Jacob Burak helped pioneer the Israeli venture capital community. Evergreen, which he founded in 1987, was the first venture capital firm forming part of a new wave of technology funds created around that time. Then, a few years ago, Burak did something surprising: He withdrew from investing to devote himself to writing. His two books, Do Chimpanzees Dream of Retirement and Noise, became instant bestsellers in Israel. Burak went, you might say, from being the Israeli John Doerr to being the Israeli Malcolm Gladwell.
Do Chimpanzees Dream of Retirement, which is about how psychology affects business, has just come out in an English edition. Fast Company spoke with Burak about why Israel is a hot place for startups, why dyslexics make such good entrepreneurs, and other matters.
You first attained fame as an Israeli investor. But anyone who picked up this book would have learned as much about psychology as about investment. Why do you think your book struck such a nerve in Israel to become a bestseller?
I am not sure exactly what made Chimps a bestseller, but I believe people liked the book because it stresses the notion that business, at the end of the day, is people (and people are psychology). Another element that might have contributed to its popularity is the honest acknowledgment of the role of chance in business success. So if success is a combination of understanding people’s needs and luck, everybody can be successful–an encouraging message that is probably enough to make any book a bestseller.
Why did you go down the rabbit hole of exploring evolutionary psychology? What can chimpanzees really teach us about business decisions?
If we can come to terms with the fact that a very high percentage of our genetic composure (98.74%) is shared by our closest related species–the chimpanzees–we should also acknowledge the fact that some of our decisions are rooted in evolutionary needs. Our brains are very poorly equipped to cope with the challenges of the modern world. Our “chimpanzee” brain is responsible for almost all our biases. And we all have a lot of those which impair our rationality. But let’s not forget, if everybody were rational, the stock market would not function: For every investor who believes that the stock he is selling is overvalued, luckily, there is someone who is confident that the same stock he is buying is undervalued.
You are not just a passive reader of the literature on psychology and business–you have conducted research yourself, together with Carlo Strenger of Tel Aviv University. As a result of your reading and research, have you come any closer to an answer to what you call “that intriguing question, ‘Are entrepreneurs born or made?'”
They are part born and part bred. Blood type B is found in a much higher percentage (four times as often) in self-made millionaires than in the rest of the population. On the other hand, many of the business CEOs and the United States Presidents are first-born children. Dyslexics compose about 9% of the population while they are 30% of the entrepreneurs (the reason probably being that they have to rely on others and delegate early on in their lives because of their handicap). Later-born children are very good at adopting innovation and assuming risk–a strategy they developed in order to compete with their siblings for the scarce family resource of parental attention. Altogether, family structure turns out to be the key in one’s entrepreneurial aspirations. “Fatherlessness” of some sort–a pressure to essentially become one’s own father at an early age, due to absence or emotional dysfunction of the actual father–was found to be an important trait shared by many entrepreneurs.
You discuss happiness–why it eludes us, how to attain it–in your book. Do you think that businesses, like the nation of Bhutan with its “Gross National Happiness” index, ought to consider a different sort of bottom line? What is the relationship between happiness and business, and should businesses be committed to increasing happiness?
Businesses should not seek to deliver an increased level of happiness of their clients, or even their employees. Chimps is all about choices. Between what has been chosen for us by our evolutionary heritage, our family structure and some cultural constrains, there is not too much left for us to choose. Happiness is one of the few choices that we should be making as individuals and not rely on others to make for us. Avoiding materialistic values is definitely an important move in the right direction, but as you can read in the book, getting a good night’s sleep, having strong relationships, and reaching out to others are better predictors to subjective well-being than any business activity. The only non-business considerations I expect from businesses are to assume some social responsibility for their activities.
Israel is a vibrant place for startups right now. What is it about your country that has created a climate that fosters creativity in business? What are particular lessons that members of the American business community might adopt from Israel? What is lacking here that is in abundance there?
Israelis are released from the army at the age of 22 with two main assets: some degree of maturity which is not characteristic to people of their age elsewhere, and access to invaluable technological know-how that only an innovative state under existential threat can develop. If you analyze the major successes of Israeli companies you will notice that they excel in the same areas the army invests in, namely: communication, image processing, software, security, and the like. On the psychological level I believe that entrepreneurship is all about craving for meaning and significance by leaving a footprint in the sand before we vanish from this earth (it’s not about making money). Unfortunately, this need is amplified in a situation of constant existential threats as we have in Israel.
[Top image: Wikimedia commons]