The Battle for Your Computer

CHAPTER 18Small and Nimble—Being a Small Island‐Nation in the Middle East Is Not Such a Bad Start

The State of Israel's starting conditions make it hard to build major companies. A nation of nine million Hebrew speakers is a tiny market for any product. Israel is also a kind of island nation, without open trading relations with its neighbors: it has no relations at all with Syria and Lebanon, and despite peace treaties with Egypt and Jordan, Israel's relationship with them looks more like a ceasefire than genuine peace, and free trade is not in the cards. In all the Middle East, Israel has open long‐term commercial relations only with Turkey, and more recently also with the UAE and Bahrain. So with such a small local market, how can Israelis build major companies? On the face of it, this situation should have condemned the Israeli economy to producing only small, domestic companies. In practice, the cyberindustry tells a completely different story.

“Obviously you can't build a major business in Israel alone,” says Assaf Rappaport, explaining the basic assumption of Israeli entrepreneurs. Developing cybersecurity products demands a huge investment of resources, both in in‐depth technological research about attackers and their methods, and also in developing the technology for a product that global companies with high standards will want to buy. In order to justify this investment and make it pay off, entrepreneurs need huge markets. In order to justify their companies' existence ...