Dan Senor: Optimistic on Israel, fearful for US Jews

Dan Senor credit: Rami Zarniger
Dan Senor credit: Rami Zarniger

The "Start-Up Nation" co-author tells "Globes" about unprecedented antisemitism in the US and his belief that Israeli tech will come through the war stronger.

Dan Senor, co-author of the bestseller "Start-Up Nation" and a senior advisor to major US politicians, has been well aware of antisemitism all of his life. As the son of a Holocaust survivor, the issue was omnipresent at home. He visits Israel every few months, spent summers here in childhood, and lived in Israel for a year when he was at college. Senor grew up in Canada, but he was born in the US, and later moved back to the US, where he lives today, and where, in recent years, he has seen increased violence against Jews. But at no point, he says, did he ever walk out of his front door and feel vulnerable. Until October 7, 2023.

"It's the first time in my life that I have felt what it means to live with real systemic, grass roots and institutional antisemitism all around my life and all around the lives of my children… and I'm experiencing this for the first time and it's scary," he said during a recent visit to Israel.

Couldn't you have seen it coming? I know many people who said it was probably there all along. We just didn't realize it.

"I think it was definitely beneath the surface. I did a whole episode of my podcast ("Call Me Back", which is very popular in the US) about this. We called the episode, 'The End of a Jewish Golden Age.' It was a conversation I did with John Podhoretz, where John went through all the signs that were there, that we should have seen over the last 20 years but… you still needed a catalyzing event to bring it to the surface.

"One could argue we should have been saying to ourselves at any moment it can get really bad. We better be careful. But I think human nature is very… it's very hard. You react to what's in front of you. You don't react to what might be. And every time there were discussions, 'hey, could it get bad'? I remember from time-to-time people would say there were these violent acts against more religious, more Orthodox Jews, like in Brooklyn, people who, you know… it was just obvious that they were Jewish. There were people getting punched in the face.

"Obviously, you'd see signs on social media, you know, there was rising antisemitism on social media. There were signs. We saw the BDS movement organizing and getting stronger. Obviously, there was increased antisemitism in the progressive movement but we never thought they would become mainstream."

But beyond the antisemitism he sees, Senor also expresses pain over the circumstances. "So, everything feels fine until it doesn't. And the 'until it doesn't' was October 7th. I did not expect the outrage of the world would be directed at Jews for objecting to being massacred. That's exactly what's happened.

"And all you have to look at is the international reaction in the days after October 7th, before Israel even responded to October 7th. Somehow Israel was responsible for what had happened. And in retrospect, when I look back at all the signs, of course, I mean, if you look at the history of antisemitism through the centuries, the vilification of the Jews always coincides with, or follows, a major attack on Jews… Then it blames the Jews for the suffering of the Jews to therefore justify more piling on the Jews."

"Problems that only Israeli innovation can solve "

Senor is one of the greatest believers in the State of Israel. In 2009, he and Saul Singer published their book, "Start-Up Nation," which was also translated into Hebrew (2011, Matar Publishing House), in which they examined how Israel, then a 60-year-old country of 7.1 million people, managed to achieve such economic prosperity. Overnight, the book became a must-have item for every Israeli politician and pundit. The title of the book became the State of Israel’s brand, and in 2010, "Start-Up Nation" reached fifth place on the "New York Times" bestseller list, and topped "The Wall Street Journal" bestseller list.

In November 2023, Senor and Singer published their second book, "The Genius of Israel," in which they try to analyze the State of Israel’s unique resilience, and the genius they found in it and its citizens. The book received a great deal of praise, including from leading newspapers such as "The New York Times, " and immediately became a bestseller in the US. It will be published in Hebrew this coming September by Yedioth Books.

Is Israel still the Start-Up Nation ?

"If you look at the core data, that first sparked our curiosity about start-up nation, the data that was - still endures today. One, Israel has the highest density of startups in the world, of any country in the world. More startups per capita than any country in the world. Two, it attracts the most global venture capital on a per capita basis than any country in the world. Three, it is the number one in the world in R&D as a percentage of GDP. And then, it is number four in the world in terms of Israeli public companies listed on Nasdaq… after countries like the US and China."

Senor lists some figures that are impressive despite the convulsions of the judicial reform and eight months of war.

"Israel has hundreds of venture capital firms, 120 accelerators, 35 incubators, over 400 multinational companies have set up shop in Israel. And as I said, the highest density of startups in the world, about 7,000 startups. So, Israel still is the startup nation."

And it's not just data. Senor knows Israeli companies very well. He is a senior executive at Elliott Investment Management, a private investment firm, and he is the cofounder of Start-Up Nation Central, an NGO in Israel focused on deepening ties between Israeli tech companies and the global innovation economy. "What Israel is even more so now than just a startup nation is it is building big companies too. So not just startups… Now Israelis are starting to build big standalone companies that remain in Israel and perform in all the business functions you expect from a large standalone company. It's not just tech and R&D, it's business development, it's marketing, it's sales, it's consumer interface.

"It used to be that Israel was world renowned for this penchant for creating, you know, scrappy startups to solve problems and then those startups would either sell to big public companies globally, or they would just figure a way to exit quickly but they wouldn't build big standalone companies. In 2013, so a little over a decade ago, there was only one company in Israel that was generating over a billion dollars in annual revenue, and that was Check Point. Today, there are nearly a dozen Israeli companies that are generating over a billion dollars in revenue."

To illustrate how strong Israel is, Senor reiterates that when he and Singer wrote their book in 2009, there were about 150 multinational companies operating in Israel. "Today, there are over 400 hundred multinational companies, so in about a decade to a decade and a half you're talking about a 2.5X-plus growth in multinationals. In our most recent book, we have a chapter that updates where the Start-Up Nation economy is, if you look at the companies that have set up shop in Israel. There's virtually no major tech global tech company in the world today that doesn't have an operation set up in Israel today.

"All these non-tech companies have [also] set up R&D operations in Israel. Coca -Cola, Walmart, Mercedes-Benz, Procter & Gamble. But then you say, wait a minute, what are all these non-tech companies doing, setting up operations in Israel? Well, they all have technology problems they have to solve. So, for Coca-Cola, what matters to you? One of them is water tech, innovation in agritech. If you're Procter & Gamble, what are you concerned with? Data science and AI play extraordinarily important roles in your business. If you talk to executives at auto companies, they believe all the innovation is in seeing the automobile as a communications function. The CTOs of leading American auto companies tell me the only city they spend more time outside of Detroit is Tel Aviv."

Meaning, even non-tech companies come here because of the technology?

"Most multinationals set up shop in a foreign jurisdiction for basically one of several reasons: Firstly the local market. They couldn't care less about the Israeli local market - it's 10 million people at most - it's meaningless in terms of size. Secondly they want to set up shop in the local market or they want to set up shop in a foreign country because that country is like a logistics hub that makes it central to a broader geography. Israel doesn't play a function there historically, because Israel is shut off from (much of) the region; 21 of the 23 Arab League countries complied with the Arab boycott until recently.

"There's only one reason they set up shop in Israel. It’s because all these companies have really complicated problems that they can only solve through innovation - and Israeli talent is unique in the world. And that's what these companies find in Israel. They found it in Israel when we wrote 'Start-Up Nation,' and they're even finding it more and more so today."

"The Israelis don't let us down"

Senor is full of optimism about Israel, but we still want to understand from him how the war will affect the Start-Up Nation. For his part, he refuses to get excited. "When a company sets up shop in a foreign jurisdiction… you don't just like shut it down overnight. Sure, you may size down a little bit, you may size up a little bit, but you're unlikely to find wholesale company after company just suddenly pulling out, and that wasn't the case during the judicial reform, when there was all this talk about the impact on the Israeli economy. Really, virtually no multinationals disappeared entirely, and so far, you haven't seen much of any of it since the war started."

Yes, but if you think about the possibility of a war in the north, it is expected to take a long time. Maybe companies now realize how long it takes, and will want to leave?

"Obviously, that's a hypothetical and for me to respond now is just purely speculative. I don't have a crystal ball, but let me try to answer your question this way: Israel is now fighting the longest war it has ever fought in its history since the War of Independence. And the international investment community and the multinational community are still hanging in there.

"You know, because of reserve duty and call ups, you had something like, you know, 10% to 15 % of the senior employees at many of these companies being called up and it's extremely disruptive. I see it firsthand. And yet. they've been able to sustain. I mean, these businesses are still thriving. So, 2023, there were over $7 billion of exits for Israeli companies. And so will that trend slow down if Israel's in a two front war? I don't know, but it hasn't really slowed down so far. "

Not only does Senor think Israeli tech will not be harmed, he even sees the possibility that it will come out stronger.

"I know this period is brutal and traumatic. You are also putting Israeli talent to a test that no talent pool anywhere in the world can find. And if you go back and look at how Israeli tech did after the first Gulf War, in 1991 when Scud missiles were falling, yet the Intel operation in Israel at the time, which was working on a very important component for Intel, never missed a beat, never missed a shift. That was a wakeup call that basically said, yes, there's geopolitical risk to investing in Israel and setting up shop in Israel, but the Israelis don't let us down. And the talent pool - given the, pressures, and the environment they have to work in - actually come out stronger. And so, they almost become more valuable."

As an example of the assumption that the Israeli talent, forced to work under unreasonable pressure conditions, is an asset for global companies, Senor is reminded of a conversation he had while writing the book. "When we wrote 'Start-Up Nation,' we spoke to Eric Schmidt, who at the time was executive chairman of Google. And he said to Saul and me, 'If you take the average Israeli employee of Google and you put them up against their peers, from any country in the world, any Google employee, any country in the world, any day of the week Google would hire the Israeli.

"Because you don't have at that age someone like in their mid -20s who has the technological talent that Israelis have, the leadership and management talent that young Israelis have, and the comfort level and the interdisciplinary skills that come from working in an extremely stressful, tense, and difficult environment. And that's why Israelis are so attractive. So, I would argue tragically - tragically, because these last eight months have been hell - but I think coming out of this, I would venture to say that Israelis will be even more attractive to the global venture investment and tech community, after all of this, than they were before."

"Israeli society is more cohesive than one could imagine"

In addition to all his other occupations, Senor finds time to have a successful podcast called "Call Me Back" with an average of about a million downloads per month, and a permanent place among the 30 most listened-to current affairs conversations in the US. He discusses all the hot topics there, including what is happening here in Israel.

On the podcast, you speak with all sections of Israeli society. It seems that we have been crumbling as a society for a very long time. Even though after the Hamas attack there was unity here for a while, we seem to have gone back to our old quarrels.

"So, in our most recent book, 'The Genius of Israel,' we chronicled in that book, how just about every decade or decade and a half, Israel has gone, going back to its founding, Israel has gone through a major internal crisis that has resulted in, shall we say, lack of cohesion on steroids. You can go all the way back to, obviously, the founding of the state and the divisions within the founding generation. You could look at the 1950s, the debate within Israel about whether or not Israel should accept reparations from West Germany for the Holocaust. You can look at the divisions in Israel around the first Lebanon war. You look at the debates within Israel over disengagement from Gaza, and how divided the country was. You look at the assassination of Rabin in the nineties, where literally half the country seemed to blame the other half.

"When you think about this, there are these moments where people wondered, are we ever going to be able to get out of this? And yet, Israel and Israelis both have resilience and they have a sense that, that there are events and challenges and crises that are larger than any one of them, and larger than any one faction. And as, as impossible as it is to see in the moment because tensions are so hot, and these disagreements seem unresolvable, and there's no possible compromise, Israelis have shown throughout history that they managed to come together, and work through them. Now, I can't guarantee that will happen this time, but it certainly has happened literally every other time. "

Still, do you think it will happen again this time?

"I think the more important sign is that Israelis have participated in reserve duty in ways that, in numbers and at levels that would have been impossible to imagine on October 6th, 2023. If you would have told me after that day that Israel is going to be attacked, and Israelis from across ideological, political and religious lines are going to act like there was never a judicial reform debate… the point is: there was a desire. Israeli society is far more cohesive today in terms of these divisions than one would have imagined. And I think that there are still political disagreements, but I don't think those political disagreements are any more challenging than the political disagreements that have faced Israel in previous decades, and previous generations.

"That is the thesis of our book. We call it the surprising resilience of a divided nation in a turbulent world. We say: the world is turbulent. There's polarization all over the world. Every Western affluent democracy is experiencing some form of polarization, intense internal disagreement, and intense political and intense political dysfunction. Israel is not an exception. But what Israel has, that these other countries do not, is it has these guardrails. It has societal shock absorbers. A sense among the average Israeli that, despite their strong frustration with other factions within Israeli society, they still believe that this country is larger than themselves, that the center must hold. And there are institutions in Israeli society that I think hold the society together, like right now when things feel really tense, and they feel like on the cusp of a breaking point. Now, by the way, I think things right now are not even as bad or close to a breaking point as they seemed in the spring and summer of '23. And things have held through 2023 and I think things will continue to hold."

"There’s a lot Biden could do right now to appeal to the center"

As mentioned, Senor also has an impressive resume in American politics. He began his professional career as a senior advisor in a variety of political campaigns and in the US government, and served as a senior advisor to several key US politicians, including the George W. Bush administration, and presidential candidate Mitt Romney in his 2012 campaign. The positions exposed him to international relations, and gave him an in-depth knowledge of foreign policy, and national security. All of which gives him a unique perspective on US-Israel relations.

Prime Minister Benjamin Netanyahu released a video attacking the Biden administration for delaying arms shipments. We hear that, behind the scenes, Netanyahu’s people are saying that the administration is turning its back due to internal pressures within the President's party. Is this true?

"Yes, I think that President Biden feels enormous pressure from the very progressive base of the Democratic coalition. He wants to do everything he can heading into the fall, because of the Democratic convention. He's worried about the Democratic convention. His advisors are worried about all this dissent among his base at the Democratic convention and then beyond in the fall dampening enthusiasm for the Democratic ticket. And he wants to do everything he can to get rid of that dissent.

"And his political advisors believe that getting Israel and the news about Israel and Gaza off the front pages will help resolve that. I think it's foolish. I think they're wrong. And I'm not just saying this. I'm not involved in Democratic politics, so I'm certainly not an expert on what motivates the Democratic base, but I speak to a lot of people who are, and there's a sense that they're overreacting, to this issue.

"And in fact, they run the risk of looking like they're enabling, protecting, apologizing for these progressive activists who they're so worried about, who are so loud. But the reality is their volume level is not proportionate to their size in the general population, in the general electorate.

"And if they actually ignored them and stuck to their guns - and when I say Biden should stick to his guns of October, November, December of 2023 - when you saw a real shift in the Biden administration's approach to Israel. They stuck to their guns, and actually took on the progressive base on this issue, it would win them a lot of friends, a lot of allies with the general electorate, with independent voters who swing in elections, you know, between Democrat and Republican, and who are frustrated with the sense of disorder in this country, and the sense that extremists are sort of hijacking the Democratic agenda.

"And I think there's a lot Biden could do right now to appeal to the center, and not try to accommodate the hard Left in the Democratic coalition."

Published by Globes, Israel business news - en.globes.co.il - on July 4, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Dan Senor credit: Rami Zarniger
Dan Senor credit: Rami Zarniger
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