

• While the overwhelming proportion of IT professionals in the Palestinian Authority (PA) are employed in the technology outsourcing industry (through the 20 or so IT companies like ASAL, EXALT and Jaffa.net), there is a growing trend among the more than 2,000 annual graduates of Palestinian tech-oriented academic institutions to assume initiatives as entrepreneurs. This is coupled with a sophisticated knowledge of all the new internet-related innovations of the last few years. This generation of potential technology entrepreneurs, in their 20s and 30s, is very technology-savvy, and keen on leveraging these capabilities in their line of work. This was evidenced by the extremely high demand in Palestine for participation in both the Tel-Aviv Start-up Weekend hosted for the first time by the Peres Center for Peace on July 14-16, 2010 as well as in MercyCorp’s Enterprise-Building Workshops. Another indication to this growing trend was the impressive list of technology-oriented new ventures that were presented at the Entrepreneurship Forum gathering, an initiative of the ExpoTech Technology Week, held in Albireh on November 2-5, 2009.
• There are a few private sector initiatives already on the go (such as Middle East Venture Capital Fund, PiTech Ventures, Siraj fund, Palestine Growth Capital Fund and PICTI) that aim to profit from this growing trend, primarily through the introduction of venture-capital(VC) to jumpstart technology-oriented enterprises.
• While there are quite a few organizations dealing with Israeli-Palestinian business cooperation (e.g. IPCC, PIBF, MercyCorp and the Peres Center for Peace), only one (MercyCorp) is specifically dedicating itself to this promising area of collaboration on technology-based entrepreneurship. The work that has been done to date sets the stage for building an organization dedicated to a sustained, on-going and holistic set of programs and activities for facilitating a fundamental change in the Palestinian technology entrepreneurship scene.
• The innovative use of new technologies (e.g. Internet, imaging and Cloud Computing) in traditional businesses (e.g. manufacturing, printing, commerce) as well as the introduction of new innovative technologies especially in Information Technology and Telecommunications are areas where Israeli excellence on the one hand, and Palestinian capabilities and openness on the other hand offer a significant opportunity for creating strong and sustainable cross-boundary collaboration.

However – despite these promising trends for the Palestinian technology and business community, their development is hindered by a couple of significant hurdles:

• A significant gap in knowledge, experience and support in every aspect of building a technology start-up in those entrepreneurs who are willing to step forward and assume the risks associated with building innovative technology-based companies from scratch.
• This barrier is compounded by quite a few legal and economic-policy obstacles in the Palestinian legislative system and bureaucracy that prevent such venture backed technology enterprises from becoming commonplace in the Palestinian economy. Given the political deadlock of the last 3 years, there is also a great public-sector reluctance to actively seek and support partnerships with Israel.
• A low cultural tolerance for the kind of aggressive risk-taking associated with this kind of entrepreneurship, and especially with its unavoidable failures from time to time.

Subsequent to our research, we put forth a proposal for a kind of Israeli-Palestinian accelerator, style YCombinator and Seedcamp that would bring Israeli experience, mentoring and connections to the global high-tech community and make it available to Palestinian entrepreneurs.

The rest of the story is anticlimactic. The CIPE follow-up grant that was promised for this accelerator got canned, and pushing forward on this got very difficult given everything else I got involved with.

I am however happy to see that the entrepreneurial spark is still there, mostly in Ramallah, with initiatives like Bazinga and one of its founders Mohammad Khatib. Check it out – it will give you hope. I believe some well funded private-sector, high-tech sponsor will eventually come along and capitalize on this and make it happen.

On Leaderdship

There is no subject in the business or political-science realm that has generated more literary output than that elusive thing called Leadership. Do a search in Amazon on the word “leadership”, and you’ll get more than 60,000 titles devoted to the subject from ludicrous “how to” manuals (style “How to Build The Leader Within You”) to political biographies sharing personal insights on this question, style Rudy Giuliani’s “Leadership”.
I have under my belt 20 years of reading books on the subject, and relating them to my personal CEO experience as well as to the observation of countless people I’ve met and interacted with. Based on that, I can now give you my bottom line conclusion: all the books I’ve read on the subject were a waste of valuable reading time !

All except one.

The one true gem of a book that has inspired me and has exhibited what I consider to be the best and most unique approach to the subject is a small, unassuming book titled “The Drama of Leadership” by Patricia Pitcher written in 1997. Patricia Pitcher is the head of the Doctoral Program of Canada’s oldest and largest business school – the Montreal Ecole des Hautes Etudes Commerciales. I believe I’ve read, and re-read her book more than five times over the years.

What makes Pitcher’s book so compelling is the fact that she approaches the subject from an empirical way of analyzing a specific organization she’s worked with over many years, and distilling the different leadership styles she encountered (she identifies three, whom she terms Artists, Craftsmen and Technocrats). What is amazing about her analysis is her insightful penetration not just to the different behaviors of these different leadership types, but also to an analysis of their “inner worlds”: their emotional, temperamental and cognitive make up. What emerges is a wonderfully deep and rich analysis not just of how the different leaders behave the way they do, but more importantly – why. In the course of this analysis, Pitcher throws to the bin the “conventional wisdom” thinking that anyone can be a leader. She makes no excuses for stating clearly that while there are different types of leaders, all are born with, and acquire their leadership traits early in their life. She also makes no qualms about which in her mind are the “right” kind of leaders (read the book to find out).

But that is not all. After this wonderful analysis, Pitcher goes on to unfold what I believe is the climax of her book. An analysis of how these different types of leaders interact with one another. As I mentioned, her analysis follows a financial services organization she worked with for the better part of 15 years. She describes the unfolding drama of how the interaction between these types of leaders helped shape, grow and subsequently destroy this organization (Hence the title of the book). Truly a masterpiece analysis written like a great novel.

What impacted me in a powerful way was Pitcher’s depth of understanding of human nature that underlies a person’s behavior as a leader. More importantly, her analysis of the interaction between different types of leaders resonated profoundly with my personal and professional life experience, that in any human organization, what is more important than individual traits and behaviors, are the interactions between the different individuals. To me, building an organization and seeing it work through this drama of interaction, is a mystery that has no “canned” or “right way” case-study, solution or prescription. Rather each is a truly unique and almost fragile story, with the true leader being the one that manages to capture all of this individual and collective complexity and uniqueness while somehow making it work.

A Desert Mystery

As part of my Archaeology studies, I recently had the pleasure of writing a paper on one of the archaeological gems of Israel, and surprisingly – one of the least known or visited (by tourists and Israelis alike)

I’m referring to a place called Shivta, located in the middle of the Negev Desert, about 2.5 hours drive from Tel-Aviv. The place is amazing. You drive mile after mile in a barren desert landscape, with barely a tree or a shrub in sight. And then – out of nowhere – an almost fully-preserved ancient city !

Shivta was a small city, a village really, of about 2,500 people that was occupied for about 350 years during the late-Roman and byzantine periods (roughly 300-638 AD). It was then abandoned – only to be rediscovered in the late 19th century by British archaeologists-come-spies, the most famous being T.E. Lawrence – better known as “Lawrence of Arabia“. (as an aside – the story of the archaeologists/spies of the pre-WWI period is a tale of its own – to be told some other time)

I was drawn to the place by the mystery of it all. Why in the world would a city emerge out of nowhere and in the middle of nowhere, only to disappear as mysteriously as it emerged ?

My research led me to conclude that business and money were the driving forces behind the emergence of Shivta (isn’t it always ?…). The story of the place is of course more complex, but the primary reason for Shivta’s emergence has to do with the Byzantine Mediterranean trade. More specifically – wine trade.

As it happens, the northern Negev, where Shivta is located, has a climate and terrain that under the right agricultural techniques can be perfect for growing vines and producing wine. Apparently, during the 4-7 centuries AD, the region’s wines were a “brand name” throughout the Mediterranean, as far west as France. They were exported through the Gaza port, which is some 50Km to the north, and were therefore known as the “Vinum Gazetum”. A highly prized and high-priced wine.

No less of a mystery is why this place flourished for only 3 centuries, and only during the Byzantine control of Palestine. Why had this place, and 3-4 other like it in a 20Km radius, not emerged before this period, nor after it. It was not until the 20th century with the Zionist movement that this area enjoyed similar levels of habitation and cultivation.

My thoughts are that – again – the reasons are to be found in business and economics. In a nutshell, the late Roman and early Byzantine Empires brought a level of security to the whole Mediterranean region, created vast demand for olive oil and wine that are the long-established staple products of the Levant and made large imperial investments in the area that was the cradle of Christianity, the state religion from 325 AD. All of these elements did not exist on such a scale before or after, and their confluence at the same time was the “trigger” that enabled the emergence and flourishing of settlements in such a “hostile” environment. The Muslim occupation of 638 AD brought all of this to an abrupt end. Wine is not a legitimate consumption item under Islam, the Mediterranean stopped being such a primary market for trade and Palestine or the Negev were not primary areas of interest for the muslim imperial rulers throughout their 13 centuries of domination. Because of its “delicate” climatic and geographic conditions, these major changes in political and economic conditions brought the Negev agricultural “experiment” to an abrupt end.

The way in which the wine producers of the area managed to grow vines in an area as arid as the Negev is an astonishing tale of agricultural genius – one that I will let the readers uncover for themselves. (for Hebrew readers, I attach my Shivta paper here with the full “untold” story). btw – Israeli wine producers have re-discovered the climate and terrain benefits, and the region is again exporting some superb wines.

Do not miss a visit to this place. Even if you are in Israel for only a short time.

Why Israeli Start-Ups Fail

My good friend and long time GigaSpaces partner Nati Shalom forwarded to me and to another good friend and GigaSpaces alumni Geva Perry this blog post by Steve Duplessie titled “Fail Factors – Why Startups Die: The Israeli Illusion“.

This post spurred an interesting email thread among us that I think has some good insights.

Duplessie’s post tries to analyze in a very well-written (and sometimes comic) way the billion dollar VC question – why Israeli start-ups are so successful at innovation, but fail to earn the “home run” valuations at exit time. His central theory: Israeli companies are handicapped. They are removed from THE market, both geographically and mentally. They never fully embrace the “market realities of the US” and instead pay lip service to it by hiring local sales and support teams which just ends up making matters worse. His solution: hire US CEO and execs early on, and make the transition all the way.

This topic is very near and dear to my heart – having managed companies both in the US and in Israel selling to the US. I believe I carry all of the scars – and then some. That being said – I think that fundamentally Steve is right, but for the wrong reasons. Let me explain.

The conventional wisdom that Israelis are great technologists, but morons when it comes to understanding “market realities”, i.e. marketing and business management, was a mantra a decade ago. However – there is no shortage today of savvy Israeli business executives who have lived many years in the US and feel there at home as much as they do in Israel. The fact is – Israelis understand market realities in the US no less than american executives. Furthermore – US execs tend to focus all their efforts on the US, ignoring “the rest of the world” as if it is just another small market, while Israeli execs are far more global and therefore sophisticated in their thinking and action than their US counterparts. These days – this is a big plus. True – culture gaps exist (as our GigaSpaces team can attest), but I believe these have more to do with the inherent culture gap that exists between developers and sales guys, than between Israelis and Americans.

I believe the reasons lie elsewhere. I’d like to quote Geva, who made the point in our conversation that “That said, there is a problem. But it’s not about Israeli startups necessarily, but startups not in Silicon Valley (I’m seeing similar issues with U.S. companies based in Boston). And it’s much more subtle than “thinking that knowledge of the market is not important”. It’s the fact that like in all industries and communities, there is a close-knit “old boys club” that if you are connected with it, life is much easier. and that old boys club is physically located in Silicon Valley.”

I agree with Geva 100%.
However there are grim conclusions to this line of reasoning. Either
a. You don’t build companies out of Israel; or
b. You adjust your investment strategy to accommodate for the fact that Israeli companies on average return less on investment than US ones. i.e. do more with less funding…

Both are pretty challenging:
1. The simple fact is that Israelis by definition are in Israel…and most of them like it that way. It is also true that there is a continuing fountain of innovation from there. And we also know that putting an American CEO and executive team to manage an Israeli R&D shop is the true path for disaster. So the only conclusion: We somehow have to make it work in spite of the distance from the old-boys club, or give up….(or move Israelis to the US en-mass)
2. Israeli companies still have to compete with US ones that are and will be more funded (and closer to the market and to the old-boys club). So less funding puts them at a double handicap.

Here is where the new business models of SaaS and low-touch marketing, sales and operations can really allow Israeli-based companies to overcome at least some of their inherent handicaps. But that is a topic for another discussion.
Regardless however – home-run valuations are at the end of the day closely related to who you know and more importantly who your investor knows and that goes back to Geva’s point about the club.

Like Steve Duplessie said: Who said life is easy or fair ? This cliche is especially true for Israelis. But then again it’s always been stacked against us and somehow we’ve manged to do OK, so I’m guessing we’ll somehow figure it out. Worse case, we won’t be filthy rich, just well off….

The Tricky Logic of Appeasment

I recently came across this NYTimes Op-Ed by Roger Cohen titled “An Ordinary Israel”.

After breathing deeply to calm my nerves, I read it again with a more detached frame-of-mind and I finally think I get what Roger Cohen is trying to do in this article.

Despite his instincts, deep down Mr. Cohen understands the rationale for Israel’s nuclear strategy – It is born out of a tangible existential threat that has never fully disappeared since the holocaust or the circumstances of its creation in 1948. Furthermore, Israel’s paranoia is fueled daily by the fact that it is the only nation in the UN whose very legitimacy is put in question (despite having been officially created by that same UN) and its existence is almost daily challenged in the court of public opinion. Just read some of the comments to his article to understand the level of de-legitimization it attracts.

However – his central theme is that Israel’s nuclear capability is the cause for Iran seeking one. Mr. Cohen knows that Israel’s nuclear policy is derived directly from its “holocaust complex” and feeling of existential threat.
So how does Mr. Cohen accommodate the Iranian bid for nuclear technology ? by de-legitimizing Israel’s nuclear capability. And how do de-legitimize that given the rationale behind it ? simple. You downplay the Holocaust and the threat ! You tell the Israelis that they should really get over their Holocaust anxiety. After all “it happened 65 years ago. Its perpetrators are dead or dying”. Amazing logic ! Sure – it was an awful thing and all that, but really – it has nothing to do with how strong Israel is today, right ?

Wrong !
Am I the only one seeing the logical connection to Ahmedinejad’s Holocaust denials ? Mr. Cohen’s thesis is only a shade lighter than Ahmedinejad’s. Each in his own way is denying the imperative of Israel’s nuclear policy by “wishing away” the underpinning of that policy: namely the Holocaust, and its continued feeling of national vulnerability.

But his lack of historical understanding goes even further. Does anyone besides Mr. Cohen and his fans really believe that had Israel not existed or did not have a nuclear capability – Iran would not be seeking one today ? Iran’s bid for regional power and a fascist “return to greatness” ideology fueled by its Shi’ite religion is the force behind its nuclear ambitions. Nothing short of achieving or destroying it will change this motivation. Its rabid anti-Semitism is just a bonus…Exactly like German Nazism at the time. In fact Iran’s historical, philosophical and ideological resemblance to the rise of German Nazism is striking. If history has taught us anything, and us Jews more than anyone, it is that ideology drives politics, and that anything is possible in human affairs when an ideology gathers enough power – including the industrial extermination of millions of innocent people.

So excuse us for being a little paranoid, but even paranoids have real enemies. Mr. Cohen tells us to “Cut the posturing and deal with reality” ? I couldn’t agree more. Until the reality is that one billion Muslims accept a Jewish homeland in their midst, and a hostile UN drops its daily obsession with our legitimacy, we will keep our nuclear capability – thank you very much. Until that day, the reality Mr. Cohen advocates dictates that we keep up our guard, conventional or otherwise, even if it means we are considered exceptional by the likes of Mr. Cohen and his fans.

Mr. Cohen – Take your Iran appeasement instincts somewhere else. We’re not betting our survival on anyone’s goodwill. Certainly not with neighbors like Iran, Hamas, Hezbollah and friends like the UN. That’s what “never again” means.

Hello world!

About time I got started…

Follow this blog, and you’ll be treated to random thoughts about my passions in life: Software, archaeology, business, history,  psychology, management and observing human nature.

How is all related, you ask ?

Well – it’s not. But that’s the whole point of blogging – isn’t it? You write about anything you fancy – and everyone else can take a hike.

So here goes…