Founding in a War Zone

Recent developments in Gaza and ongoing violence elsewhere in the Middle East remind me of the instability of my company’s home country: Israel. It is hard enough to run a start-up, and there are plenty of things that make entrepreneurship a high-risk proposition. But there is nothing like the ultimate security risk, life vs. death, to galvanize a team, to re-invigorate priorities, and ultimately, to inspire performance. I live in Tel Aviv, about three hours from Syria and southern Lebanon. Here the Army is a constant–if sometimes inconvenient–teacher of this important life and business lesson. “Eran Galperin”: and myself have gotten this tutorial more than once while cofounding “Octabox”:

The Army has a huge role in educating Israelis, and played a huge role in making me a better entrepreneur. For starters, living in a war zone matures you a lot. It also breeds a nature for risk-taking. But the Army creates some *big obstacles for start-up founders,* too.

*Army service is mandatory* for Israelis at the age of 18. Men must serve 3 years. Women serve 2. But most Israelis elect to serve longer, spending a month a year in the Reserve Army for as long as 25 years.

One problem is that business owners are obligated to give employees leaves-of-absence for their reserve service, up to 30 days at a time. This especially impacts start-ups, where every employee has a key role. Try to manage a month without your lead developer or VP of marketing! *Best case:* you lose days of development and customers who can’t wait through a product delay. *Worst case:* your employee gets hurt — or doesn’t come back at all.

*We’re supposed to get two months notice* of service, but it isn’t always possible. The Army can call-up reservists with a special mandate whenever we’re needed — like when the country suddenly enters a war state. This uncertainty plagues business owners, because it makes it difficult to plan anything. During states-of-emergency the Army calls you on and off all the time, as the situation, and government authorizations for operations, change–sometimes by the hour.

This is what happened in *summer 2006.* “Fighting broke out last July”:, when Hezbollah fighters began shooting katyusha rockets on some of our cities. Suddenly Eran and I were at risk of being called-up to serve on Israel’s northern border.

In 2006 *Octabox was just a two-man team* working on several “alpha” customer projects. We weren’t even incorporated yet. I got a call from my Reserves officer saying that my unit might get a call. So did Eran. Our real panic was that *they could call-up both of us at the same time.* Translation: no Octabox.

As usual, there were several calls from the Reserve Office, calling-up and then canceling a few hours later when the Army didn’t get the OK for a big operation.

*Eran was called before I was.* We both hoped I wouldn’t be called up at all, that a few days would pass and the conflict would end. It didn’t. Eran was Octabox’s lone developer at that time, so here I was thinking: ‘I’m going to have to go through the ugly experience of outsourcing a job AGAIN.’ (See “Adam’s original Found|READ post”: on outsourcing). I’d have no choice: with projects half-done and deadlines looming, I wouldn’t have time to find a full-time replacement.

At first I was comforted that, if they were going to call one of us, they hadn’t called me. As the project manager, I thought I could at least persuade our clients to give us more time–as fellow-Israelis they would understand. I called our clients to warn them that projects might suffer delays.

*My call finally came* one night while I was at a restaurant. In the middle of dinner I checked my cellular phone to see if I had any missed calls. I saw 3 private calls, and my heart froze. (Naturally, the Army doesn’t register on caller ID.) Indeed, it was the liaision officer from my unit. He left this message:

*”You’ve got 4 hours to get your stuff. We will meet you at X location.”*

Four hours isn’t much time, and it was in the middle of the night, so I really couldn’t do anything. I called my parents, I send a short SMS to Eran, letting him know that I was now headed north for service as well.

The next morning, while I was riding the bus to my reporting station, I made some calls to clients. I had to tell them that their projects wouldn’t only suffer delays. *Our clients’ projects would stop all together until–and unless–we both made it back.* Eran and I would have no cell service, no Internet, no contact even with one another–much less with our customers in the outside world.

There wasn’t much we could do for them from the back of a Humvee on the norther border, _under fire_.

It was stressful.

*In the end I was away with the Army for 25 days* of the “34-day war”: Eran was discharged a few days before I was. Most of our customers were really supportive, since they find themselves in the same situation from time to time. But I still lament the loss of an American customer, who had to cancel his deal with us because we couldn’t furnish the product on time. I had been gone for a month by the time I spoke to him again. *“That’s very long,” he explained. “[I] had to look for someone else.”* I don’t blame him for it. Business goes on. Still, we managed to stay afloat and incorporate Octabox a few months later. I will tell you how we did it, and more about our re-entry to the business world, post-war, in my next post.