Techpreneurship, with Jeff Amerine

Jeff Amerine

(Jeff Amerine is an IA advisor and officer with the University of Arkansas Technology Licensing Office. Each Thursday, his Techpreneurship blog will appear in INOV8. Drop him a line in comments.)

I’m not sure who originally said “if necessity is the mother of invention, then adversity must surely be the father of entrepreneurship.”

I’d like to take credit for the second half of that sentence…..but as I seldom have original thoughts. I suspect I heard someone much wiser say it in the past.

The statement is almost poetic, but is it true?  Can we point to instances that make the case for adversity and chaos driving entrepreneurship?  Dan Senor and Saul Singer certainly believe it.  In their recent book, “Start-up Nation – The Story of Israel’s Economic Miracle,” they provide compelling evidence to support the case.

You may recognize Dan Senor’s name.  He was a U.S. State Department official assigned to Iraq, and he currently serves on the Council on Foreign Relations.

The authors’ fundamental arguments suggest constant adversity since Israel’s founding in 1948, compulsory military service for all, in a decentralized organizational structure, and chutzpah (yiddish word that means guts or gall) have driven the meteoric rise of Israel’s Techpreneurs.

Think about it.  This is a barely 60-year-old nation, surrounded by enemies, with only 7 million people….and yet as Dan Senor points out, Israel has more high-tech companies listed on NASDAQ than those from all of Europe, Korea, Japan, Singapore, and India combined!

The fact that blue-chip players like Sequoia Capital and Warren Buffett have made major investments in Israel provides another very clear signal that somehow Israel has captured “the right stuff” through the adversity they live with every day.

Dan Senor tells the story of Hezbollah rockets raining down very near the Iscar R&D facilities and factory in the 2006 Lebanon War.  Iscar was the first non-U.S. company Buffett bought for a mere $4.5 billion — no small bet.

Buffett, a value investor, seldom places ill-advised or risky bets.  So why did he buy Iscar?  Buffett didn’t view the possibility of the plant being hit by Hezbollah rockets as a catastrophic risk…he was investing in the people of Iscar. A new plant could be built.

What gave Buffett that confidence? During the 2006 Lebanon War, even as the Hezbollah rockets landed very near the Iscar plant, Iscar never waivered, never had a production slip, and never missed a customer commitment. Even as Israel’s government recommended evacuation from many areas, Iscar CEO Eitan Wertheimer assured Buffett, “For our customers around the world, there was no war.”

That is resolve and tenacity!

So how can Arkansas Techpreneurs learn from and benchmark Israel’s success?  I think we have many similar ingredients.  Arkansans are continually underestimated.  Any success we have had in building great world-class companies, we did ourselves without much help from the brain trusts on either coast.  And to top it all off, we compete in the SEC – the toughest neigborhood around….

We know adversity.  We have truckloads of chutzpah.  Let’s get it done…

To learn more about Israel’s Techpreneurship miracle, think about getting a copy of Dan Senor’s book.  Here’s a link so you can learn a bit more:  http://www.startupnationbook.com/

As always, fire away and let me know what you think.

5 Responses to “Techpreneurship: Adversity Builds a ‘Start-up Nation’”

1. uberVU - social comments says:

   January 15, 2010 at 3:51 am

   Social comments and analytics for this post…

   This post was mentioned on Twitter by Jamerine: Adversity can drive a “Startup Nation”. http://blog.innovatearkansas.org/2010/01/14/techpreneurship-adversity-builds-a-start-up-nation/…
2. Tweets that mention Techpreneurship: Adversity Builds a “Start-up Nation” | Innovate Arkansas -- Topsy.com says:

   January 15, 2010 at 12:58 am

   [...] This post was mentioned on Twitter by Innovate Arkansas, Jeff Amerine, Randy McClure, amcadoo, Mark Carter and others. Mark Carter said: Techpreneurship: Adversity Builds a ‘Start-up Nation’ http://bit.ly/6p5aNs [...]
3. Jeff Amerine says:

   January 14, 2010 at 5:07 pm

   John

   Thanks very much for the thoughtful contribution to the discussion. Your key point about needing solid strategy, determination, leadership and a bit of luck to drive the pieces together in a meaningful way is spot on.

   I look forward to hearing from you in the future. Let’s figure out how to take some tangible steps to drive the kind of success Israel has seen right here in Arkansas.

   Jeff
4. mcarter says:

   January 14, 2010 at 5:02 pm

   Awesome post, John. I think you nailed it on all counts.

   (And when we win the BCS national championship next year, Fayetteville/NWA will no longer be the well-kept secret that it remains, to a degree, today…)
5. John says:

   January 14, 2010 at 4:35 pm

   I’m a central Ark guy, so I only venture to NWA when visiting friends. It has always an in and out type thing, and I’ve never really bothered to comb the area. When I finally explored the nooks in those hills, I came away with an even more positive impression of Fayetteville than I already had.

   I think Fayetteville, with the right implementation, has the ingredients to become a major hub for young professionals and startups– a la Austin, Portland, or Denver. I saw…

   -Intellectual vitality: a big research university that’s on the rise; a place where smart young people/professionals want to be. The library is amazing–the fact that that much would be spent on a public library says a lot.

   -Smart city dynamics: well planned city, innovative architecture, walkable downtown area. Fayetteville has a distinct architectural style–I’m guessing the same couple of firms design most of the buildings–and it is inventive, colorful (without being tacky), and makes great use of space. It was almost like a Colorado ski town in its style. I’ve had the displeasure of staying in another college town in the state–let’s just say it rhymes with Konway–and I was not so impressed: sprawly, unplanned, anywheresville, USA. Fayetteville has a distinct character.

   -Financial backbone: Wal-mart/vendors sphere, Tyson, JB Hunt are just down the road. There are both direct and indirect benefits of being in these co.’s economic spheres; they bring professionals from out of state, and they funnel in revenue to the region.

   -Intangibles – natural beauty: this is one those rare qualities of geographic circumstances that can give a city an edge as far as attraction. If you think about the “it” places where young professionals want to be (e.g., Portland, Denver, the Bay Area), they tend to be geographically arresting places. At the most sensual (physical) level, geographically interesting places provide opportunity to participate in the outdoors in variety of ways–which is an attractive trait for the active bodies of young professionals. Premium hiking, mountain biking, rock climbing, and kayaking opportunities abound within an hour or 2 of Fayetteville. This is pretty rare for any city–it’s especially rare for a city located in middle America. In fact, I’d say this particular area in the Arkansas is pretty much the only place in Middle America where you could find these outdoor opportunities.

   Combine all these excellent traits–the rare geographic circumstances, the rare economic circumstances (i.e. the #1 company in the world is up the street and its mere gravity pulls in other industries), the foresight of the development of Fayetteville, the intellectual roots provided by a major University–and you have a very ripe place for startups/innovation.

   But as with a person’s inherent ability, these “fundamental ingredients” don’t really mean anything if they are not strategically steered in the right direction. What differentiates a guy as smart as Bill Gates from THE Bill Gates is largely drive. When I say drive, I mean a person’s self-initiative, awareness, and tenacity to achieve goals. (Sure, there’s perhaps a modicum of luck involved; I’m exaggerating a bit to explain a point.) On a personal level, intelligence is merely a prerequisite for successful entrepreneurship; drive is what gets it done.

   I think it works the same way for cities. Fayetteville has the right ingredients; the rest of the game is about assembling and arranging the pieces in a way that promotes innovation.