Allow me to introduce 8-200, the Israel Defense Forces' secret intelligence unit of mythological stature. 8-200 is also the outstanding incubator for senior entrepreneurs of high-tech companies from Checkpoint to NICE, Comverse to ECI and Taldor to AudioCodes. Its alumni head the roll-call of dozens of leading companies and umpteen start-ups.
There are not a few intelligence and computer units in the IDF, so why is this one so special? Why is NICE known to its alumni as the "8-200 Gang," and why do lunches at Compugen and Jacada seem like alumni reunions?
If it seems that the halo surrounding the unit is exaggerated, and that it merely a local myth, come hear the tale of unit graduate Taldor CEO, Asher, when he met a Japanese investor a few years ago. "His first question to me," Asher reminiscences, "Was I a member of the unit?"
Only Asher' first name, like the other alumni mentioned in this article, is used, for reasons of censorship.
Like entrepreneurship, but without the risk
Following dozens of conversations with them, all that remains is to raise one's hands in surrender: at one level, unit 8-200 does not supply the goods, and every attempt to investigate any acts of deceit, desertion or disciplinary infractions, fails. They are very good boys indeed.
The network operates quickly and secretly, just like an intelligence unit - a friend brings in a friend, and if there is no personal acquaintance, the common service in 8-200 is sufficient to make the newly discharged recruit "one of us."
Take the "8-200 Gang" for example. NICE president Benny, and deputy general manager of international marketing, Kobi, both served in the unit, and are aware of the benefits accruing from its alumni.
"The point is," explains Benny, "that the unit intensively develops technology. The work style is quite similar to that of entrepreneurs building start-ups. no methodology and surmounting dynamic challenges. Therefore, people who have already been successful in this experience, will be better acclimatized to start-up companies. On the other hand, in my opinion, candidates from the Air Force, for example, are better in structured, regulated organizations, than the unit's alumni."
"Technion or universities," adds Kobi, "do not supply experience. In the unit, people have six years of practical experience. When they are discharged, they know exactly what they want to do."
The definition "incubator" is very applicable to the unit. "During a person's service," says Kobi, "one has the opportunity to work in a laboratory environment: apolitical and enveloped in a culture striving for excellence, success and goal-oriented."
Benny adds, "Even if someone has failed in a project in the Army, he is not forced to close his start-up. He starts another project and is given another chance to succeed."
IDF Academic Reserve and geniuses from a similar background
Taldor CEO Asher, was discharged from the unit in 1982 with the rank of major. He says that the unit's reputation is widespread across the world. "There is an aura of glory," he says.
"Globes": How did it happen?
"The man who founded the unit and who revealed a little of its veil of total secrecy is Shlomo, its mythological commander. At the end of the 1960s, he convinced then chief of staff David Elazar to recruit a better quality of men for the unit, and launched lobbying campaign on the political echelon to convince the IDF budget branch to allocate more resources. As a result, the unit got men with high IQs who got the order: invent. This was essential. Unlike other branches, like the Israel Air Force, it was impossible to go out on equipment acquisition trips. In intelligence, in order that what you know be not known, you have to develop tools by yourself. This was the unit's heart: the need to invent solutions."
How is invention taught?
"In my time the threat of an enemy attacking was real. We were much more patriotic then, and that was an incentive. In addition, there were the laboratory conditions. On one hand, there were budgets, and on the other, painful problems that needed fast solutions. Work was done with a great deal of cooperation and team work. Personal egos were put aside. That is how things developed."
"The unit's alumni note, too, that the unit from the start selected young men with potential. "It's very simple," says Alon, alumnus and current CTO of IWEB, a start-up that advertises on the Internet. "First of all, the Army carries out intensive searches, selecting people from similar backgrounds, age and interests. I am speaking the men from the Army Academic Reserve who entered the unit, sometimes having already earned MAs, and who already knew each other from university. They underwent technological basic training in the unit, being force to supply rapid creative solutions. When they are discharged, they have a proven advantage."
Ari, entrepreneur of Proficiency, which provides communications solutions between engineering teams in different companies, was discharged in 1985. He says that the Army not only selects the best high school pupils for the units, it sends them to a special class that provides them with entrepreneurial skills. "However, you must remember," says Ari, "that there is an internal stratification. Not every department is equally prestigious. Each one has its own character and interests. You cannot make such all-encompassing generalizations about the unit. I can say that I estimate that 95% of those who served in development positions later became entrepreneurs."
David, who was discharged in 1987, thinks somewhat differently. "The reason that so many of the unit's alumni became entrepreneurs is derived from the freedom given to them in the unit to create. In effect, we were a kind of entrepreneur in military service. The unit encourages technological creativity, and develops experience in meeting impossible challenges." David is deputy director general of development for Power Dsine, which provides solutions for the integrated transmission of voice, data and electricity on a single network.
"It is a technology organization in uniform. There is some eccentricity," says Liam, CEO of RIT Technologies, which provides integrative solutions for managing communications networks. He was discharged from the unit in 1998, but denies that the unit's name opened RIT's doors to him. "I came to company as deputy director general for development for one of its departments. I did not give the unit on my resume. All I wrote was that I had served in the technology unit of the Intelligence Branch. It was enough."
General knowledge, or patent theft?
Two years ago, one of the unit's alumni who currently works in a senior post at a large company, was called to the unit and asked to sign a declaration: "I had to confirm that I had never made any use of the knowledge I gained in the unit."
What was this? Maybe it was the need to remind unit 8-200 alumni regarding the use of military information in civilian life.
Do you know of companies which are based on information from the unit?
"It is a problem, because there are large and respectable companies like Check Point, NICE, Comverse-Efrat, departments of ECI and others, which deal in tangential fields. They all have employees who served in the unit. I want to believe that there is no relationship between the two facts."
Benny of NICE denies the insinuations. "95% of NICE's sales are to the US, in purely civilian sectors. There is absolutely no relationship between what we are doing and what the unit does. On the other hand, you must keep in mind that a man accumulates knowledge - not just in the unit, but in university as well. Knowledge cannot be erased from one's memory. However, I guarantee that none of the companies mentioned above have stolen patents from the Army."
The temptation can be great
"I think that everyone relies on the honesty of the people and knows that they will not use military technology. While a resemblance can be imagined between certain applications on the market and those we learned in the Army, in my opinion, there has no transfer of information."
Gil and Shlomo of Check Point also strenuously deny any transfer of information. "All past experience, including four years military service, contributed to Gil's professional experience and ideas, but 100% of Check Point's technology was developed in Check Point, not in the Army. It is entirely civilian, not military, technology," says the company.
Others have a different opinion regarding information. "Without giving names," says Taldor's Asher, "a great many applications that we see in the private sector were born in the unit. Quite recently, I read in the paper that a general said that the IDF should consider getting royalties on patents that have been translated into commercial products. Picture it, if a company issues at $5 billion, 10% could go to the IDF." iWEB's Alon also admits, "In certain fields, one can see a flow of information, but it is less than expected. The unit does not deal in every commercial sector."
Isn't it tempting to use unique applications from the unit?
David of Power Dsine: "We developed in Power Dsine a technology that was not based on information accumulated in the Army. But we certainly made use of the skills gained in our work there. To the best of my knowledge, most of the unit's alumni do not use information of the technology they gained while serving."
If they do not use the technology, what advantage does a unit alumnus have?
Liam of RiT Technologies: "I think that the key advantage is experience in handling innovative technology, which still lacks literature and information, and being able to do something with it."
And there is no outflow of real information?
"There are alumni who possess some piece of information or other. They do not hide this. My position is quite radical, and I take care to keep confidentiality. Before I was discharged, I was asked to join a company that dealt in the same fields I worked on in the Army. I refused, even though the terms were quite tempting."
Liam refuses to reveal the company's name. "I find it very hard to pass judgement on the situation, but if you are dealing in exclusive information, it raises a problem, in my opinion. If the Army could register even a small part of the hundreds of patents invented therein, it would earn millions.
An Intelligence Expert
Yossi Melman, "Ha'aretz" Intelligence Affairs Correspondent and co-author of "Every Spy a Prince" says, "This is the most important intelligence unit in the State of Israel. More than the Mossad. The information obtained by this unit is of the highest priority to the entire intelligence community."
What is the meaning of the name "8-200"?
Melman : The story making the rounds is that unit began with eight Ashkenazis and 200 immigrants from Iraq. The Iraqi immigrants had previously worked on Iraqi Railways, knew wireless communications and of course, Arabic.
What did they do there?
"It is important to understand that this is a huge unit, that works in many fields. In general, it is responsible for all intelligence that can affect Israel's security. Intelligence gathering in the unit comes from a variety of sources, i.e. listening to all types of broadcasts: telephones, fax, radio. The unit listens, intercepts and decodes information, mostly encrypted, though some is in clear.
"The major challenge is decoding encrypted transmissions. Unit computer experts and mathematicians are responsible for this, using mathematical models and algorithms."
How was the unit born?
"It began as a unit in the Intelligence Service of the Hagana (the pre-State underground army), called "Intelligence Service 2," which was responsible for listening to enemy transmissions. 8-200 has undergone numerous incarnations. Today, it concentrates on intelligence gathering and decoding of encryption codes. It is a good and developed unit, whose contribution to the system is important. It was forbidden to talk about it for years. We have been hearing more about it recently and there have been a few publications in Israel and abroad. The unit recruits quality personnel, which then goes out and markets technologies developed there."
That is a very serious accusation
"In my opinion, many of the Israeli high-tech companies are based on the information amassed in the unit. But they are not exceptional. It happens everywhere. Not a few Mossad agents became businessmen after their retirement, using their connections and information amassed while in the service. There are suggestions of paying royalties to the State, but such suggestions reek of dictatorship."
Networking, Comradeship and Advising Each Other
Even if the glorious technology remains on the base and is not realized on Nasdaq, the unit's alumni enjoy another, no less important, advantage. They form a network of contacts and communications. Veterans meets young men in uniform during their reserve duty, or through acquaintances who are still in the Army. You won't catch them at family picnics, but they maintain professional contact. For this reason, you can find dozens of fresh alumni at NICE, four others in senior posts at AudioCodes and 16, mainly in management positions, at Jacada, which provides solutions for e-commerce sites.
Do you prefer unit alumni over other candidates?
Asher from Taldor says, "I do not automatically recruit applicants from the unit, but their advantages is that we are familiar with the unit's departments. We can learn exactly what an applicant actually did in the Army. I knew my classmates, meeting Menachem, now CEO of Mercado, and previously deputy general manager at Taldor, and Dr. David, who was also a deputy general manager."
Benny and Kobi of NICE believe that serving together helps consolidate, and the network gains strength. Benny reveals, "I admit that we seek the advice of colleagues from the unit who now work for competing companies. I can rely on them not to steal the idea."
NICE and Jacada are not the only ones whose ranks are full of 8-200 alumni. Compugen, founded by Talpiot expatriates, has a respectable group of 8-200 alumni as well. A frequent model is for several alumni from the same department to found a company together. The second model is 'friends inviting friends in.' Alon of iWEB says, "Kobi, who brought me to iWEB, was two drafts ahead of me in the unit. He approached me towards my discharge, and I accepted."
The alumni go fishing for discharged soldiers even before they complete their service?
"These guys are meeting a market demand. I think that if this occurs, it is based on friendship, not fishing."
This is what happened in Power Dsine. David says, "I arrived at the company through Amir. I knew him during my military service, which gave me an incentive to join the company. I knew that I could rely on these people. You cannot compare a half-hour job interview to years of personal acquaintance. Furthermore, it is always possible to get more information from friends from the unit."
RiT Technologies also uses this method. Liam says, "I brought in Guy, who was my deputy in the unit, to be the deputy director for development. I have recently noticed a new trend: newly discharged servicemen prefer founding companies of their own rather than joining established firms."
The feminine side
Rely on the women, who will also be more sober and realistic. Even though the register of alumni shows few women, they are the ones who supply the eye-catching wisdom.
According to unit alumnus Sarah of Compugen, the unit's myth is merely a marketing tool. "You have to understand," Sarah explains, "that the unit recruits high-schoolers just as they are about to be drafted. All the candidates know is that they have to pass a seven-hour exam and two-hour interview. Those who pass go for a seven-month course. Anyone accepted to the course must sign a declaration to serve for two extra years, without knowing anything about the future. No-one knows where he will serve, or what his job will be. No other unit is like this. Everyone knows what will happen when the pilot's course is over.
"Therefore, one of the goodies given to the unit's candidates is the guarantee that they will have a glorious future after their discharge. They toss out names of alumni who hold senior position in the high-tech industry. This is their weapon, and how they convince them to sign up."
What was it like to be a woman in the unit
"There were no differences, except during officers course, when the men did more guard duty. But the Army is a chauvinistic institution. We were five women among 30 men, and in general we felt that they preferred to recruit boys."
Hadas, product development manager at Jacada, was discharged in 1991, and reports that the number of women soldiers is rising. "In my opinion," says Hadas, "30% of the unit consists of women, although the number is lower in the development departments, maybe 10%."
Hadas reports that there is no sense of difference between the unit's men and women. "If a woman is goo, that's it. Being a woman makes no difference." Hadas found both love and work in the unit. She met her husband Yigal in 8-200, and Gidi of Jacada recruited her upon her discharge.
Nerds by their own admission
So most of the unit's soldiers invest in academic degrees and their shining futures, and don't have the time for play tricks or have fun. The work, they say, is hard, and every soldier has a week's KP every few weeks. Fortunately for us, they had classic sergeant-major named Jean. Attempts to discover his name have failed, with all unit alumni supplying the same answer: "His family name was sergeant-major." Sergeant-major Jean granted them no favors. He may have been the only one who could yank them away from their keyboards and reveal to them the joys of KP and other Sisyphean tasks.
Asher of Taldor reminisces, "From afar, I saw the sergeant-major facing a young soldier of 18, who was crying. I won't say who. When I went over to check what was going on, I discovered that the sergeant-major had detained the soldier to base for KP, and forbade him to go submit his doctorate to the university that had been scheduled for that day. I succeeded in releasing him."
Is there a rather spicier tale from the unit's legends?
"One of the legends tell the tale of Itzik, a truly brilliant guy, who was caught speeding, and managed to win an acquittal in court after inventing an algorithm that proved that the police radar was inaccurate. But most of the legends and myths are best kept under wraps."
Wasn't there any fun?
"This was a collection of imps in the positive sense. We invented things that would have been worth millions on the outside."
David of Power Dsine says, "The wildest thing I remember was the hazing ceremony upon promotion. It may not be like in the Golani infantry brigade, but it took me a week to get completely clean of the grease-and-egg compote."
Alon of iWEB shows his courage, admitting, "It isn't the paratroopers. There isn't a strong social element. Guys come to work. In addition, the unit is strongly compartmentalized. If friendships developed, it was in small groups.
Compartmentalization indeed. There is hardly any free movement at headquarters. Every soldier has authorization to enter only a few places, and each team is totally isolated from his neighbors. Military discipline is not rigidly enforced, apparently because there is no need for it. David of Power Dsine remembers, "I was scared when I arrived. I saluted the department head the first time I saw him. He told me that that would also be the last time."
Ezra, vice president of marketing at Bynet heatedly explains, "This was a unit of nerds par excellance. Rafi of Netvision elaborates, "It was an quite anemic unit. People come in the morning and go home at night."
Even so, couples formed, and quite a few marriages got their start in 8-200. Jacada has several. Hadas married Yigal of Texas Instruments (which acquired Libit where he works); Benny of Jacada married Limor, who manages development at Biogal; Nimrod of Jacada met his wife during their military service; and Ofer and Nili also work at Jacada. Good to know that 8-200's energies weren't directed solely inwards.
Published by Israel's Business Arena on 2 August 2000