(photo credit: REUTERS)
“Military intelligence,” Groucho Marx once quipped, “is a contradiction in terms.” Come on, Groucho, you must be kidding. Israel’s military intelligence is no oxymoron. Along with other brainy army units, like Mamram (IDF computer systems), it is the spawning ground for what become powerful global businesses whose intelligent products make life better for people all over the world.
More than once, IDF (Israel Defense Forces) service has led to IPO (Initial Public Offering of shares by a startup company). The question is why does IDF military discipline seem to foster unruly innovative thinking, when this appears to happen almost nowhere else in the world? Take, for example, the global Israeli giant Check Point Software Technologies, a marker leader in network security. The company was born in July 1993. Three young friends – Gil Schwed, Shlomo Kramer and Marius Nacht – got together in a sweltering Tel Aviv apartment belonging to Kramer’s grandmother, to start a software business. The three realized that Internet networks could be hacked and thus needed firewall (a term they coined) protection.
They learned this in the IDF.
Schwed had served in the hi-tech Military Intelligence unit known as
8-200. There, he had developed unique firewall protection for highly
sensitive military database networks, working at times with Kramer. His
friend Marius Nacht was a graduate of Talpiot (Hebrew for small mountain
peaks), an IDF program that chooses 30 to 100 genius-IQ recruits and
puts them to work to tackle tough problems.
From time to time, Nacht hopped on his motorcycle and brought bottles of
Coke to keep the three awake, as they toiled on four hours of sleep a
night and wrote software code. In 8-200 Schwed had learned how to
develop an idea, pitch it to superiors, and run a development project to
implement it. With Check Point, he simply repeated what he had done in
8-200. Schwed, a fireball of energy who was only 24 when he launched
Check Point, is still the company’s CEO. Nacht is vice-chairman. Kramer
left to launch another startup in 2003.
At its peak in 2000, Check Point shares were worth nearly $23 billion.
Its market capitalization today is $10.9b. Its 2010 revenues exceeded
$1b., with $450 million in net profit.
Today 8-200 graduates have a network that fosters business enterprise.
One of my students once compiled a list of startups founded and/or led
by 8- 200 alumni – there were over 80 companies and the list was far
from complete. It includes such wellknown firms as Audiocodes and Nice,
as well as Mirabilus (inventor of instant messaging ICQ, later acquired
It is not just the brainy army units that create innovations. For
instance, Bernard Bar-Natan made aliya from Brooklyn in 1979 and did
abbreviated military service as a medic. He was struck by the gap
between the IDF’s hi-tech weapons and its very low-tech bandages,
unchanged since World War II.
Medics were taught to use magazines, rocks, canteens, anything, to improvise pressure bandages.
Bar-Natan invented an elastic bandage that applies 30 pounds of pressure
to a wound to stanch bleeding and founded a company, First Care. Its
bandages are said to have saved the life of US Senator Gabrielle
Giffords, shot in the head outside a Safeway store in Tucson, Arizona,
last January 8.
What is it about IDF units that spurs hi-tech innovation? Saul Singer,
co-author of “Start-Up Nation,” told “The Jerusalem Post” that he
believes it is not specifically the hi-tech IDF units like 8-200 that
are the main startup drivers. Rather, it is the cultural effect of IDF
service. “In the IDF Israelis learn about teamwork, improvisation,
leadership skills, sacrifice for a larger goal,” he says. “These are
things you don’t learn in school or in business. It’s a kind of third
stage in life.”
Singer’s views are supported by Dan Meridor, Deputy Prime Minister and
Minister of Intelligence and Atomic Energy. Meridor is closely involved
with the Talpiot program. When he speaks to Talpiot participants, he
tells them, “when you’re under the command of 30- to 35-year-old
colonels and generals, don’t listen to them! They know how to win wars
the old way. They need somebody new who has never seen the old
challenges and the old answers.… Don’t ask for advice! Seek the answers
on your own.” Meridor told “Aviation Week” that the youngsters are
instructed to operate on the edges of anarchy, or at least
insubordination. This is the core of entrepreneurship and an aspect of
military service few other armies cultivate.
I am helping to lead a Neaman Institute project for the European Union,
identifying the drivers of innovation as the basis for pro-innovation
We have found that cultural factors, such as Israelis’ resilience and
stubborn persistence, are crucial. As Singer notes, Israel’s “IDF to
IPO” culture is unique.
Army service in Israel, it appears, not only guards the country’s
citizens in the present, but by fostering entrepreneurial skill it also
helps build its future. • The writer is senior research associate, S.
Neaman Institute, Technion.