Shukla in The New York Times
March 14, 2005

Larta Institute CEO Rohit Shukla was extensively quoted in I Got My M.B.A. in the Israeli Army, an article that appeared March 3, 2005 in The New York Times. Larta's Israel-U.S. Venture Bridge Program, which provides executive training and incubation to Israeli life science companies, was highlighted in the article, included in its entirety below.

I Got My M.B.A. in the Israeli Army

By Betsy Cummings
New York Times
Originally Published March 3, 2005

With its strict hierarchy, a nation's military is not generally considered an entrepreneurial breeding ground. But it is in Israel, and that country's experience in drilling the virtues of agility and creative thinking into its fighting forces may presage a similar movement in the United States, some analysts say.

For a small army protecting a small country bordered by enemies, "there is no option but success," said Izhar Shay, a former paratrooper in the Israeli Army and the chief executive of V-Secure Technologies, a network security company in Saddle Brook, N.J., that helps companies prevent attacks on their computer systems. "This is a perfect analogy to the business environment."

Mr. Shay and other veterans say the Israeli military trains its soldiers to think quickly and act nimbly, adjusting to circumstances as they arise rather than waiting for orders. While the American military in the post-9/11 era increasingly favors those same qualities, notably in the Special Forces that it deploys deep inside enemy territory, Israel has been giving its warriors greater latitude to call their own shots ever since its founding more than half a century ago.

As a result, a disproportionate number of Israel veterans begin their own businesses, often in highly competitive technical fields. "In Israel, you're not dealing with a typical military culture," said Loren Thompson, an analyst at the Lexington Institute, a military and foreign policy research center financed by foundations, corporations and individuals in Alexandria, Va.

"U.S. veterans," he said, "are more likely to go into large industrial companies than they are start-up businesses and cutting-edge products. The stereotype is that Israelis are inveterate entrepreneurs, and I don't think that's as true of American soldiers."

By virtue of Israel's entrepreneurial culture and close ties to America, Israeli start-ups have a strong presence in the United States. More Israeli companies are listed on Nasdaq than those of any other country outside North America - 70 out of 340 foreign listings. (Canada has 80.)

Israeli startups have raised more than $5.2 billion in initial public offerings on NASDAQ in the last five years, and Israel is one of the world's largest recipients of venture-capital financing.

Many Israeli entrepreneurs who venture into the North American market are old military hands. Mr. Shay, V-Secure's chief executive, spent over four years on active duty, two of them in Lebanon in the early 1980's. When he left the military in 1985, Mr. Shay, 41, started several ventures, including an Internet securities firm in 1998 called Business Layers, which he later sold to Netegrity Inc., a larger enterprise securities firm, which is now a division of the software company Computer Associates International in Islandia, N.Y.

He credits his military service with his entrepreneurial drive, business success and approach to management. "Ours is a small army compared to those around Israel," Mr. Shay said. "So no matter what happens, you have to be successful and accomplish your goals. A lack of resources and people and lack of time are never excuses for not accomplishing goals. Take that to the business environment where a small start-up company begins attacking a big market and those challenges look similar."

The mere fact of living in Israel, a Maryland-size nation that is poor in natural resources and limited in the number of troops it can field, cultivates in its fighting forces a survival mentality that is the hallmark of the entrepreneur. The threat to them is real, ever present and close by; they are not just defending their nation, they are defending their neighborhoods and their families.

"It's a different feeling than the U.S. military fighting in Afghanistan or Iraq, thousands of miles from home," Mr. Shay said. "In the Israeli Army, you are sometimes 50 to 60 miles from where your family lives. So everything is very personal and your success and actions in the field have a direct effect on your family."

A lack of resources means soldiers have to be precise, outwit their enemies with greater skill and regard themselves, as members of a smaller force, more personally accountable for their actions - all elements inherent in making a business thrive.

The technological prowess of the Israeli military is a catalyst for entrepreneurship as well. A significant number of Israeli Army veterans open technology businesses, armed with high-level expertise, products and services that the Israeli military is known for producing.

Larta and the U.S.-Israel Science and Technology Foundation sponsor workshops to help Israeli entrepreneurs become well versed in the culture of American business, finance and market resources and information. Such programs are having their effect on Israeli entrepreneurship. The number of Israeli biotechnology companies, for example, increased to 160 in 2000 from 30 in 1990, accounting for 2.5 percent of all biotech sales globally, according to statistics from the Israel National Biotechnology Committee.

As the nature of warfare has evolved since the end of the cold war and the rise of Islamic terrorism, analysts say, the Israeli military's habit of producing entrepreneurs may soon spread to other countries. Many are adopting a less hierarchical approach and are teaching officers to be more creative thinkers.

The trend is already clear in the United States, Mr. Thompson said. "Now its more about initiative, risk taking, marketing and other qualities we associate with entrepreneurial behavior," he said.

Zvi Alon, an Israeli veteran, said his entrepreneurial spirit started in childhood, not the army. "In my early teens, I tried to start a bunch of small businesses," Mr. Alon said. "It wasn't just selling cookies. We went to different places in Israel trying to sell books and educational materials to other kids." But, the army, he said, was the environment that emboldened and fine-tuned his entrepreneurial drive.

Mr. Alon points to ordeals like that he and five comrades endured six miles out in the Mediterranean when their inflatable boat began to leak. Loaded with a cargo of weapons, Mr. Alon and his crew were forced to think on the fly. They decided to forget repairing the hole. Instead, they jumped into the water, severed the leaking part of the segmented boat and reassembled the other boat sections still inflated. The weapons were saved, though Mr. Alon and the others remained in the water for eight hours before they were rescued.

At other times, Mr. Alon went through drills in which he was left in the middle of unfamiliar terrain and told to find his way out, all based on his own decisions, not on directions from supervisors. Those may be experiences for any officer in any military, but Mr. Alon said the Israeli military had a more emphatic management style that encouraged soldiers to devise their own solutions.

After leaving the military, Mr. Alon attended Technion Israel Institute of Technology, then moved to the United States, where he held jobs at Intel and at a series of start-ups before beginning NetManage, a software-solutions company in Cupertino, Calif., in 1990; it has grown into a $50 million company with 240 employees.

Israeli military leaders, Mr. Alon stressed, do not want soldiers so independent that they defy orders. But "there is a very strong emphasis on being creative and being innovative," he said. In Israel, he added: "Entrepreneurship starts with some sort of cultural hot pad that fosters that type of behavior. Then you go into the military, and it gets augmented and sharpened."

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