The Investor's Shelf — one book
Start-Up Nation

Start-Up Nation

Dan Senor, Saul Singer
2009
T2 320 pages · about 5h 20m to read OL13775244Wgoodreads

The standard explanation of the technology cluster and its military roots.

Summary

Senor and Singer argue that Israel produces a disproportionate number of technology companies relative to its size, and examine the conditions they believe explain it.

Their explanation has several parts. Military service, particularly in technical units, gives young people responsibility and technical training at an age when their peers elsewhere are in university, and produces a national network in which people who served together recognise each other for decades. The military's culture of improvisation and of junior personnel challenging seniors carries into civilian work. Immigration supplied waves of educated people who had nothing to lose, particularly from the Soviet Union in the 1990s. Government programmes including Yozma seeded a venture capital industry by matching foreign investment. Adversity and the absence of a domestic market forced companies to build for export from the first day. And a cultural tolerance of failure and of direct argument removes the social cost of an unsuccessful venture.

The book is well reported and the specific mechanisms are described concretely, particularly the military unit networks and the Yozma programme.

It is also advocacy, written with a purpose, and the analysis is thin on the counter-explanations: the very large American defence and aid relationship, the diaspora capital and market access, the concentration in a small number of sectors, the limited number of companies that scaled rather than being acquired, and the political and security context which the book treats as a source of advantage. Read it for the mechanisms and seek the assessment elsewhere.

Key takeaways 7

  1. Military service in technical units gives young people responsibility and training at an age when peers elsewhere are still studying.
  2. Service in the same unit creates a national network in which people recognise and vouch for each other for decades afterwards.
  3. A culture in which junior personnel challenge seniors carries from military into civilian organisations and changes how decisions are made.
  4. The Yozma programme seeded a venture capital industry by matching foreign investment, which imported both capital and investment practice.
  5. The absence of a domestic market forces companies to build for export from the first day, which changes product and go-to-market decisions immediately.
  6. Immigration supplied waves of educated people with nothing to lose, which raised the supply of founders directly.
  7. Social tolerance of failure removes the personal cost of an unsuccessful venture, which is what determines whether capable people try.

Who should read it

Founders and policy readers interested in the institutional conditions that produce startup formation, read as advocacy with counter-explanations sought elsewhere.

Where it sits in the reference 2

Countries
Philosophy

Who recommended it 1

Book recommendations listed on their Good Books profile · aggregator only

Similar books 6

Chosen by shared topics, the entries that hold them, and the people who recommended both.

Innovation and the State
Innovation and the StateDan Breznitz
Israel's Technology Economy
Israel's Technology EconomyDavid Rosenberg
The Israeli Economy from the Foundation of t
The Israeli Economy from the Foundation of the State through the 21st CenturyPaul Rivlin
Banker to the Poor
Banker to the PoorMuhammad Yunus
Boulevard of Broken Dreams
Boulevard of Broken DreamsJosh Lerner
Creating Modern Capitalism
Creating Modern CapitalismThomas K. McCraw