Start-Up Nation Summary

1-Sentence-Summary: Start-Up Nation explains how a tiny, controversial, politically isolated country like Israel manages to be one of the world’s creative hubs with more startups, venture capital and new technology than entire continents.

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Start-Up Nation Summary

Can you get an entire country to become entrepreneurs? Well, almost. Israel flies completely under the radar in most people’s entrepreneurial view. But it’s actually one of the most productive countries in the world.

Start-Up Nation describes how Israel’s history and economic situation have led to this small country becoming one of the world’s leaders in entrepreneurship.

Imagine what it’s like to have your number one export be innovation. If Israel can, so can others. Let’s take a look at what it takes.

Here are 3 lessons about Israel’s thriving startup culture:

  1. Israel has the highest concentration of startups in the world.
  2. Doubt, assertiveness and informality are the character traits of innovators.
  3. Even if your location is a disadvantage, you can turn it into an economic advantage.

Want to know how to make a country productive? Let’s learn how from the Israeli startup culture!

Lesson 1: Nobody has more startups per capita than Israel.

Israel is in constant conflict with Palestine. In fact, this endless, religious war is what the country is most known for. And if it’s not in the news for that, it’s for something about its nuclear weapons.

But underneath the surface, Israel is probably the most innovative nation in the world.

No other country spends a bigger percentage of the money in its economy on research and development. At just 65 years old and with a population of only 8.5 million, Israel has more startups per capita than any other country: roughly one for every 2,000 Israelis (that’s over 4,000 startups in total).

Major companies love to buy Israeli startups, Cisco alone has bought nine of them so far. The country is also a major destination for venture capital, receiving twice as many investment dollars per person as even the United States – and 30 times as much as Europe or China. Lastly, over 60 Israeli companies are listed in the NASDAQ, which is more than all European companies combined.

How the hell is such a tiny country so creative and productive? For one, it lies in the nation’s culture.

Lesson 2: To be innovative, you have to doubt things, assert yourself and informally discuss your ideas.

When PayPal bought an Israeli company in 2008 to better deal with fraud among its payments, the Israelis openly criticized PayPal’s current practices during their first meeting with the CEO. This assertiveness, this strong confidence in standing up for your ideas, is called chutzpah in Hebrew, and it’s a typical value instilled in Israeli children.

A second factor that makes Israelis innovative is that asking questions comes second-nature to them. Most of them are religious, and throughout history, rabbis have constantly reinterpreted the meaning of the Bible – openly and in discussions. This culture of arguing and debating over what’s right has spilled over, which makes many Israelis great entrepreneurs.

Lastly, they despise hierarchical structures and formalities. For example, the Israeli army employs very few officers in senior ranks on purpose, to make sure the soldiers on lower levels take initiative and responsibility for their work.

If you want to be innovative yourself, try working on some of these traits!

Lesson 3: Your location might suck politically, but you can use that to your advantage.

Israel is a country rigged with political problems throughout all of history. Until recently, Israelis couldn’t even travel to neighboring countries. But this limitation was exactly the right one, forcing Israeli companies to think international and pursue ventures in technology, software and communication – the things that transcend all borders.

Because Arab countries boycotted Israeli exports, they also couldn’t export any expensive goods, so they focused on smaller parts and digital goods like software. You could say Israel was forced to become a knowledge economy long before it became a global trend.

That’s also why they turned inward in terms of military technology. Their alliances with other countries were severed because of all the political issues, so they spent a lot of money developing their own military technology – which in turn seeped through to the public (as it always does).

So even if your location might suck or you face political limits, if you play it right, this can be turned into an advantage!

My personal take-aways

A refreshing book shines a much-needed light on a seriously underrated country and economy. This is very insightful! If you’re interested in entrepreneurship, give this a go 🙂

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What else can you learn from the blinks?

  • How the Israeli military is a crucial part of society and breeds entrepreneurs
  • The two significant leaps in Israeli history and what part something called kibbutzim played in it
  • Why both immigration and emigration are useful for Israel
  • What could threaten Israel’s innovation culture in the future

Who would I recommend the Start-Up Nation summary to?

The 17 year old Israeli, who wants to know more about his country’s economy, the 55 year old venture capital investor, who wants to find new investing opportunities, and anyone who’s interested in political issues.

  • Singapore is trying to be the next start up capital after silicon valley too. Very similar to Israel, small geography, surrounded by Muslim countries. Many aspects of our military was modelled after the Israeli military. I’ve seen more successful Israeli startups though…. wonder what other people think about Israel vs Singapore (best answer I could get out of the SG govt is “we’re different”…. right….)

  • SG probably has a lot more capital power, and could focus on software over tech/biotech, for example to stand out!