Exploring “Startup Nation”

Last fall and winter, 23 MIT Sloan students participated in a new, hands-on course designed to immerse them in Israel’s dynamic business environment. Called Israel Lab, the class is the latest addition to MIT Sloan’s portfolio of action learning offerings, which include courses in different regions as well as industry-focused classes in areas like finance and health care.

Classroom sessions focused on identifying the unique factors that have earned Israel the nickname “startup nation.” Last November, students were matched with six different organizations in Israel to work on strategic challenges in areas such as big data analytics, technology, and telecommunications, with an emphasis on early-stage ventures and their growth. Then, in January, the students traveled to Israel and spent three weeks at their host companies, working alongside Israeli executives.

Five things to know about Israel Lab:

Dubbed “Startup Nation” thanks to its entrepreneurial environment, Israel offers a unique opportunity for students.

According to the World Bank, Israel spends more on civilian research and development than any other country. It has one of the most educated populationsin the world, with the highest density of engineers and scientists, and the greatest concentration of high-tech companies outside of Silicon Valley.

“Through learning by doing, Israel Lab students develop a deep understanding of one of the world’s foremost innovation ecosystems,” said MIT Dean for Graduate Education Christine Ortiz, who co-founded the lab with MIT Sloan Senior Associate Dean Jake Cohen. “This lab explored the distinctive opportunities and challenges facing entrepreneurs in Israel,” Cohen said.

The students worked with small companies, but had big impact.

Students worked with five startups—Consumer Physics, Highcon, Windward, Voyager Analytics, and VocalZoom—and one more established company, Amdocs. While Amdocs is not a startup itself, the team’s project focused on integrating promising new technologies from startups into the company. Other teams devised pricing models, conducted market research, or developed go-to-market strategies with their companies.

Emily Altman, MBA ’16, who worked with Highcon, said she was impressed with how receptive the company was to her team’s ideas. “We all felt valued right from the beginning, and we felt like we were trusted. By the end, they were coming to us with strategic questions,” she said.

Steven Zhang, MSMS ’16, who worked at Windward, said the whole experience was “revealing.”

“The dynamic everyday life at Windward is exemplary of the start-up nation and further encourages all of us to start a business ourselves at some point, following in the footsteps of [Israeli entrepreneurs],” Zhang wrote in his blog.

The teams presented to former CIA director David Petraeus and diplomat Dennis Ross.

While in Israel, the Windward team presented its work to retired U.S. Army general and former CIA director David Petraeus, who is an investor in the company.

After returning to campus, Israel Lab students had lunch with Dennis Ross, who served two years as a special assistant to President Barack Obama and was involved in the Middle East peace process under Presidents George H.W. Bush and Bill Clinton. After the students presented their work to Ross, he talked with them about their experiences in Israel and shared his insights into the region.

Ross told the students, “You are providing a real service to [the Israeli companies]. There’s kind of a niche you are filling that they haven’t quite mastered themselves.”

“The students not only get practical experience, but they get insight into how these companies form. It’s really interesting,” Ross added.

On June 8, MIT and Israel Lab will host the launch event for the 2016 Massachusetts-Israel Economic Impact Study, featuring talks by Christine Ortiz and Massachusetts Gov. Charlie Baker. Students will attend the event along with senior business executives, journalists, lawyers, politicians, and diplomats.

Diversity of student teams was critical.

Students from six of MIT Sloan’s degree programs participated in Israel Lab. Teams were designed to maximize diversity across programs and experience, and offered students the opportunity to work with fellow MIT Sloan students they may not have met otherwise.

Luis Ayllon, SF ’16, who worked on the Amdocs team, said the team’s diversity was instrumental to its success. “The members of our team were from three different programs—the Master of Finance program, the Master of Science in Management Studies program, and the MIT Sloan Fellows. We were able to collectively bring our experiences together and our report was read [at Amdocs] all the way up to the CFO,” he said.

Next year, Israel Lab will increase in size, and will be open to graduate students from MIT’s Schools of Science and Engineering.

In addition to their project work, students were immersed in Israeli culture.

Many group events were organized for students, including a visit to Yad Vashem, Israel’s Holocaust memorial; a trip to the Technion, the technology institute often referred to as the MIT of Israel; an MIT Sloan alumni event; and the OurCrowd Global Investor Summit. Most students also took excursions to the Dead Sea, Jerusalem, and Jordan, and some went in search of the best shakshuka, falafel, and hummus, favorite Israeli dishes.

“By experiencing Israel firsthand through engagement with the host companies, and by gaining an appreciation for the social and cultural fabric, students were able to identify the key ingredients in the country’s success,” said Cohen.

Israel Lab is offered in collaboration with the MIT-Israel program.