Chutzpah: Why You Need an “Unstoppable” Mindset

Israel has a vibrant startup scene that’s having a global impact. What’s behind that?

You’re absolutely right. Israel is actually the second-largest hub of tech after Silicon Valley worldwide, and we have the highest density of startups per capita in the world and the highest venture capital per capita. Israel is the number-three country on Nasdaq in terms of companies after the U.S. and China, which are much larger than us. We are only nine million people. It’s a very vibrant ecosystem.

One of the main things that works really well is the ecosystem in Israel, combining the entrepreneurship culture with multi-stage funding, the large presence of multinationals, and very active academia. The government is supporting the startup scene in terms of capital. But a lot of people ask, “What’s the secret sauce?” The ecosystem is one answer, but it’s not a complete answer, because there are other ecosystems around the world. My observation is that it’s about the culture. This is what the book is about.

What I found very unique to the Israeli culture is what we call chutzpah—audacity, a go-to approach, a can-do approach. When you talk about chutzpah, probably the most important thing is the mindset. The mindset is the fact that you’re not afraid or intimidated by challenging reality or challenging the status quo, saying I can actually build something that will work better than the existing solution. This kind of mindset is very important.

Any good entrepreneur around the world has this. The difference is we have it as a part of our culture. We grow up with it together with the mission-completion approach that we get from the army. That makes it a very strong cultural mindset that puts a very strong drive and focus behind the entrepreneurs.

One would expect the army to be a follow-the-orders kind of thing. In the IDF [Israeli Defense Forces], that’s not what you’re being trained for. What you are being trained for is one simple thing, and this is to complete the mission. In order to complete the mission, you can improvise, you can make new decisions you want [to make] as long as you complete the mission. If you have this mindset and bring that to a startup company, that’s very powerful.

We see a lot of news on Israeli startups in areas such as cyber security. Why is that, and what are other areas of expertise?

In the army, there are a few very, very advanced technological units; probably the most famous one is called 8200, which has some amazing talent. They are doing some of the most advanced cyber security in the world, whether it’s offensive or defensive technologies. When these young people get out of the army, they have experience that not a lot of people have around the world. That’s a great incubator for talent—we have thousands of people that are being trained in the most advanced manner. It’s a real thing. It’s hands on in. It’s not theoretical.

Digital health and biotech are also very advanced in Israel. The academia are doing a lot of work on that. You mentioned fintech, [which] also somewhat overlaps with cyber security—when you do anti money laundering, for example. The borders between the verticals sometimes blur.

What trends are you seeing in fintech/insurtech today?

There are all sorts of insurtech companies that are emerging. Companies like Lemonade are very successful because they came out with the new approach of giving you a quote after two minutes, paying your claim after three seconds. They are changing the pace and the level of service, and behind that there is a lot of technology, AI, etc.

The more strategic changes are actually ahead of us. There could be almost a paradigm shift in this market. One of the things that technology enables is personalization. The fact that you can actually collect the data—and I will give you the access to the data because I want a better price—to the way I drive, to how I live, the way I exercise, how I eat, the parameters of my health, how many steps I do a day. It’s on the thin line between privacy matters, but if I have the incentive to give you this data, then that can serve the insured and the insurers in terms of giving me personalized insurance.

The other trend that is happening is prediction. Based on AI, if I have the data of how you exercise or how you eat all the way to what genes you have…that can maybe help me as an insurance company to have some kind of prediction that will assist me in giving you better insurance.

The other trend that is already happening in other markets, but probably just beginning in insurance, is insurance on demand or insurance as a service. Let’s take autonomous cars for example. In a few years, you’ll have autonomous cars. I won’t necessarily own a car. I can order a car, and it’ll come pick me up. Now, who’s paying the insurance on the car? If it’s me, I want to pay the insurance only when I’m in the car. This kind of insurance as a service or insurance on demand is something that will emerge as change happens in other areas, such as healthcare, that will have direct influence on the insurance companies.

The personalization, the prediction, the insurance as a service, etc., that will have a direct effect on the pricing. At the end of the day, it will be fully differentiated between one person and another, between one apartment and another. All these kinds of technologies that create data will enable the insurance companies to come up with a much more accurate and personalized kind of insurance that will be a completely different game than we know today.

Why is chutzpah essential for an entrepreneur?

When you look at the statistics on the number of startups that don’t make it, the odds are against you on day one. About 75% of startups don’t make it. In kind of a humble way, I have tried to contribute my part to decrease this percentage and help more startups succeed.

When I look to some of the Israeli companies that succeeded—whether it’s Waze or CyberArk or other companies that I mention in the book—the common denominator of these entrepreneurs was this mindset of unstoppable-ness. A startup is such a roller coaster, and there are always hurdles and always challenges. You need to have this “unstoppable” mindset in order to overcome these challenges. You have to have the passion for what you do. I don’t believe in a startup where the entrepreneurs are interested in the exit. They probably wouldn’t survive the journey. If you have the passion and you truly believe in what you’re doing and you truly either want to create a new category or bring a new message to the world, then this passion of yours is such a strong drive that it will enable you to overcome all of these hurdles and challenges.

When you look at startups that don’t make it, probably the number-one reason is that they didn’t listen well enough to what the market was telling them. You might have very smart people around the table, whether it’s the management or the board or the investors, but nobody is as smart as the market itself. You need to listen to what the market is telling you and be prepared to make the changes and tweaks on the product level, on the channel level, on the pricing level, on the marketing level. If you look at successful companies, they were very good at listening to what the market was telling them.