Israel’s High-Tech Boot Camp: the Army

The call to Lior Ma’ayam came, as it does to the best and brightest of Israel’s youth, while he was still in 10th grade.

A star student in one of Tel Aviv’s elite high schools, he was instructed to report to a nondescript downtown office building. There he underwent a battery of tests aimed at measuring not only his brainpower, but such less-quantifiable characteristics as latent leadership ability.

A few months later, the exacting sequence ended for Ma’ayam with an invitation to join what may be Israel’s most exclusive club: the Israeli army’s Talpiyot program.

Talpiyot is not a country club, but a rigorous training course aimed at turning out a corps of master technologists for the military--and more.

“Our idea was to build the next generation of the country’s leaders,” says Yair Shamir, a high-tech businessman here who, as chief of electronics for the army, helped found Talpiyot.

Rather than enlisting for the standard army term of three years, the fewer than 25 youths selected for Talpiyot each year serve for nine. Rather than map out their own academic career, theirs is chosen for them from among the physics and higher mathematics offerings at the Hebrew University in Jerusalem. There they are sequestered from most of the other students--not physically, for they share many classes, but by unspoken social tokens: They are younger than most other college students, who have already completed their army service, and unlike anyone else on campus, they attend in uniform.

Nevertheless, almost no one ever turns the invitation down. Talpiyot--the nearly untranslatable Hebrew word of biblical origin suggests a structure built to be imposing and impregnable--not only represents the pinnacle of brainpower in the Israeli army, it is an open ticket into the country’s high-tech world.

The Israeli economy has transformed itself over the last few years from an economic laggard into one of the world’s most important high-tech competitors, boasting the third-highest number of Nasdaq-listed companies in the world and billions of dollars a year in new venture investments.

“After I got chosen, my friends said, ‘You’ll be in a start-up [business] after the army,’ ” recalls Ma’ayam, now 36 and a vice president and general manager at Compugen, a private company that makes tools for the analysis of genetic code.

Talpiyot is also a sign of how closely tied the Israeli army has been to this country’s high-tech boom. Far more than any other government institution or even the country’s world-class establishments of higher education, the army has been the indispensable factor in the creation of the entire industry.

This catalytic process has been so successful, in fact, that the army itself now faces difficulties competing with its own offshoots for the best young talent in the country.

As small a group as they are, Talpiyot veterans are prominent among the founders or managers of Israel’s most successful or promising high-tech ventures. Some companies brag about their array of Talpiyots the way others do the number of PhDs on their research staffs. At Compugen there are 12 Talpiyots, including one co-founder.

Across the industrialized world, of course, military demand has always been a factor in technological innovation. But in Israel, the relationship goes far beyond the conjunction of money and necessity that defines what Dwight D. Eisenhower branded the military-industrial complex.

Israel’s military has not only been a customer of advanced technologies, but a training ground for its high-tech leaders. Many honed their competitive skills in the cockpits of its jet fighters or as managers of multibillion-dollar research and procurement programs. They in turn have carried the Israeli army’s creative and independent character into the country’s high-tech sector to a degree that would be impossible anywhere else.

“The military plays a different social role here [than in other countries],” says Gideon Tolkowsky, a former fighter pilot who now heads his own venture capital firm. “It’s compulsory. This is a smaller country, and the military is more entrepreneurial--for better and worse.”

In contrast to the United States, where today’s all-volunteer army is very much an expression of socioeconomic class, the Israeli military sits squarely at the center of Israeli society. To people here, the army is more than a military organization that has repeatedly saved the country from extinction; it is invested with a large part of the national mystique, the way the French identify with their language or the Japanese with their imperial history.

Israelis have viewed service in the army as a unifying ritual ever since its founding in 1948, when it was feared that not even a common religion might do the job of synthesizing a single nation out of tribes of Jews from dozens of social and ethnic strata across Europe and Asia.

Israelis like to believe, at least superficially, that it is a “people’s army” that reflects their communal character. Its popular image is that of brashness, innovation and self-confidence. And its respect for learning is a byword: Where American families might regard the army’s interest in their children as a threat or intrusion, Israeli families are more likely to brag about their school-age children’s army dossiers.

“The Israeli army is not a real army,” says Yitzhak Molcho, a prominent lawyer and advisor to former Prime Minister Benjamin Netanyahu. “It has the traditions of an army, but also a plan where the smartest, most courageous youngsters find new challenges. The law enables the army to screen everybody, then it exposes them to new technologies at the age of 18 when their minds are at the top.”

Because most Jewish Israelis must complete their compulsory service of up to three years (one year and nine months for women) before they can enter the work force or attend college or university, it is probably the country’s single most important socializing force. It is in the military that many Israelis typically forge friendships and connections--and make reputations--that last a lifetime.

“How do you find out about someone in this country?” remarks A.I. Mlavsky, a leading venture investor in Tel Aviv. “Make one phone call to someone who can tell you what he did in the army.”

Military service leaves a durable mark on many Israelis. Entrepreneurs here spout maxims from their army experience the way American CEOs spout football analogies. (“My first day of training in the army paratroopers, the sergeant major gave the best business advice I’ve ever had. He said, ‘If you stand still on the ground, you’re dead. You have to outrun the bullets,’ ” and so on.)

Aryeh Finegold is a former paratrooper and serial entrepreneur now on his third successful software start-up. “At almost every company I’ve worked at,” he says, “people hear from me about the battle of San Simone, war of ’48. The Arabs were surrounding a small Israeli group, heavy casualties on both sides. The Israelis radioed back to their commanders, asking permission to withdraw. They finally got it on the third day. Halfway down the hill, they realized it’s too quiet. It turned out the Arabs had left first. So if you think you’re having a hard time, look at your competitors.”

The storied cohesiveness of Israeli research and development teams can often be traced to the bonds of mutual service.

“Every Israeli kid undergoes two ceremonies: his bar mitzvah and the ‘blanket,’ ” says high-tech investor Yossi Vardi. “On the first night of basic training, the commander says, ‘This barracks is filthy and you’re all going to have to stay here over the Sabbath and clean it.’ So one guy stands up, points his finger at another, and says, ‘He’s the dirty one. It’s his fault.’

“That night 25 guys put [the finger-pointer] under a blanket and beat him until he’s unconscious. That’s so he learns how dangerous it is to point your finger at another in your unit. And nobody has to put up signs in the barracks saying they believe in teamwork.”

A disproportionate number of Israel’s high-tech managers are drawn from one of several elite army units whose very names have a special resonance for the average Israeli--the intelligence corps’ fabled 8200 unit, for example, which is so secret that, even years after they have mustered out, its alumni are often loath to talk about what they did in the army.

For its part, the army takes its role as a nurturer of talent for the civilian sector seriously.

“This is the leading computer institute in Israel,” says Lt. Col. Shai Basson, director of the military’s School for Computer Science, located on an army base nestled among the high-rise office towers of Tel Aviv’s diamond district. The program, he contends, is less theoretical and more demanding than those at the country’s leading institutions of higher learning.

“Some students who are able to pass easily in university can’t adapt themselves to the demands of the army,” he says, surveying 25 olive drab-clad students developing a tank battle simulation. (The assignment aims to teach them how to compile computerized data to help commanders make tactical decisions in the field.)

“The [university] passing grade is 60; ours is 70. We teach our students to think as soldiers, not to surrender. When our students have a bug to solve, they know they will solve it, not pass it on to their professor,” Basson says.

None of this is to say that the army’s influence on high-tech is invariably positive.

Groups excluded from military service, for one thing, risk ending up on the wrong side of Israel’s widening digital divide. That includes Israeli Arabs. Exempt from the draft, they are permitted to volunteer for the army, but even then they are unlikely to win assignment to the intelligence or communications units that afford the greatest entree to the civilian high-tech economy. The same goes for ultra-Orthodox religious students, who are granted deferments into their mid-20s.

Moreover, there is a growing concern here that the soldierly attributes that have been most beneficial to Israel’s entrepreneurial start-ups become impediments when companies need to evolve into mature organizations.

“The army’s less disciplined and more aggressive,” says Tolkowsky, the venture capitalist, “but its ability to manage large structures is in question.”

Another concern is the impact of the high-tech phenomenon on the military itself. In a sense, the army has become a victim of its own success in seeding the civilian sector: It is no longer able to compete with high-tech start-ups for the best young engineers, who can earn more than $80,000 a year in civilian life. It is not unheard of for trained engineers to begin shopping their ideas to venture capitalists before they even complete their service.

“A [civilian] engineer with one year of experience gets more than I do in salary and gets a car, which is something we don’t give to anyone below the rank of lieutenant colonel,” laments an air force colonel at military headquarters.

To combat the brain drain, the army has started new programs offering signing bonuses of up to $15,000 to talented soldiers who extend their enlistments--along with the all-important rank of lieutenant colonel. Also under consideration is a plan to allow some soldiers near the end of their enlistments to work part-time in the private sector.

Still, there is a feeling in Israeli business that military service will remain the foremost element in the shaping of the Israeli entrepreneur.

“The whole Israeli army is oriented toward quick decision,” says entrepreneur Finegold, preparing to fire off another maxim from the Israeli military.

“When the U.S. is at war, you have all the time in the world. If everything’s not there, you wait. In the Israeli case, you don’t have all the time in the world, not when a tank can be driven from Damascus to Tel Aviv in a few hours. You can’t cover all the bases; you don’t have everything you need. And you have to win.”

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Coming Sunday in Business: Israel is again considering whether its relative prosperity in the region can be a tool for peace.

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To read Parts One and Two of this series, go to https://www.latimes.com/israeltech.

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Training Ground

The Israeli army, long viewed chiefly as the custodian of the country’s security, has become one of the most important wellsprings of its high-technology sector by providing thousands of young Israelis with technical education and management experience they cannot get elsewhere. Veterans of its top units often end up leading key high-tech firms. Some examples:

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Chemi Peres

* Military: Pilot

* Business position: Managing director and founder, Polaris Venture Capital.

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Aryeh Finegold

* Military: Paratrooper

* Business position: Chairman and chief executive, Orsus Systems; founder, Mercury Interactive.

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Gil Shwed

* Military: Intelligence

* Business position: Co-founder and chief executive, Check Point Software Technologies.

Source: Times research

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