25 July 2004 Blog Home : July 2004 : Permalink
This post is anecdotal evidence that may or may not be worth extrapolating ....
In the past 10 years or so I have had numerous contacts with various Israeli High Tech startups. I have at least 3 friends who have had entirely separate contacts with different Israeli High Tech startups. We all say the same thing and at second or third hand and after a few beers I have heard similar stories from many others.
What we have discovered is that Israeli business practises are extraordinarily agressive and completely amoral. Here are some guidelines:
There is no point in making a fair offer, any offer you make will be rejected and they will attempt to haggle you down to the point where you are making a loss. They also tend to be slow, late payers with one excuse after another for not making payment on time. The only way to have a beneficial relationship with an Israeli company is to have something they can't get from anywhere else. Then tell them the price and insist on payment in advance. Do not bother negotiating. Just repeat the terms.
Two of my friends have reported that Israeli companies often make an extremely complex bidding process where the bidder has to provide detailed answers to questions about the project and possibly even free samples. Frequently after all the bids are in bidders get told that "the budget has been cancelled sorry" but the company keeps the samples and the bid responses. In these cases it seems that in fatc the company had no intention of awarding the deal, they just wanted the free samples/information in the response.
Insist that all bonuses, incentive based pay etc have the terms written down then go over them with a lawyer to make sure that they are what you think they are. One friend of mine took his (about to be former) employer to court because the employer refused to pay bonuses that he had earned. He only won some of them, those that he had had a lawyer look at and revise.
Insist on a warranty. Insist on stringent penalties for failure and ensure that a lawyer agrees with you. Do not pay in advance. Do not trust Israeli quality control for hardware. Do not buy anything before you have seen it working in your configuration. I have personally witnessed Israeli companies selling products/features that they know do not exist or do not work as have my friends. I have personally seen Israeli hardware with a defect rate of 20%-30% (i.e. about one box in four doesn't work when shipped).
Many of the practises noted above also occur elsewhere. But in my experience there is a difference in degree. There is no good will, no give and take. In cases where I have given the benefit of the doubt and done a little extra I found that henceforward the little extra was expected every time and so on. To put it bluntly there is an assumption that every deal has one winner and one loser. Concepts of win-win or mutual benefit do not seem to be present. Nor does the concept of customer loyalty / long term relationship.
When I look at Israels attitude to the world I see very similar traits.
This is a problem because these traits make it hard for successful negotiations....
It could be that this attitude is the result of generations of discrimination (actually I suspect it is in part), but this is one of those chicken and egg situations because if one party to a deal/negotiation believes that its an all or nothing game then the there won't be many successful deals which means people won't like dealing with you which means discrimination etc.
This means that unfair or not the wall may be the best solution. With a wall there is a definite border and no negotiation and hence no need to feel like have to win. There is an old English saysin thet "good fences make good neighbours" and I think it applies here as much as in suburban gardens or rural farms.