Veterans of Israel’s secretive Unit 8200 head many successful high-tech start-ups

• Gil Schwed, a young billionaires, launched CheckPoint, one of Israel’s leading high-techs.
• The Zisapel brothers, Yehuda and Zonhar, sold and floated a dozen of high-tech companies for hundreds of millions of dollars.
• Yair Cohen, a former brigadier general who once commanded Unit 8200, heads the intelligence cyber department of Elbit Systems, a leading Israeli defense company. “It’s almost impossible to find a technology company in Israel without people from 8200 and in many cases the entrepreneur, the manager or the person who had an idea for the project will be someone from 8200,” Cohen told UPI.
• Aharon Zeevi Farkash, another former commander of Unit 8200, is the founder and chief executive of FST21. Seven of the ten engineers at the company are former Unit 8200 personnel.

The Financial Times commented on FST21: the company’s “main product is a mix of technologies, combining hardware and software to suit a specific need. Such technological mash-ups have long been regarded as a specialty of Israel’s high-tech entrepreneurs. Finally, and perhaps most importantly, the company bears the unmistakable stamp of Israel’s most successful and secretive technology incubator … Unit 8200.”

Farkash says that the unit’s internal procedures and organizational culture read almost like a playbook for the start-up economy. “We are very tolerant of mistakes . . . It is impossible to be creative when fear leads you,” he says. At the same time, the unit hands immense responsibility to men and women barely out of their teens — and tries to instill in them the belief that they can rise to the occasion.

Cohen agrees, telling the FT that the key to success is to find smart, effective solutions for problems that have not even surfaced in the real world. “Ideally, we want to be in a position to understand the implications of a new technology before a terrorist group, or the Syrian army, will start using it,” says Cohen. “If you look at the organization, it is basically made up of hundreds of start-ups,” he explains, adding that the development teams wrestle with all the same problems a start-up encounters: tight budgets, tight deadlines, rising threats from the outside, and constant pressure to perform. “All the time, you are trying to do something not with 300 people but with 30, not with $100 million, but with $10 million.”

Yossi Vardi, who founded the first Israeli software company in 1969, told the FT: “More high-tech billionaires were created from 8200 than from any business school in the country.”

The fact that a successful high-tech company is headed by former operatives of Unit 8200 may not always be helpful to business. One example: in late 2005, representatives of defense and intelligence agencies on the Committee of Foreign Investment in the United States (CFIUS), an inter-agency committee of the U.S. government which reviews the national security implications of foreign investments in U.S. companies or operations, objected to CheckPoint’s acquisition of Maryland-based security software developer Sourcefire. Sourcefire develops software for the U.S. military and intelligence community, and members of the U.S. national security establishment, and quite a few lawmakers, were uncomfortable with the idea of an Israeli company, founded and headed by veterans of Unit 8200, gaining intimate knowledge of Sourcefire’s solutions and applications. With growing efforts in Congress to limit foreign companies’ ownership of security-sensitive U.S. companies, the CheckPoint-Sourcefire deal increasingly appeared to  be doomed, and in March 2006 the two companies announced that the acquisition was cancelled.