Michael Eisenberg@mikeeisenberg
Day 18 - Seventh Set of Thoughts on unfolding Events in Israel and now around the world. Coherence and Collective Responsibility Under Stress. What is going on in Israeli tech? And what you can do to help!
I have had a post on Israel’s high tech system in draft mode for almost a week. With the ground war not yet underway, this feels like an opportune time to tell you what is going on.
I got home last night close to 11pm after a meeting at the Finance Ministry with some of Israel’s leading investors, best minds and the wonderful policy people at the Finance Ministry. The topic: Israeli High Tech resilience. Everyone is sober that some start up companies will not make it. This is a triple whammy of a tech downturn, then the Judicial Reform and then a war in response to the Hamas terrorist atrocities. And still the optimism in the room about the future of Israeli innovation was palpable. In fact, many companies are still growing very rapidly and tightening operations to get to profitability faster. Some, of course, are struggling due specifically to the war. Therefore, we will see some short term government programs coming to help extend runway. And, and I am cautiously hopeful that we will now cook up some long term game-changing policies and investments. The Judicial reform is, of course, dead even if the current government has not had the balls to say it.
As I have said previously, some companies have a lot of employees in reserve duty, hampering their ability to continue. At others, it is business as usual. Most companies are in the middle, some people have been called up to reserves, others are babysitting kids so productivity is down but they are adapting and pushing forward. Many will succeed due to the adversity which builds more resilience and fortitude. Startups are hard and are marathons. The most resilient win.
More than anything though, the innovation coming from the high tech sector to support the war effort, identify and release the hostages and build 21st century digital civic infrastructure is going to generate incredible investment opportunities and innovation in the coming years. The fortitude, focus, resilience and adaptability shown by Israeli high tech companies during this time is exactly the stuff that startup legends are made of. The next generation of Israeli companies are going to be remarkable. Also, I do think that we will get to a level of normalcy in tech within a few weeks, with many reservists returning to work, especially in tech.
But there are also some hard stories. One really sobering story is a company that had a term sheet on a big growth round of funding. The CTO of the company was killed by the Hamas barbarians. The CEO was immediately drafted into reserve duty after October 7th. This is an unbearable human tragedy and a very difficult business challenge. But….They have some capital in the bank and they are trying to figure out how to make it through this. What I can tell you is that whichever growth fund invests in this company will be handsomely rewarded. This team will not stop until this company is a $10Bn monument to the failed attempt of terrorists to kill Jews and destroy the Jewish State. Remember, the most resilient win.
This speaks to something that is endemic to Israel’s start up ecosystem. For decades I have said that Israeli R&D is incredible because the metrics for our army-trained engineers are life and death, not clicks or conversion rates. When the metrics are life and death, collaborative and multi-disciplinary innovation is the key. Multi-disciplinary-ism highlights the collective over the individual. In fact, in a Western World consumed by individualism and individual expression, the current war on Hamas shows the power of collective effort. The power of individuals to come together in teams and common cause and solve problems. That is Israel right now. It is palpable. People are fired up to build and create!
Social cohesion is the elemental power of peace and prosperity. Social cohesion under stress is how legends, legendary innovation and companies are made. When the best brains mix with civic entrepreneurial spirit, a crisis that demands solutioneering and a common goal and aspiration, watch out. These collaborations are building new technologies and a new Israel right before our eyes. Israel 2.0 is being birthed today by civic society and startup nation.
The collective responsibility that has been demonstrated by Israeli high tech, civilians across this country and our children and family members that turned up for reserve duty from the four corners of Israel and four corners of the world has much more staying power. It has a will to life that will not wilt nor be broken. It can innovate in a way and pace that most people cannot, especially under stress. The individual and individualist wilts under stress. The collaborative and coherent collective becomes resilient.
Snowflakes are not just unique. Snow flakes blow in the wind and melt. That is why young people in western societies are being runover by self-destructive ideologies. They have no backbone nor tribe. No coherent worldwide nor tribe. They gravitate to whatever makes them stand out individually on Tik Tok. In Israel, mandatory military and national service ensures there are no snowflakes. A greater cause builds long term resilience.
Speaking of TikTok, this is a clarion call to the tech world. TikTok is a weapon and it has been weaponized by terrorists. It is poisoning your kids minds. It must be taken down. It can be taken down by legislation, by algorithm manipulation of any means but it is destroying young western minds. It has radicalized identity politics over social cohesion and intellectual coherence. How else could you get “queers for Hamas” who aside from killing jews, hang gay people. How else can you explain that most 18-24 year olds sympathize with rapists and baby murderers? It is because they get their news from TikTok, a weapon in the information war against civil people. If the war with Hamas has taught us anything, it is that if we do not pre-empt when people weaponize with both arms and media, then we pay a much bigger price down the road. Tik Tok, Al Jazeera, Universities and Telegram have been weaponized just like fuel and and water pipes in Gaza.
Which brings me back to tech. The tech community has rallied around Israelis. It has rallied around moral clarity. From Big tech (Google. Amazon, Microsoft and Apple) to Venture Capitalists, investors and others. We are eternally grateful to you and think your moral stand will stand you, your companies and free society globally in good stead. I am sending you a hug, a thank you and a commitment to do everything in our power to make you a lot of money and make you proud of the innovation in Israel that you invest in. Tech can and should be mobilized for good. It can be mobilized to rebuild Gaza (more on that in next post). Tech has mobilized for good in this war. God Bless our tech and investor community.
This is also a call for action. We are in Q4 now. Budgeting for 2024 starts today. If you are a CEO of a fortune 10,000 company, if you are a private equity shop that owns companies with budgets, if you are in tech, PLEASE BUY ISRAELI IN 2024. PLEASE BUY ISRAELI TECH. Buying Israeli is an investment in good, it is an affirmation of life and resilience. Buying Israeli says that you stand against anti-semitism, which has reared its ugly head across the West. This is the time to put our money where are values are. The values of democracy and freedom. The values of women’s rights. The values of civic and collective responsibility. When you finalize your 2024 budgets, please sign them: “We are our brothers keepers and partners.”
