Start-up Nation (25 page)

Wood worked as vice president of feature animation development and production at Turner, Warner Brothers, and Universal. When
Margalit asked him to relocate to Jerusalem to create an animated feature, Wood said he would first have to see if Jerusalem
had a real creative community. After spending some time in Jerusalem at Bezalel—Israel’s leading academy of art and design—he
was convinced. “I met with the faculty there. I met with some TV writers and [author] Meir Shalev, and some other big storytellers,”
he told us. “They were as good if not better than the people you would meet at the world’s top arts schools.”

But he also identified something different about Israel. “There’s a multitask mentality here. We’ve consulted with a lot of
the Israeli technical people and they come up with innovative ways to improve our pipeline and do things more directly. And
then there was this time I was working on a creative project with an art graduate from Bezalel. He looked the part—long hair,
an earring, in shorts and flip-flops. Suddenly a technological problem erupted. I was ready to call the techies in to fix
it. But the Bezalel student dropped his graphic work and began solving the problem like he was a trained engineer. I asked
him where he learned to do this. It turns out he was also a fighter pilot in the air force.
This art student? A fighter pilot?
It’s like all these worlds come colliding here—or collaborating—depending how you look at it.”
¹

It’s not surprising that multitasking, like many other advantages Israeli technologists seem to have, is fostered by the
IDF
. Fighter pilot Yuval Dotan told us that there is a distinct bias against specialization in the Israeli military. “If most
air forces are designed like a Formula One race car, the Israeli Air Force is a beat-up jeep with a lot of tools in it. On
a closed track, the Formula One’s going to win,” Dotan said. But, he noted, in the
IAF
, “you’re going off-road from day one. . . . The race car is just not going to work in our environment.”
²

The difference between the Formula One and the jeep strategies is not just about numbers; each produces divergent tactics
and modes of thinking. This can be seen in the different “strike packages” that each air force constructs for its missions.
For most Western air forces, a strike package is built from a series of waves of aircraft whose end goal is to deliver bombs
on targets.

The United States typically uses four waves of specialized aircraft to accomplish a specific component of the mission: for
example, a combat air patrol, designed to clear a corridor of enemy aircraft; a second wave that knocks out any enemy antiaircraft
systems that are firing missiles; a third wave of electronic warfare aircraft, tankers for refueling, and radar aircraft to
provide a complete battle picture; and, finally, the strikers themselves—planes with bombs. These are guarded by close air-support
fighters “to make sure nothing happens,” Dotan explained.

“It’s overwhelming and it’s very well coordinated,” Dotan said of the U.S. system. “It’s very challenging logistically. You’ve
got to meet the tanker at the right place. You’ve got to rendezvous with the electronic warfare—if one guy’s off by a few
seconds, it all falls apart. The
IAF
could not pull off a system like this even if it had the resources; it would just be a big mess. We’re not disciplined enough.”

In the Israeli system, almost every aircraft is a jack-of-all-trades. “You don’t go into combat without air-to-air missiles,
no matter what the mission is,” said Dotan. “You could be going to hit a target in southern Lebanon, with zero chance of meeting
another aircraft, and if you do, the home base is two minutes’ flying time away and someone else can come and help you. Still,
there’s no such thing as going into hostile territory without air-to-air missiles.”

Similarly, nearly every aircraft in the
IAF
has its own onboard electronic warfare system. Unlike the U.S. Air Force, the
IAF
does not send up a special formation to defeat enemy radars. “You do it yourself,” Dotan noted. “It’s not as effective, but
it’s a hell of a lot more flexible.” Finally, in a typical Israeli strike package, about 90 percent of the aircraft are carrying
bombs and are assigned targets. In a U.S. strike package, only the strikers in the final wave are carrying bombs.

In the Israeli system, each pilot learns not only his own target but also other targets in separate formations. “If an aircraft
gets hit, for example, and two aircraft split off to go after a downed pilot or to engage in air-to-air combat . . . the other
pilots have to take over those targets,” Dotan explained. “You’re expected to do that—it’s actually a normal outcome. About
half the time you’re hitting somebody else’s target.”

The differences in the two countries’ systems are most obvious when Israelis and Americans fly together in joint exercises.
Dotan was surprised to find, in one such exercise, that American pilots were given a “dance card” that diagrammed the maneuvers
the pilot was supposed to use in the fight. “We see that and say,
What the hell is that?
How many times do you know what the other guy is going to do?” For Dotan, who now is an investor, the American system seems
“like going into a trading day saying, ‘Whatever the market does, I’m buying.’ ”

The multitasking mentality produces an environment in which job titles—and the compartmentalization that goes along with them—don’t
mean much. This is something that Doug Wood noticed in making the transition from Hollywood to Jerusalem: “This is great because
conventional Hollywood studios say you need a ‘projection major’ and you need a ‘production coordinator’ or you need a ‘layout
head.’ But in Israel the titles are kind of arbitrary, really, because they are interchangeable in some ways and people do
work on more than one thing.

“For example,” he told us, “we have a guy who is in the CG team, the computer-generated-image team, but he also works on clay
3-D models of the characters. And then we’re doing a sequence, and he came up with a funny line for the end of this thirty-second
sequence that we’re producing. And I actually liked the line so much I rewrote the script and put it in there. So the CG guy
crossed the disciplinary walls and ventured into modeling and into scriptwriting.”

The term in the United States for this kind of crossover is a
mashup.
And the term itself has been rapidly morphing and acquiring new meanings. Originally referring to the merging of two or more
songs into one, it has also come to designate digital and video combinations, as well as a Web application that meshes data
from other sites—such as HousingMaps.com, which graphically displays craigslist rentals postings on Google Maps. An even more
powerful mashup, in our view, is when innovation is born from the combination of radically different technologies and disciplines.

The companies where mashups are most common in Israel are in the medical-device and biotech sectors, where you find wind tunnel
engineers and doctors collaborating on a credit card–sized device that may make injections obsolete. Or you find a company
(home to beta cells, fiber optics, and algae from Yellowstone National Park) that has created an implantable artificial pancreas
to treat diabetes. And then there’s a start-up that’s built around a pill that can transmit images from inside your intestines
using optics technology taken from a missile’s nose cone.

Gavriel Iddan used to be a rocket scientist for Rafael, a company that is one of the principal weapons developers for the
IDF
. He specialized in the sophisticated electro-optical devices that allow missiles to “see” their target. Rockets might not
be the first place one would look for medical technology, but Iddan had a novel idea: he would adapt the newest miniaturization
technology used in missiles to develop a camera within a pill that could transmit pictures from inside the human body.

Many people told him it would be impossible to cram a camera, a transmitter, and light and energy sources into a pill that
anyone could swallow. Iddan persisted, at one point going to the supermarket to buy chickens so he could test whether the
prototype pill could transmit through animal tissues. He started a business around these pill cameras, or PillCams, and named
his company Given Imaging.

In 2001, Given Imaging became the first company in the world to go public on Wall Street after the 9/11 attacks. By 2004,
six years after its founding, Given Imaging had sold 100,000 PillCams. In early 2007, the company hit the 500,000 PillCams
mark, and by the end of 2007 it had sold almost 700,000.

Today, the latest generation of PillCams painlessly transmit eighteen photographs per second, for hours, from deep within
the intestines of a patient. The video produced can be viewed by a doctor in real time, in the same room or across the globe.
The market remains large and has attracted major competitors; the camera giant Olympus now makes its own camera in a pill.
That other companies would get into the act is not surprising, since ailments of the gastrointestinal tract are responsible
for more than thirty million visits to doctors’ offices in the United States alone.

The story of Given Imaging is not just one of technology transfer from the military to the civilian sectors, or of an entrepreneur
emerging from a major defense technology company. It is an example of a technology mashup, of someone combining not only the
disparate fields of missiles and medicine but integrating a staggering array of technologies—from optics, to electronics,
to batteries, to wireless data transmission, to software, in order to help doctors analyze what they are seeing. These types
of mashups are the holy grail of technological innovation. In fact, a recent study by Tel Aviv University revealed that patents
originating from Israel are distinguished globally for citing the highest number and most diverse set of precedent patents.
³

One such mashup, a company that has bridged the divide between the military and medicine, is Compugen, whose three founders—president
Eli Mintz, chief technology officer Simchon Faigler, and software chief Amir Natan—met in the IDF’s elite Talpiot program.
Another Talpiot alumnus at Compugen, Lior Ma’ayan, said that twenty-five of the sixty mathematicians in the company joined
through their network of army contacts.

In the
IDF
, Mintz created algorithms for sifting through reams of intelligence data to find the nuggets that have been so critical to
Israel’s successes in hunting terrorist networks. When his wife, a geneticist, described the problems they had in sifting
through enormous collections of genetic data, Mintz thought he might have a better way to do it.

Mintz and his partners were about to revolutionize the process of genetic sequencing. Merck bought Compugen’s first sequencer
in 1994, a year after the start-up was founded and long before the human genome had been successfully mapped. But this was
just the beginning. In 2005, Compugen transformed its business model and moved into the drug discovery and development arena,
and did so using techniques different from those that dominate the pharmaceutical industry.

Combining mathematics, biology, computer science, and organic chemistry, Compugen has been pioneering what it calls “predictive”
drug development. Rather than testing thousands of compounds, hoping to hit upon something that “works,” Compugen’s strategy
is to begin at the genetic level and develop drugs based on how genes express themselves through the production of proteins.

A major aspect of Compugen’s approach is its unusual combination of “dry” (theoretical) and “wet” (biological) labs. “Imagine
working with Big Pharma overseas or in another part of the country,” Alon Amit, Compugen’s VP for technology, explained. “The
back and forth that you can expect is a lot slower than if you have the biologists and mathematicians literally on the same
floor discussing what to test, how to test, and inform the models.”
⁴

Though Israel’s largest company, Teva, is in pharmaceuticals, as are Compugen and a number of new Israeli companies, the more
crowded field for Israeli start-ups is that of medical devices, many of them related to drug delivery. This field seems to
nicely fit the Israeli penchant for multidisciplinary thinking, as well as Israelis’ characteristic lack of patience—since
drugs take so long to develop.

One such mashup-based company is Aespironics, which has developed an inhaler the size and shape of a credit card that includes
a breath-powered wind turbine. The problem with many inhalers is that they are tricky and expensive to manufacture. A way
must be found to release the drug effectively through a wire mesh. In addition, this process must be timed perfectly with
the breath of the patient to maximize and regulate the drug’s absorption in the lungs.

Aespironics seems to have solved all these problems at once. Inside the “credit card” is a fanlike propeller that is powered
by the flow of air when the patient inhales from the edge of the card. As the propeller turns, it brushes against a mesh with
the drug on it, thereby knocking the drug off the mesh and into the air flow in a measured manner. Since the propeller works
only when the user inhales, it automatically propels the drug into the patient’s lungs.

Putting this together required an unorthodox combination of engineering skills. In addition to experts on inhalers, Aespironics’
team includes Dan Adler, whose specialty is designing gas turbines and jet engines. He was a professor at the Technion and
at the U.S. Naval Graduate School and a consultant to such companies as General Dynamics, Pratt & Whitney, and McDonnell Douglas.

Mixing missiles and pills, jets and inhalers may seem strange enough, but the true mashup champion may be Yossi Gross. Born
in Israel and trained in aeronautical engineering at the Technion, Gross worked at Israel Aircraft Industries for seven years
before leaving to pursue more entrepreneurial endeavors.