Practicing and teaching entrepreneurship

Liora Katzenstein celebrates the first decade of her hands-on school.

November 2, 2006 08:21
liora katzenstein 88 298

liora katzenstein 88 298. (photo credit: )


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At first glance, Liora Katzenstein looks nowhere near her just-over 50 years of age. Her figure is trim, slim and curvaceous with a pronounced, nipped-in waistline rarely seen in middle-aged women and the only lines in her face are the laugh lines around her eyes. If there is such a thing as a stereotyped image for any particular profession, Katzenstein, clad in her form-fitting dark pants and white, high-necked, sleeveless sweater, looks more like an aerobics instructor than a professor or a company director. The only give-away to the latter is the black Gucci bag that swings from her shoulder. So much for stereotypes. For as long as she can remember, Katzenstein has been a high achiever with big dreams, growing up at a time when Israel was not the land of plenty it is today. She remembers that when she was a youngster there were two cheeses, one white and one yellow, she tells me as we sip coffee in a pleasant Ramat Aviv Gimmel coffee shop located within easy walking distance of her Institute for the Study of Entrepreneurship and Management Innovation, better known by its acronym ISEMI. Katzenstein is celebrating ISEMI's first decade, and it gives her a great deal of pleasure to know that, trite as it may sound, she has indeed made a difference. The austerity of her childhood bothered her. There was something wrong in an environment in which there were only two kinds of cheese - believed there should be more and that people should be more creative. That was the seed of her entrepreneurship, though at the time the word was not part of her vocabulary. Katzenstein was born in Haifa on December 25, 1955. She attended the prestigious Reali School, where she was an outstanding student. Like many Israeli youngsters in the early 1970s, she dreamed of traveling abroad - not just taking a backpack to some exotic destination, but having the ability to travel widely in relative comfort. For someone who wasn't born with a silver spoon in her mouth, the best solution was to become a professional interpreter. Good interpreters were often employed by high levels of government and traveled abroad with ministerial or other important delegations. So she went to Geneva to study languages, but discovered in the course of her studies that being an interpreter did not suit her temperament - she was a young woman who liked to have her own say and did not want to be confined to merely translating the words of others. One of her teachers suggested she enroll in the Graduate School for International Studies - a school for diplomats - where her degree would include the qualification to work as an interpreter if she felt inclined. She already knew Arabic from school and German from home, but perfected her fluency in the latter in Geneva along with English and French. While in Geneva, she received a scholarship to Tufts University in Boston to study for an MA in Law and Diplomacy, but what she really wanted was to go to Harvard. It was her good fortune that the Fletcher School of Diplomacy at Tufts had an exchange arrangement with the Harvard Business School - so she slept at Fletcher, but spent most of her time at Harvard where, after half a year, she became a teacher and research assistant. She moved over to Harvard which was introducing a new entrepreneurship course in business education. She had always been looking for a word to describe what she really wanted to do, and when entrepreneurship entered her lexicon, she knew that she had found it. While at Harvard, she enlisted for a Ph.D course in Geneva, and returned there in 1980 to finalize it. Yet, while she wanted to see the world, she had no intention of living permanently outside Israel. She returned in 1982 to take up a position with the Jerusalem Institute of Management, which was located at the back of Tel Aviv University and represented Harvard in Israel by bringing in major Harvard professors to teach within leading business enterprises in Israel. One of her students at the time was Shlomo Nehama who has since made a big name for himself in Israeli banking circles. "He knew at a young age what he wanted to do," she recalls. After three years at JIM, Katzenstein became Associate Director of the BIRD Foundation, a bi-national industrial research and development foundation founded in 1977 to fund joint US-Israeli teams in the development and commercialization of innovative technological products. At that time, she says, the BIRD Foundation was the only venture capital group in Israel . After three years of bringing Israeli and American companies together under the auspices of BIRD, she left to do the same thing independently, but on a broader scale, and established her own company Forum International, in which she has partners from all over the world. Concurrent with running her own company, she taught entrepreneurial courses at the Haifa Technion, the IDF, government bodies and in business and academic forums in Singapore and Germany. She also took on assignments to either manage or in some way oversee the start of new companies such as biotech company Scopus Genetics; Athena, which is now Veritas; and TISOM, the Tel Aviv International School of Management founded by Aharon Dovrat as Israel's first private university. After a year at TISOM, Katzenstein developed the urge to start a similar project of her own. She had identified a need to establish a business school geared less to management and more to internationally minded entrepreneurs. Experience had taught her that the program at her school should be integrated rather than disciplined. She looked around the world for an integrated program and found it in Australia, which surprised her. "The natural place for Israelis to look was the US," she says, "but the US didn't have what I wanted. I found what I was looking for Down Under." She stumbled across Swinburne University quite by chance and, in May 1996, made her first trip to Australia to meet with Prof. Morrie Gillin, the founder of the program who will be in Israel for ISEMI's tenth anniversary celebrations to be held at the residence of Australian Ambassador James Larsen. It has become a tradition to hold ISEMI graduation ceremonies and other important events at the residence of or under the auspices of the Australian Ambassador. Working in partnership with Swinburne, ISEMI has been offering degree courses as well as random courses for the past 10 years. Some 1,000 students have enrolled in each of the tracks. "We define ourselves as a home for entrepreneurs," says Katzenstein, explaining that the course is designed to give tools to aspiring young hi-tech entrepreneurs with high accounting and low funds. Their projects are often developed in the classroom, after which Katzenstein arranges introductions to venture capitalists and possible venture partners. She also seeks to encourage women and Arab entrepreneurs, many of whom often lack the financial resources to pay for the course. When this happens, she works hard to find scholarships for them. The fee for a full degree course is $15,000. Among the courses taught at ISEMI are how to do business with China and how to do business on the Internet. Everyone who teaches at ISEMI has international business experience, and though she prefers that they also have academic degrees, she does not make this an absolute qualification. Asked if, for instance, she would allow Lev Leviev or Pnina Rosenblum, neither of whom have academic training, to teach at ISEMI, the reply is instantly affirmative. "I adore Lev Leviev and Pnina Rosenblum," she says, explaining that they are examples of what she is trying to teach. "In academics you're taught to examine everything carefully, to explore and to look for proof. In business you have to use your instincts and to make snap decisions." When Katzenstein first entered into her partnership with Swinburne, the political atmosphere was such that she believed that she could attract students from Jordan and the Palestinian Authority as well as from Israel and other parts of the world. In fact, in her first class of 20 students, 70 percent were Arabs, most of whom were recruited via the Israel-Arab Center for Economic Development. Since then, she has had Arab students in every class, but none from Jordan. The Arab students are aware that she is trying to improve the quality of their lives, and if they can reciprocate in any way, they do. Katzenstein tells the story that when her car was stolen she called one of her Arab students at Um-el-Fahm. He traced the stolen vehicle to Jenin and was able to get it back for her quickly and at no cost. Aside from running her own company and her own school, Katzenstein sits on the boards of directors of three publicly traded companies of the RAD Group in the US; three Israeli companies, Clal Insurance, Degem Industries and Polysac, which are traded on the Tel Aviv Stock Exchange, and four private companies in which she is a partner. There are several other major companies on whose boards she has sat in the past. How does she find the time for all this activity? She gives a stock reply. "You want to get a job done, give it to a busy person." In more serious vein, she explains that she tries to be organized and to set priorities for herself. She has educated her menfolk, namely her husband Avraham, and their two sons, Dan, 19, and Jonathan, 14, to be independent. "A question that starts with 'Where is…' is not allowed," she says. She describes her husband as a great helpmate. He's in real estate and hi-tech and manages her real estate interests and financial affairs. "If someone needs to take a kid to a doctor," she confesses, "it's more likely him than me." But when it comes to the boys' education, she's the one that takes care of every detail. She also takes them abroad to teach them about the world at large. Katzenstein exudes an aura of calm control, which belies a lot of the turmoil she has experienced in setting up and running her school. "Fighting for customers and recognition is not easy," she says, noting that times were particularly difficult during the Intifada when not only the Arab student intake declined but also that from abroad. She was heartened, however, by the constant help and encouragement that she received from Swinburne and from the Australia-Israel Chamber of Commerce. Very often, situations were financially tough. To a question as to the source of her financing, Katzenstein replies candidly: "My children's inheritance - but they're growing up in a spirit of entrepreneurship," which means that she expects them to find a way to redeem that lost inheritance. Although she would like to say her Arab students have gone on to reap some of the same successes as her other students, this has not yet happened. "The Arabs are quite successful with independent businesses," she says, "especially small businesses which they would not run as well without the course. But although the Arab students are as good as any, the opportunities for Israeli Arabs are few, and even less for Palestinians." One would imagine, given Katzenstein's busy schedule that she would not have time for anything else. In fact, though, she is an avid traveler, who visits Australia at least once a year, goes to Europe frequently and, of course, the US, as well. She works out at a gym three times a week and takes care of her appearance and loves to read, but has not read as much as she would have liked during the past 10 years. She also loves to eat in gourmet restaurants. So much so that her friends joke that she has two Ph.Ds - one in economics and the other in restaurants. When she turned 50 last December, Katzenstein made a conscious decision to spend more time with her family and herself, and not to continue burning the midnight oil in her office. "I'm happy about it," she says, "but the boys are not. If they see me at home before 10 p.m. they want to know what I'm doing there." Although she has been able to break through the glass ceiling with relative ease, Katzenstein is well aware that for many women it's much harder than for men to break into business and to achieve executive roles. "I'm in favor of affirmative action to have more women on boards of directors and on public committees," she says. "This is something that is very much called for in Israel or we'll never get there. At this point in time, we still need preferential treatment." Busy as she is, and determined as she is to spend more time with her family, Katzenstein, nevertheless, aims to continue to be involved in entrepreneurial ventures in Israel and abroad. She has had several offers to go into politics, but at the time business and educational involvements were more appealing - she may, however, consider entering politics in the future. Meanwhile, she's also busy attending to a series of events to mark ISEMI's first 10 years. And, contrary to what is the norm in Israel, Katzenstein does not like to hog credit for herself, but is passionate about giving credit where it is due to people such as Sam Burshtein who co-founded ISEMI and is a visiting lecturer; Leon Kempler of the Australia-Israel Chamber of Commerce, ISEMI academic director Prof. Michael Epstein, whom she refers to as "my right hand;" and, of course, Gillin, who is one of her gurus. One can only wonder what the next 10 years will hold. Profession: Entrepreneur, teacher, lecturer, corporate director, interpreter fluent in Hebrew, Arabic, German, English, French, Italian Age: 50 Status: Married with two sons Level of education: MALD in Law and Diplomacy from Tufts University Boston , Visiting Doctoral Scholarship Harvard Graduate School of Business Administration; Ph.D. in International Economics International Studies University of Geneva Professional milestones: Setting up own companies, especially ISEMI. Gaining acceptance of and recognition for the school which had she known in advance what it would take emotionally, time-wise and financially, might not have embarked on the project. Katzenstein's 10 commandments for the budding entrepreneur Raise capital when you don't need it. Focus on a well defined business field or niche Listen to expert advice and don't hesitate to pay for professional services Choose a team of professionals and don't compromise on the quality of manpower Don't argue with the market Develop a strategic business view as early as possible and learn from your mistakes Enlist the support of family and friends Define correctly the comparative advantage of your product from the user's standpoint Stay in touch; network and learn from other entrepreneurs Learn about the "life cycles" of the entrepreneur and the business

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