A Culture of Entrepreneurship

The highly energetic entrepreneurial spirit is a crucial characteristic of the Israeli mindset. This is illustrated by the number of start-ups that are being created every year in the country, and is a quality one can find in a large number of Israeli people, many of whom forged vital contacts while serving in Israel's army.

Another source of this entrepreneurial spirit might be the vital need to manage in a country with very few raw materials, which necessitated creating intellectual value to survive against worldwide competition. The country does not have a choice: a lack of raw materials and a limited domestic market are factors pushing companies to export sophisticated products.

This entrepreneurship might also be due to the constant political turmoil that has characterized Israel all through its history. In particular, many Israelis have the capacity to react very fast and to adapt their lifestyle according to the evolution of their environment. If we take the example of tourism, which at the beginning of 2001 almost disappeared owing to the political tension between Israelis and Palestinians, it is amazing to see how people who depended upon this sector managed to change their professional and business orientation. Many of these people are now adopting a proactive attitude and are creating new businesses and opportunities.

It is also amazing to see how active youngsters are in regard to start-up creation. Mirabilis ICQ for example, which was created by Vardi (age 28), Visiger (age 26), and Goldfinger (age 27), has become an inspiring model that has been followed by many other young Israelis.

Case Study: Mirabilis

Four young Israelis founded Mirabilis in Tel Aviv, with the aim of developing new ways of communicating on the Internet. They designed an instant mail software, ICQ (read: I seek you), which enabled users to know instantly if the people they communicated with most were on line.

The founders all had a passion for computers and the Internet. Their conclusion was simple: the Internet was fascinating for an increasing number of people but, in most cases, users surfed without communicating with each other. What was missing was a way of directly linking users. The founders of Mirabilis thus decided to create a new communication technology capable of simultaneously interconnecting millions of users through the same network.

Mirabilis did not generate any revenue as freeware (except through sales of ASPs to enterprises ). However, soon after its launch, millions of copies of the software had been downloaded, of which 60% went into regular use. This community of millions of subscribers constituted an extraordinary capital (to be used later for electronic advertising). This success did not escape the attention of AOL, which bought Mirabilis for $287 million in 1998.

Mirabilis is one example of how the Israeli economy has lived through a fantastic revolution. In the 1960s, 70% of Israeli exports were oranges and agricultural goods. Today, high-tech products make up two- thirds of the exports and agricultural produce comprise less than 3%.

It can be said that the greatest export from Israel during the last few years is neither diamonds nor oranges but entire companies, usually to the United States. ^[6]