Silicon Wadi Israel - Digitizing orient
Ofek, Adi
Digitalization, autonomous driving, security and connectivity - those trends heavily influence vehicle development in the future. To meet the vast and fast technological changes, strong global networks of Research and Development experts are the foundation. Israel is known as a “start-up nation” – with high investments in research and development. But what does it need to enter a new market? What is necessary to find the best people and the most promising start-ups with the most fascinating ideas and products?
 Music Applause How are you doing? Long day, huh? So, I'll try to tell you a story and not just try to give a regular, dry presentation. I think because I just came back from Asia, from nine years in Asia to Israel, as my team says, you know, you're Israeli, but maybe you're not as Israeli as you were before you left. So, Asia changed me and the international life changed me. And I'm telling you this because I'm going to give you the perspectives of why Israel is considered such an innovative place and maybe what makes us as a country so innovative. And I'm telling you this because I think that there is no one place that has the magic power. I think every country has its own strength, its own values, and I think the beauty in a global village that we live in today is how to leverage all the markets and all the different talents that we have around the world. So, I'm going to talk to you today about what does it mean to be up to tomorrow. Do you know who said that? Being up to tomorrow? Probably not. I wouldn't have. Listen up. Later, you'll see who said that. That's not my sentence, but I loved it. My boss is the head of digital vehicle and mobility at Daimler, and when I presented to him, this quote was in my presentation. And he said, you know what? I love this sentence because we always say we need to be up to date. Who says we need to be up to tomorrow? And I said, okay, that's great inspiration. It's an inspiration for our newly established tech center in Tel Aviv, so it's a topic for my presentation. And then there's another funky question here. Leadership without control. How can you lead if you don't have control? That's another thing I'd like to share with you through this presentation. So I'm going to first start by telling you how did Israel feel to me, or some of my impressions, coming back home after nine years abroad? So I met many people, and they told me, you know what? Israel, not Israel, Daimler is a great leader of innovation. We see a lot of innovation coming from Daimler. We feel that Daimler is not afraid of the not invented here syndrome, meaning we're okay to leverage the ecosystem and do innovation that is not exclusive. But I was asked, towards what are you innovating? What will be your role in the new world? Will you be the one that just delivers the metal, the vehicles? Will you be the robo-taxis, the fleet managers? What will you be? So the answer I gave is, do you know the role of OEMs in this big world or the new world? I'm not sure if we know, but we have our case strategy. Case is identifying, I think, the top big trends that are disrupting our industry. Connected, autonomous, shared, and electric. And our company has put significant investments and focus in each one of those areas. And so, hopefully, by the time the future unveils itself, we will have our hands already in all those different dimensions, because maybe the connected will be dialed up more, maybe the shared, maybe both. So if we have our investments in the right place, hopefully we will be ready for tomorrow. And another thing I said, there's one thing we know for sure. We want to be close to our customer. So within our strategy and diameter, we want to be close to our customers. And another statement I got when I was in Israel is, Israel is very good taking things from zero to ten. But then you give it to the Germans, they take it from ten to a hundred. And that's very true. You know, I came back to Israel, sometimes I say, my God, people have a salad in their heads, so many topics, so many things juggling in their heads. But that's how you spark innovation, and that's where Israel is very strong. And then, do you know the saying that if you watch how people drive on the road, you know how they think? If you think about it, in different countries, you drive in different ways, and it's a mirror of the culture. So if I try to take that, everything's possible. Rules are a recommendation only. And if there's a roadblock, I'll find a way to overcome it and improvise. And these are some reflections of how driving in Israel is and how our culture is. By the way, in Korea, people used to say, oh God, driving in Korea is crazy, but Koreans have a lot of things in common with Israel. So I was not so worried on the road in Korea. Another thing that caught me when I came back to Israel is, I think I was on the phone in Israel in less than six months, more than I was on the entire time that I was in Asia altogether. In Asia, people took email, people chat, less phone conversations. But here, in Israel, a significant amount of time is taken on phones for me. And then, it seems like everyone knows each other. I go to a meeting with a VC. They told me, oh, we know you've been there last week and in another place two weeks before. So of course, Israel is a small market, but it's a very connected market. Everyone talks to each other all the time. That's also part of what makes Israel so innovative. So we communicate all the time with each other. And there was one thing that I was thinking about. I said, in many cultures, rules are a safety net, right? We refer to rules to make sure that our boundaries are clear. Rules are definitely not a safety net in Israel. So what is the safety net in Israel? I think it's the network. I think Israelis really rely on one another as a safety net. And that's also a very interesting comparison that I found for myself. And then, when I was interviewing, you know, when you interview, you interview, right? Not in Israel. Half of the interview was me interviewing, and half of the interview was me selling the job to the candidates. And they were asking as much questions, or as many questions as I was asking them, and questions like, how do you define success? What is tangible deliverables for you in six months, a year? When I told it to some of my colleagues at Daimler, they said, who's asking those questions? Are you asking the people? I said, no, they're asking me. So although it's for positions at Daimler, it's such an amazing company, and I love this company. Still, they feel that they want to interview me and make sure that if they want to come work for us, it's the right company to work for them. And then they look at me. I put this in the presentation because it happened so often. People look at me and they say, isn't Daimler a very conservative company? But we look in your eyes and we see the spark. So there has to be something there. So it's interesting. They look at how I be, how, not what I say, but how I behave and what I have in my eyes to tell them what is the company. I can tell you, I definitely have a spark in my eyes working for such an amazing company. It is amazing. And then some impressions of one of my first employees. So this is employee number one. We're sitting together, first day on the job. And three hours download, I give a download on Daimler on what we have to do together. And at the last 20 minutes, he says, is it okay if I also give you feedback? I'm like, sure. I really believe in a two-way street communication that goes both ways. Go ahead. And he pulls out a full page full of expectation management he has for me. So it's not just me giving my expectation management to the team. They're giving me their expectation management back. And then another reflection. You know, one of our managers joined the team and at the beginning he didn't have a Daimler address. And there was a very important email. That email was in his inbox coming from Germany saying, dear Ola Kallenius, our board member for R&D, we're giving this presentation to the board of management next week. Do you have any comments? There were levels at Daimler, level two, level three, level fours on the emails. I didn't even have time to tell him how to respond to such an email. He got his email address. Five minutes later, he already responded to the email with this big of things he thinks should be included in this deck. And I'm like, oh my God, on end, you know, there's level two, level three, level fours. The presentation is next week. It's already done. So you see the difference in Israel. Hierarchy is not so strong. I remember that when I moved to Singapore after working for Daimler in Israel, but it was more of an Israeli company, the sense of hierarchy at the time that I felt it. It was not something that someone told me. From then till today, it's different. I think hierarchy is less felt at Daimler. Today, you can approach a board member and have a discussion. You really can, where in the past you couldn't. It shows also a bit about the cultural change Daimler is going through, but there is still hierarchy, more than we want maybe. But I really had to tell him, well, you know, it's done a bit different. The reaction was actually good from the recipients. They were not intimidated, and they went along with it. And us Daimler going to Israel is not just about what we want to take out of Israel. It's also how can the interaction between different cultures and different ways of communicating and working can change also Daimler. So this is an example how an interaction between an Israeli culture to a German culture can actually make both cultures better. So why did Mercedes Daimler decide to come to Israel? I think there was an introduction, and yes, Israel is one of the five top technology ecosystems in the world. And innovation is a very strong virtue that we have in Israel. You can see here that the World Economic Forum really ranks Israel among the highest in terms of innovation. Roland Berger did a very, very strong study in Israel, placing the smart mobility, autonomous vehicles, and other technologies really in the center of innovation of Israel today. And there's also significant capital raised about $4.8 billion only last year. Our founding fathers, he's the answer to the first question. So Ben Guion said, the army, for the army, it's not enough to be up to date. You have to be up to tomorrow. And this is now a big inspiration for our new tech center in Tel Aviv. We need to be up to tomorrow when we need to contribute for Daimler to be up to tomorrow. And then Shimon Peres, our former president, said once that one of the greatest contributions of the Jewish history is dissatisfaction. That's quite a funny statement, dissatisfaction. So let's look a little bit about the roots of Israel and the Jewish history. In our roots, we have restlessness. We have adversity. We have curiosity. We have scarcity, drive, passion. I think these are some of the roots that we have that drive innovation in our culture. In the army, look first of all on the ratios of soldiers to leaders. It's a nine to one. It's a relatively flat hierarchy. I think in the US, if I'm not mistaken, it's five to one. And also, you know, you are 18. I went to the army myself as well, of course, like everyone in Israel, which was one of the best times of my life. You're young. You're in charge. You're responsible. You, many times, take very, very significant decisions. They need to be taken on the spot because many times there's absolutely no time. And you're given a framework, but you're also given freedom to improvise and freedom to put content into the topic or into the challenge. And I'm telling you this because I think the army and how it breeds people actually is a great facilitator for the startup ecosystem in Israel. Sometimes the technologies there are extremely advanced. So they come from the army with a mindset of not so much hierarchy, of improvise, find solutions, because there is no other way. We're a small country. We need to be safe. And for that, we need to be resourceful and we need to find solutions. Maximizing resistance in order to be a game changer. Israel is challenging you. It's a very network. You remember I told you it's very network-oriented, and people like talking and communicating and interacting. But they're challenging everything. That's who we are. And we're encouraging disagreements, asking questions. And those things are also encouraging innovation. I think as a lessons learned of the second Lebanon War, Giora Island, he said something which is, if you read it, it's just amazing. He said, it's an officer's job to argue with the chief of staff. If he thinks he's wrong, you should do it assertively, on a basis of professional truth as he sees it. So in our culture, we are encouraged to challenge our leaders. I remember, you know, because in Asia, I was the regional credit head for the region, so I worked with 12 cultures in Korea. It was Korea. And I remember always when I used to work with my teams abroad, I used to say, please challenge me. It's okay to give me difficult feedback, because that's the only way we can do the right thing. If we talk and we find the right solution. When I did this speech to my team in Tel Aviv, they laughed at me, because they don't need me to say that. They would do it anyway if I wanted or if I don't. Immigration. Israel is the biggest melting pot in the world. And it brings in two dimensions. First of all, if you think about our parents, or my parents' generation, most of them were not born in Israel. They come from everywhere around the world. We have Germany, Poland, Russia, we have Ethiopia, we have Morocco, we have Iraq, we have Iran, many, many, many countries. And it's really, those are completely different perspectives coming to Israel. Our parents, most of them had to leave all their fortune when they came back. So the sense it gives you is that you don't have what to lose, you only have what to gain. And that's part of the entrepreneur's spirit in Israel. And the other element is the diversity, because there are a lot of cultures and a lot of different ways of interaction. Failure. I'm Israeli. And I say here on the slides, you have to tolerate a large number of failures in order to innovate. But still as an Israeli, I hate failing. But it's still okay for me to fail. You know, there is also Israeli literature and songs about failing. Failing is okay in Israel. As long as you learn from it, you step back on your feet and you find solutions. I went also, you know, I think in one of my IMD courses that I did, there was a statement there that I really like. It's not what happens to you that defines you. It's how you react to what happens to you that defines you. And if you think about this in the context of failure, if we failed, okay, let's stand with our chins up, learn our lessons and move forward and create a better future, a different future. And you know they say, you know, failure is a gift, feedback is a gift. It's difficult, but it's true. And in Israel, I think you see the stress level and the survival. That's true. In Israel, we have a very high stress level and we do need to survive. And that sparks entrepreneurship and innovation. And now I want to tell you a little bit about the research center that we have established in Tel Aviv. What is our vision? We want to be a magnet, magnet for talent, the best talent that Israel can offer. And we want to be a magnet for the best technologies that are out there to harvest for our company. We want to be a strategic partner for cybersecurity, for our amazing and intelligent cars. We want to harvest or incubate a digital mindset in our people. You remember how I told you about the discussions or the cooperation and the communication we have between Germany and Israel. So that cultivates a mindset as well. And we also want to have it to be a digital innovator. What does that mean? We want to support the implementation of benchmark technologies that can be meaningful for the leadership of Daimler in the tech area for our cars. So where do we stand today? You see that we're still a very small team but very, very strong. We have Al, our new head of cooperation and innovation management sitting here. Everyone that we took is a pride. And I think that's also one of the things the team is telling me. It was important for me and for us to really take the top talents that Israel can offer us so that we can be a strong team that lives... team and amazing results together. We also have, you'll see here, he's a brigade general. He's not an employee. He's an expert that we hired. He was the ex-CIO of the Israeli army and he's helping us with the tech leadership for our company. We have the management team is in place. We chose our offices over there, you can see. And we really set up the KPIs. So I think Al joined us two weeks ago or something. The other managers also over the last two to three months. So we're really ready to start producing this meaningful impact for Daimler. So how do we think Israel can support Daimler innovation? As I said earlier in a few ways, we're going to have an R&D center. So we're going to do development for digital vehicle. We're also going to engage the startup ecosystem. The technologies that those startups can bring to the company you know that we have, maybe you know that we have the startup autobahn company. We have a very good chunk of those companies coming from Israel with those innovations. And we want to leverage the talent, the culture, and the mindset that Daimler has to offer, that Israel has to offer. We want to do hackathons. We want to join innovation programs that maybe are not Daimler innovation program in Israel. We want to do research with universities. But one thing is very important and you can see it over here. The projects need to end up in our cars. If they don't end up, if this innovation doesn't end up in our cars, we've done nothing. And I think what's the challenge that we see and what we want to take up and make a reality is really making sure that all those startups and all those research papers and all these R&D really can be implemented into the vehicles and provide the leadership for Daimler. So there are some questions I get which fortunately or unfortunately I didn't find one answer for. And many answers that I could give can be correct. For example, they asked me, so tell me about the startup ecosystem in Israel. Are you going to buy startups? I can say no. Actually, if you buy a startup which is very mature, it already encompasses the opportunity or the potential to work with many OEMs. And therefore the value in the market would be too high. So no. But you remember MobiLi? MobiLi is a $15 billion transaction that took place in the Israeli market and bought MobiLi for their autonomous vehicles. They were big. They have the potential already to work with multiple OEMs. But the answer was yes, we will do it because it is a strategic move for Intel. So you see, there is no right answer. And then I get a question, well, will you invest in a startup? Maybe you wouldn't buy the startup. Maybe you will invest in the startup. Here again I could say, well, why should I invest? And the answer could be, you know, if you invest, then you'll get the ability to influence the strategic direction the startup is developing their product. That's right. You can also have, how can I say, leadership for six months. You know, for example, if they start with us, they will not work with any other startups for the next six months, and it will give us a lead in the development. So you can do that if you invest, correct? Yeah, you could say that makes perfect sense. But I can also counter that and say, well, but Daimler is so big, most startups would want to work with us anyway. So if they decide to work with us anyway, they would want to listen to us, so we will have the ability to influence their strategic direction. And anyway, they need to dedicate their resources. So maybe we wouldn't have to have an agreement for a lead of six months because it will happen naturally. And then I get questions like, you're setting up an R&D where your people are going to develop, and on the other hand, you're going to go to startups. Isn't this a competition? Yes, it is, but it's also necessary. And I also get questions, shouldn't you develop the most important pillars of the futures on your own, Daimler? Why go and play with the ecosystem? I could say absolutely right, we want to have exclusive technologies, right? But I can also ask you, but can we? Is the disruption manageable? Or do we have to play with the ecosystem in order to be in the lead? So you see, I can look at every question in many, many different directions, and I think it symbolizes the generation where we live today. The disruption is amazing, bringing me to the question leading without control. The disruption is there. I came up with this sentence, not because I thought about it theoretically, but because I was actually, when I came back to Israel, there were so many startups, so many VCs, so many parties at Daimler, and I said, my God, it's very difficult to have control over such a huge platform. I still have to lead. But then I thought of it, and I said, wait a minute, but when you look at the world we're working, it is like that as well. The disruption is so significant, we have to lead, but we don't always have the control. So up to tomorrow, what is my perspective of being up to tomorrow? I think it's harvesting the best technologies out there for a company that are available today. It's identifying the trends that are maybe not available today, but in five to ten years down the road, it's for enemies playing with your friends and enemies, because sometimes you need to do that, and it's playing with the best. And we have some good examples of doing that already at Daimler. You know here are high definition maps for autonomous vehicles. We do it together with our traditional competition like BMW and Audi. And Bosch, we just partnered, this is relatively new, with Bosch for autonomous vehicles. So Daimler wants to lead, but sometimes we work with the best and with our enemies for that. Let it come. My first few months in Israel, sometimes I felt like I'm walking in a forest with my eyes closed. I have to move ahead, I have to find my way through my senses, because I can't see, so I have to really trust my instincts, because the grounds have never been explored before. But I think it's also a very good illustration of the generation we live in now at Daimler and in the automotive world. We don't always have all the answers. We need to explore new territories in the new digital world, and let it come. I want to leave you with this last slide. And you see the picture in the middle. I try to portray something that is modular. I think to be successful in this world, we need to be modular. We need to be connected, and we need to be able to say, okay, this is now the benchmark technology. I take it, I plug it in easily, fast. When it's no longer so updated, I take it out, and I bring in another building block in. And lead without control, be up to tomorrow. The power of we, I really do not believe you can do things as an individual, not an individual person, not an individual organization. We do it as a team. We need to have courage. We need to do it fast. We need to improvise, and tell our bosses off when they're wrong. Thank you very much. APPLAUSE So, questions? Yep. Yeah, question about the choice for Israel. Yeah? The choice for Israel also, a conscious choice to start innovating outside of the traditional car environment that Germany is. Right. Because, I mean, if you look at car innovation, I wouldn't think of Israel. Right, absolutely. So, did you actually move to Israel as a conscious choice to stay outside of this environment to be able to innovate more freely? We came to Israel, you know, the unit that we're belonging to is the digital vehicle. Israel is very strong when it comes to digital, and this is why we decided to come to Israel. But there is the other element that you just touched on, when you need to innovate. Sometimes you need to do it a bit separate, so it helps. We always say, now that we just established the team, it's very important for us to be completely integrated into Daimler, but at the same time, we are a bit separated. To innovate, you need to have the space to innovate. So, it's good that we're separate, but that was not the reason why we did it. We did it because digital is very strong, and the Israel startup scene in Israel, all of it today is extremely... smart mobility focused. Thank you very much. A short question. I arrived a little bit late, so you might have said that in your talk. How many startups in Israel do succeed? What's the percentage and which startups are successful? How many startups in Israel succeed? I think I'll turn over this question to Eyal. About 10% are successful in the rest of the... So, is there any stratification? Can you say it's more internet industries that succeed, whereas restaurants are not successful? Can you say something about that a little bit more? Yeah, the question is actually, is there any stratification? Can you see what type of startups are successful and which are not? One of the interesting factors in Israeli startups is because the local market is tiny. We're about 8.5 million people. Most of the startups things globally from the get-go. So, everyone's thinking about selling to the US, to China, to Europe. In terms of technological trend, it changes over time, depending on the technology. A few years ago, it was big data. So, it really changes over time. Right now, connected vehicles is one of the hottest areas, but it would take us 10 years to know the success factor. So, if you look at venture capital, usually you only know if a fund that invested in startups is successful, 10 years from its inception. So, it really takes a long investment horizon to know if autonomous cars and transportation is going to be a successful sector. So, with your technology, you need strong backup. Is that correct? Yes, definitely. Much longer horizon than an app from 10 years ago. Thank you very much. Maybe I will just add to that that I think that startups, you always see where the focus is. You see innovation comes, and I think there's a very, very strong focus on smart mobility in Israel. And therefore, I think you see many, many more startups in the area of smart mobility, autonomous vehicles in Israel today. I would be interested why the Israeli ecosystem is interested to cooperate with you, because I think Daimler or Mercedes-Benz isn't as big in Israel if you compare it to Google or Facebook. It's not like a really star name, I imagine. So, maybe I'll tell you my experience coming back to Israel. You're right. Google and Facebook are very strong names. But actually, the market perception of Israel was extremely well-perceived for Daimler coming in, you know. And as you remember, I said that the focus of smart mobility in Israel in the startups scene is very, very strong. And so, if you say, okay, this is a focus area for the startups, then, of course, Daimler is a great partner for us. Others in Daimler, so GM was in Israel as the first OEM. They established their site in 2008. They're around, I think, they were around 150 people until, I think, six months ago when they're ramping up to 300. And we were the second OEM coming to Israel. There was a lot of excitement. Now, I think you see also other OEMs really considering coming in, and there are also other OEMs like Renault, but also maybe our more direct competition is coming in. And this is the questions I showed you earlier about me being interviewed just as much as I'm interviewing and how they perceive me was exactly what you were talking about. But I think, I really think that we have enough to offer. And if you watch Daimler's leadership 2020 culture change, I think the company is really going through an amazing transformation. And the question in Israel is always, can I make an impact? And if the answer to that is yes, you can make an impact, then it's an amazing company to work for. This is the way it's perceived. And you can ask, yeah, Luigi just joined. Yeah. So as far as I understood, you have just started your department. How many people in the future will work there? And how will the department be organized? So we will be ramping up to 25 until 2018, establish results and take it from there. I think what I love about this company is we don't try to grab the entire, Israel has a lot to offer in terms of cybersecurity, AI, big data, tons of different areas, autonomous vehicles, many, many cameras, vision, a lot to offer. There's a lot that we can do, but we wanted to take it in stages. So we will establish first results and then take it from there. And I think you asked something else. The second question was, how will you organize your department? Which structure will you focus on certain topics or will you go by functionalities? So yeah. So we will have right now two strong, let's say, professional legs to our hub. First one is the R&D, where we will really do R&D development in cybersecurity and other, let's say, digital innovation. And then we will have the innovation leg that Eyal is leading, where we will harvest the ecosystem, where we will work with startups, we'll do hackathons, do research university research and so forth. So this is the two areas that we will work in. And then you asked, did we establish some key focus areas? We have. So we have for now, these are the first, we have decided what we're going to start with, deliver results and then take it from there. Good. Any more questions from the audience? Thank you for joining. Enjoy the party later. Thank you. Thank you.
 Music  Applause  How are you doing? Long day, huh?  So, I'll try to tell you a story and not just try to give a regular, dry presentation.  I think because I just came back from Asia, from nine years in Asia to Israel,  as my team says, you know, you're Israeli, but maybe you're not as Israeli as you were before you left.  So, Asia changed me and the international life changed me.  And I'm telling you this because I'm going to give you the perspectives of why Israel is considered such an innovative place  and maybe what makes us as a country so innovative.  And I'm telling you this because I think that there is no one place that has the magic power.  I think every country has its own strength, its own values,  and I think the beauty in a global village that we live in today is how to leverage all the markets  and all the different talents that we have around the world.  So, I'm going to talk to you today about what does it mean to be up to tomorrow.  Do you know who said that? Being up to tomorrow?  Probably not. I wouldn't have.  Listen up. Later, you'll see who said that.  That's not my sentence, but I loved it.  My boss is the head of digital vehicle and mobility at Daimler,  and when I presented to him, this quote was in my presentation.  And he said, you know what? I love this sentence because we always say we need to be up to date.  Who says we need to be up to tomorrow? And I said, okay, that's great inspiration.  It's an inspiration for our newly established tech center in Tel Aviv,  so it's a topic for my presentation.  And then there's another funky question here.  Leadership without control. How can you lead if you don't have control?  That's another thing I'd like to share with you through this presentation.  So I'm going to first start by telling you how did Israel feel to me,  or some of my impressions, coming back home after nine years abroad?  So I met many people, and they told me, you know what?  Israel, not Israel, Daimler is a great leader of innovation.  We see a lot of innovation coming from Daimler.  We feel that Daimler is not afraid of the not invented here syndrome,  meaning we're okay to leverage the ecosystem and do innovation that is not exclusive.  But I was asked, towards what are you innovating?  What will be your role in the new world?  Will you be the one that just delivers the metal, the vehicles?  Will you be the robo-taxis, the fleet managers? What will you be?  So the answer I gave is, do you know the role of OEMs in this big world or the new world?  I'm not sure if we know, but we have our case strategy.  Case is identifying, I think, the top big trends that are disrupting our industry.  Connected, autonomous, shared, and electric.  And our company has put significant investments and focus in each one of those areas.  And so, hopefully, by the time the future unveils itself,  we will have our hands already in all those different dimensions,  because maybe the connected will be dialed up more, maybe the shared, maybe both.  So if we have our investments in the right place, hopefully we will be ready for tomorrow.  And another thing I said, there's one thing we know for sure.  We want to be close to our customer.  So within our strategy and diameter, we want to be close to our customers.  And another statement I got when I was in Israel is, Israel is very good taking things from zero to ten.  But then you give it to the Germans, they take it from ten to a hundred.  And that's very true. You know, I came back to Israel, sometimes I say,  my God, people have a salad in their heads, so many topics, so many things juggling in their heads.  But that's how you spark innovation, and that's where Israel is very strong.  And then, do you know the saying that if you watch how people drive on the road,  you know how they think?  If you think about it, in different countries, you drive in different ways,  and it's a mirror of the culture.  So if I try to take that, everything's possible.  Rules are a recommendation only.  And if there's a roadblock, I'll find a way to overcome it and improvise.  And these are some reflections of how driving in Israel is and how our culture is.  By the way, in Korea, people used to say, oh God, driving in Korea is crazy,  but Koreans have a lot of things in common with Israel.  So I was not so worried on the road in Korea.  Another thing that caught me when I came back to Israel is,  I think I was on the phone in Israel in less than six months,  more than I was on the entire time that I was in Asia altogether.  In Asia, people took email, people chat, less phone conversations.  But here, in Israel, a significant amount of time is taken on phones for me.  And then, it seems like everyone knows each other.  I go to a meeting with a VC.  They told me, oh, we know you've been there last week  and in another place two weeks before.  So of course, Israel is a small market, but it's a very connected market.  Everyone talks to each other all the time.  That's also part of what makes Israel so innovative.  So we communicate all the time with each other.  And there was one thing that I was thinking about.  I said, in many cultures, rules are a safety net, right?  We refer to rules to make sure that our boundaries are clear.  Rules are definitely not a safety net in Israel.  So what is the safety net in Israel?  I think it's the network.  I think Israelis really rely on one another as a safety net.  And that's also a very interesting comparison that I found for myself.  And then, when I was interviewing, you know, when you interview, you interview, right?  Not in Israel.  Half of the interview was me interviewing,  and half of the interview was me selling the job to the candidates.  And they were asking as much questions, or as many questions as I was asking them,  and questions like, how do you define success?  What is tangible deliverables for you in six months, a year?  When I told it to some of my colleagues at Daimler, they said,  who's asking those questions?  Are you asking the people?  I said, no, they're asking me.  So although it's for positions at Daimler, it's such an amazing company,  and I love this company.  Still, they feel that they want to interview me and make sure that if they want to come work for us,  it's the right company to work for them.  And then they look at me.  I put this in the presentation because it happened so often.  People look at me and they say, isn't Daimler a very conservative company?  But we look in your eyes and we see the spark.  So there has to be something there.  So it's interesting.  They look at how I be, how, not what I say, but how I behave and what I have in my eyes  to tell them what is the company.  I can tell you, I definitely have a spark in my eyes working for such an amazing company.  It is amazing.  And then some impressions of one of my first employees.  So this is employee number one.  We're sitting together, first day on the job.  And three hours download, I give a download on Daimler on what we have to do together.  And at the last 20 minutes, he says, is it okay if I also give you feedback?  I'm like, sure.  I really believe in a two-way street communication that goes both ways.  Go ahead.  And he pulls out a full page full of expectation management he has for me.  So it's not just me giving my expectation management to the team.  They're giving me their expectation management back.  And then another reflection.  You know, one of our managers joined the team and at the beginning he didn't have a Daimler address.  And there was a very important email.  That email was in his inbox coming from Germany saying, dear Ola Kallenius, our board member for R&D,  we're giving this presentation to the board of management next week.  Do you have any comments?  There were levels at Daimler, level two, level three, level fours on the emails.  I didn't even have time to tell him how to respond to such an email.  He got his email address.  Five minutes later, he already responded to the email with this big of things he thinks should be included in this deck.  And I'm like, oh my God, on end, you know, there's level two, level three, level fours.  The presentation is next week.  It's already done.  So you see the difference in Israel.  Hierarchy is not so strong.  I remember that when I moved to Singapore after working for Daimler in Israel,  but it was more of an Israeli company, the sense of hierarchy at the time that I felt it.  It was not something that someone told me.  From then till today, it's different. I think hierarchy is less felt at Daimler.  Today, you can approach a board member and have a discussion.  You really can, where in the past you couldn't.  It shows also a bit about the cultural change Daimler is going through,  but there is still hierarchy, more than we want maybe.  But I really had to tell him, well, you know, it's done a bit different.  The reaction was actually good from the recipients.  They were not intimidated, and they went along with it.  And us Daimler going to Israel is not just about what we want to take out of Israel.  It's also how can the interaction between different cultures  and different ways of communicating and working can change also Daimler.  So this is an example how an interaction between an Israeli culture to a German culture  can actually make both cultures better.  So why did Mercedes Daimler decide to come to Israel?  I think there was an introduction, and yes, Israel is one of the five top technology ecosystems in the world.  And innovation is a very strong virtue that we have in Israel.  You can see here that the World Economic Forum really ranks Israel among the highest in terms of innovation.  Roland Berger did a very, very strong study in Israel,  placing the smart mobility, autonomous vehicles, and other technologies  really in the center of innovation of Israel today.  And there's also significant capital raised about $4.8 billion only last year.  Our founding fathers, he's the answer to the first question.  So Ben Guion said, the army, for the army, it's not enough to be up to date.  You have to be up to tomorrow.  And this is now a big inspiration for our new tech center in Tel Aviv.  We need to be up to tomorrow when we need to contribute for Daimler to be up to tomorrow.  And then Shimon Peres, our former president, said once that one of the greatest contributions of the Jewish history is dissatisfaction.  That's quite a funny statement, dissatisfaction.  So let's look a little bit about the roots of Israel and the Jewish history.  In our roots, we have restlessness.  We have adversity. We have curiosity.  We have scarcity, drive, passion.  I think these are some of the roots that we have that drive innovation in our culture.  In the army, look first of all on the ratios of soldiers to leaders.  It's a nine to one. It's a relatively flat hierarchy.  I think in the US, if I'm not mistaken, it's five to one.  And also, you know, you are 18. I went to the army myself as well, of course, like everyone in Israel,  which was one of the best times of my life.  You're young. You're in charge. You're responsible.  You, many times, take very, very significant decisions.  They need to be taken on the spot because many times there's absolutely no time.  And you're given a framework, but you're also given freedom to improvise  and freedom to put content into the topic or into the challenge.  And I'm telling you this because I think the army and how it breeds people  actually is a great facilitator for the startup ecosystem in Israel.  Sometimes the technologies there are extremely advanced.  So they come from the army with a mindset of not so much hierarchy,  of improvise, find solutions, because there is no other way.  We're a small country. We need to be safe.  And for that, we need to be resourceful and we need to find solutions.  Maximizing resistance in order to be a game changer.  Israel is challenging you. It's a very network.  You remember I told you it's very network-oriented,  and people like talking and communicating and interacting.  But they're challenging everything. That's who we are.  And we're encouraging disagreements, asking questions.  And those things are also encouraging innovation.  I think as a lessons learned of the second Lebanon War, Giora Island,  he said something which is, if you read it, it's just amazing.  He said, it's an officer's job to argue with the chief of staff.  If he thinks he's wrong, you should do it assertively,  on a basis of professional truth as he sees it.  So in our culture, we are encouraged to challenge our leaders.  I remember, you know, because in Asia, I was the regional credit head for the region,  so I worked with 12 cultures in Korea. It was Korea.  And I remember always when I used to work with my teams abroad,  I used to say, please challenge me.  It's okay to give me difficult feedback,  because that's the only way we can do the right thing.  If we talk and we find the right solution.  When I did this speech to my team in Tel Aviv, they laughed at me,  because they don't need me to say that.  They would do it anyway if I wanted or if I don't.  Immigration. Israel is the biggest melting pot in the world.  And it brings in two dimensions.  First of all, if you think about our parents, or my parents' generation,  most of them were not born in Israel.  They come from everywhere around the world.  We have Germany, Poland, Russia, we have Ethiopia, we have Morocco,  we have Iraq, we have Iran, many, many, many countries.  And it's really, those are completely different perspectives coming to Israel.  Our parents, most of them had to leave all their fortune when they came back.  So the sense it gives you is that you don't have what to lose,  you only have what to gain.  And that's part of the entrepreneur's spirit in Israel.  And the other element is the diversity,  because there are a lot of cultures and a lot of different ways of interaction.  Failure. I'm Israeli.  And I say here on the slides,  you have to tolerate a large number of failures in order to innovate.  But still as an Israeli, I hate failing.  But it's still okay for me to fail.  You know, there is also Israeli literature and songs about failing.  Failing is okay in Israel.  As long as you learn from it, you step back on your feet and you find solutions.  I went also, you know, I think in one of my IMD courses that I did,  there was a statement there that I really like.  It's not what happens to you that defines you.  It's how you react to what happens to you that defines you.  And if you think about this in the context of failure,  if we failed, okay, let's stand with our chins up,  learn our lessons and move forward and create a better future, a different future.  And you know they say, you know, failure is a gift, feedback is a gift.  It's difficult, but it's true.  And in Israel, I think you see the stress level and the survival.  That's true.  In Israel, we have a very high stress level and we do need to survive.  And that sparks entrepreneurship and innovation.  And now I want to tell you a little bit about the research center  that we have established in Tel Aviv.  What is our vision?  We want to be a magnet, magnet for talent,  the best talent that Israel can offer.  And we want to be a magnet for the best technologies that are out there  to harvest for our company.  We want to be a strategic partner for cybersecurity,  for our amazing and intelligent cars.  We want to harvest or incubate a digital mindset in our people.  You remember how I told you about the discussions or the cooperation  and the communication we have between Germany and Israel.  So that cultivates a mindset as well.  And we also want to have it to be a digital innovator.  What does that mean?  We want to support the implementation of benchmark technologies  that can be meaningful for the leadership of Daimler in the tech area for our cars.  So where do we stand today?  You see that we're still a very small team but very, very strong.  We have Al, our new head of cooperation and innovation management sitting here.  Everyone that we took is a pride.  And I think that's also one of the things the team is telling me.  It was important for me and for us to really take the top talents that Israel can offer us  so that we can be a strong team that lives...  team and amazing results together.  We also have, you'll see here, he's a brigade general.  He's not an employee.  He's an expert that we hired.  He was the ex-CIO of the Israeli army and he's helping us with the tech leadership for our company.  We have the management team is in place.  We chose our offices over there, you can see.  And we really set up the KPIs.  So I think Al joined us two weeks ago or something.  The other managers also over the last two to three months.  So we're really ready to start producing this meaningful impact for Daimler.  So how do we think Israel can support Daimler innovation?  As I said earlier in a few ways, we're going to have an R&D center.  So we're going to do development for digital vehicle.  We're also going to engage the startup ecosystem.  The technologies that those startups can bring to the company you know that we have,  maybe you know that we have the startup autobahn company.  We have a very good chunk of those companies coming from Israel with those innovations.  And we want to leverage the talent, the culture, and the mindset that Daimler has to offer,  that Israel has to offer.  We want to do hackathons.  We want to join innovation programs that maybe are not Daimler innovation program  in Israel.  We want to do research with universities.  But one thing is very important and you can see it over here.  The projects need to end up in our cars.  If they don't end up, if this innovation doesn't end up in our cars, we've done nothing.  And I think what's the challenge that we see and what we want to take up and make a reality  is really making sure that all those startups and all those research papers  and all these R&D really can be implemented into the vehicles  and provide the leadership for Daimler.  So there are some questions I get which fortunately or unfortunately  I didn't find one answer for.  And many answers that I could give can be correct.  For example, they asked me,  so tell me about the startup ecosystem in Israel.  Are you going to buy startups?  I can say no.  Actually, if you buy a startup which is very mature,  it already encompasses the opportunity or the potential to work with many OEMs.  And therefore the value in the market would be too high.  So no.  But you remember MobiLi?  MobiLi is a $15 billion transaction that took place in the Israeli market  and bought MobiLi for their autonomous vehicles.  They were big.  They have the potential already to work with multiple OEMs.  But the answer was yes, we will do it because it is a strategic move for Intel.  So you see, there is no right answer.  And then I get a question, well, will you invest in a startup?  Maybe you wouldn't buy the startup.  Maybe you will invest in the startup.  Here again I could say, well, why should I invest?  And the answer could be, you know, if you invest,  then you'll get the ability to influence the strategic direction  the startup is developing their product.  That's right.  You can also have, how can I say, leadership for six months.  You know, for example, if they start with us,  they will not work with any other startups for the next six months,  and it will give us a lead in the development.  So you can do that if you invest, correct?  Yeah, you could say that makes perfect sense.  But I can also counter that and say, well, but Daimler is so big,  most startups would want to work with us anyway.  So if they decide to work with us anyway, they would want to listen to us,  so we will have the ability to influence their strategic direction.  And anyway, they need to dedicate their resources.  So maybe we wouldn't have to have an agreement for a lead of six months  because it will happen naturally.  And then I get questions like, you're setting up an R&D  where your people are going to develop,  and on the other hand, you're going to go to startups.  Isn't this a competition?  Yes, it is, but it's also necessary.  And I also get questions, shouldn't you develop the most important pillars  of the futures on your own, Daimler?  Why go and play with the ecosystem?  I could say absolutely right, we want to have exclusive technologies, right?  But I can also ask you, but can we?  Is the disruption manageable?  Or do we have to play with the ecosystem in order to be in the lead?  So you see, I can look at every question in many, many different directions,  and I think it symbolizes the generation where we live today.  The disruption is amazing, bringing me to the question leading without control.  The disruption is there.  I came up with this sentence, not because I thought about it theoretically,  but because I was actually, when I came back to Israel,  there were so many startups, so many VCs, so many parties at Daimler,  and I said, my God, it's very difficult to have control over such a huge platform.  I still have to lead.  But then I thought of it, and I said, wait a minute,  but when you look at the world we're working, it is like that as well.  The disruption is so significant, we have to lead,  but we don't always have the control.  So up to tomorrow, what is my perspective of being up to tomorrow?  I think it's harvesting the best technologies out there for a company that are available today.  It's identifying the trends that are maybe not available today,  but in five to ten years down the road,  it's for enemies playing with your friends and enemies,  because sometimes you need to do that, and it's playing with the best.  And we have some good examples of doing that already at Daimler.  You know here are high definition maps for autonomous vehicles.  We do it together with our traditional competition like BMW and Audi.  And Bosch, we just partnered, this is relatively new,  with Bosch for autonomous vehicles.  So Daimler wants to lead, but sometimes we work with the best  and with our enemies for that.  Let it come.  My first few months in Israel, sometimes I felt like I'm walking in a forest  with my eyes closed.  I have to move ahead, I have to find my way through my senses,  because I can't see, so I have to really trust my instincts,  because the grounds have never been explored before.  But I think it's also a very good illustration of the generation  we live in now at Daimler and in the automotive world.  We don't always have all the answers.  We need to explore new territories in the new digital world,  and let it come.  I want to leave you with this last slide.  And you see the picture in the middle.  I try to portray something that is modular.  I think to be successful in this world, we need to be modular.  We need to be connected, and we need to be able to say,  okay, this is now the benchmark technology.  I take it, I plug it in easily, fast.  When it's no longer so updated, I take it out,  and I bring in another building block in.  And lead without control, be up to tomorrow.  The power of we, I really do not believe you can do things as an individual,  not an individual person, not an individual organization.  We do it as a team.  We need to have courage.  We need to do it fast.  We need to improvise, and tell our bosses off when they're wrong.  Thank you very much.  APPLAUSE  So, questions?  Yep.  Yeah, question about the choice for Israel.  Yeah?  The choice for Israel also, a conscious choice to start innovating outside of the traditional car environment that Germany is.  Right.  Because, I mean, if you look at car innovation, I wouldn't think of Israel.  Right, absolutely.  So, did you actually move to Israel as a conscious choice to stay outside of this environment to be able to innovate more freely?  We came to Israel, you know, the unit that we're belonging to is the digital vehicle.  Israel is very strong when it comes to digital, and this is why we decided to come to Israel.  But there is the other element that you just touched on, when you need to innovate.  Sometimes you need to do it a bit separate, so it helps.  We always say, now that we just established the team, it's very important for us to be completely integrated into Daimler,  but at the same time, we are a bit separated.  To innovate, you need to have the space to innovate.  So, it's good that we're separate, but that was not the reason why we did it.  We did it because digital is very strong, and the Israel startup scene in Israel, all of it today is extremely...  smart mobility focused.  Thank you very much.  A short question.  I arrived a little bit late, so you might have said that in your talk.  How many startups in Israel do succeed? What's the percentage and which startups are successful?  How many startups in Israel succeed?  I think I'll turn over this question to Eyal.  About 10% are successful in the rest of the...  So, is there any stratification?  Can you say it's more internet industries that succeed, whereas restaurants are not successful?  Can you say something about that a little bit more?  Yeah, the question is actually, is there any stratification?  Can you see what type of startups are successful and which are not?  One of the interesting factors in Israeli startups is because the local market is tiny.  We're about 8.5 million people.  Most of the startups things globally from the get-go.  So, everyone's thinking about selling to the US, to China, to Europe.  In terms of technological trend, it changes over time, depending on the technology.  A few years ago, it was big data.  So, it really changes over time.  Right now, connected vehicles is one of the hottest areas,  but it would take us 10 years to know the success factor.  So, if you look at venture capital, usually you only know if a fund that invested in startups is successful,  10 years from its inception.  So, it really takes a long investment horizon to know if autonomous cars and transportation is going to be a successful sector.  So, with your technology, you need strong backup. Is that correct?  Yes, definitely. Much longer horizon than an app from 10 years ago.  Thank you very much.  Maybe I will just add to that that I think that startups, you always see where the focus is.  You see innovation comes, and I think there's a very, very strong focus on smart mobility in Israel.  And therefore, I think you see many, many more startups in the area of smart mobility,  autonomous vehicles in Israel today.  I would be interested why the Israeli ecosystem is interested to cooperate with you,  because I think Daimler or Mercedes-Benz isn't as big in Israel if you compare it to Google or Facebook.  It's not like a really star name, I imagine.  So, maybe I'll tell you my experience coming back to Israel.  You're right. Google and Facebook are very strong names.  But actually, the market perception of Israel was extremely well-perceived for Daimler coming in, you know.  And as you remember, I said that the focus of smart mobility in Israel in the startups scene is very, very strong.  And so, if you say, okay, this is a focus area for the startups, then, of course, Daimler is a great partner for us.  Others in Daimler, so GM was in Israel as the first OEM. They established their site in 2008.  They're around, I think, they were around 150 people until, I think, six months ago when they're ramping up to 300.  And we were the second OEM coming to Israel. There was a lot of excitement.  Now, I think you see also other OEMs really considering coming in, and there are also other OEMs like Renault, but also maybe our more direct competition is coming in.  And this is the questions I showed you earlier about me being interviewed just as much as I'm interviewing and how they perceive me was exactly what you were talking about.  But I think, I really think that we have enough to offer. And if you watch Daimler's leadership 2020 culture change, I think the company is really going through an amazing transformation.  And the question in Israel is always, can I make an impact? And if the answer to that is yes, you can make an impact, then it's an amazing company to work for.  This is the way it's perceived. And you can ask, yeah, Luigi just joined.  Yeah.  So as far as I understood, you have just started your department. How many people in the future will work there? And how will the department be organized?  So we will be ramping up to 25 until 2018, establish results and take it from there.  I think what I love about this company is we don't try to grab the entire, Israel has a lot to offer in terms of cybersecurity, AI, big data, tons of different areas, autonomous vehicles, many, many cameras, vision, a lot to offer.  There's a lot that we can do, but we wanted to take it in stages. So we will establish first results and then take it from there. And I think you asked something else.  The second question was, how will you organize your department? Which structure will you focus on certain topics or will you go by functionalities?  So yeah.  So we will have right now two strong, let's say, professional legs to our hub. First one is the R&D, where we will really do R&D development in cybersecurity and other, let's say, digital innovation.  And then we will have the innovation leg that Eyal is leading, where we will harvest the ecosystem, where we will work with startups, we'll do hackathons, do research university research and so forth.  So this is the two areas that we will work in. And then you asked, did we establish some key focus areas? We have. So we have for now, these are the first, we have decided what we're going to start with, deliver results and then take it from there.  Good.  Any more questions from the audience?  Thank you for joining. Enjoy the party later. Thank you. Thank you.
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Music Applause How are you doing? Long day, huh? So, I'll try to tell you a story and not just try to give a regular, dry presentation. I think because I just came back from Asia, from nine years in Asia to Israel, as my team says, you know, you're Israeli, but maybe you're not as Israeli as you were before you left. So, Asia changed me and the international life changed me. And I'm telling you this because I'm going to give you the perspectives of why Israel is considered such an innovative place and maybe what makes us as a country so innovative. And I'm telling you this because I think that there is no one place that has the magic power. I think every country has its own strength, its own values, and I think the beauty in a global village that we live in today is how to leverage all the markets and all the different talents that we have around the world. So, I'm going to talk to you today about what does it mean to be up to tomorrow. Do you know who said that? Being up to tomorrow? Probably not. I wouldn't have. Listen up. Later, you'll see who said that. That's not my sentence, but I loved it. My boss is the head of digital vehicle and mobility at Daimler, and when I presented to him, this quote was in my presentation. And he said, you know what? I love this sentence because we always say we need to be up to date. Who says we need to be up to tomorrow? And I said, okay, that's great inspiration. It's an inspiration for our newly established tech center in Tel Aviv, so it's a topic for my presentation. And then there's another funky question here. Leadership without control. How can you lead if you don't have control? That's another thing I'd like to share with you through this presentation. So I'm going to first start by telling you how did Israel feel to me, or some of my impressions, coming back home after nine years abroad? So I met many people, and they told me, you know what? Israel, not Israel, Daimler is a great leader of innovation. We see a lot of innovation coming from Daimler. We feel that Daimler is not afraid of the not invented here syndrome, meaning we're okay to leverage the ecosystem and do innovation that is not exclusive. But I was asked, towards what are you innovating? What will be your role in the new world? Will you be the one that just delivers the metal, the vehicles? Will you be the robo-taxis, the fleet managers? What will you be? So the answer I gave is, do you know the role of OEMs in this big world or the new world? I'm not sure if we know, but we have our case strategy. Case is identifying, I think, the top big trends that are disrupting our industry. Connected, autonomous, shared, and electric. And our company has put significant investments and focus in each one of those areas. And so, hopefully, by the time the future unveils itself, we will have our hands already in all those different dimensions, because maybe the connected will be dialed up more, maybe the shared, maybe both. So if we have our investments in the right place, hopefully we will be ready for tomorrow. And another thing I said, there's one thing we know for sure. We want to be close to our customer. So within our strategy and diameter, we want to be close to our customers. And another statement I got when I was in Israel is, Israel is very good taking things from zero to ten. But then you give it to the Germans, they take it from ten to a hundred. And that's very true. You know, I came back to Israel, sometimes I say, my God, people have a salad in their heads, so many topics, so many things juggling in their heads. But that's how you spark innovation, and that's where Israel is very strong. And then, do you know the saying that if you watch how people drive on the road, you know how they think? If you think about it, in different countries, you drive in different ways, and it's a mirror of the culture. So if I try to take that, everything's possible. Rules are a recommendation only. And if there's a roadblock, I'll find a way to overcome it and improvise. And these are some reflections of how driving in Israel is and how our culture is. By the way, in Korea, people used to say, oh God, driving in Korea is crazy, but Koreans have a lot of things in common with Israel. So I was not so worried on the road in Korea. Another thing that caught me when I came back to Israel is, I think I was on the phone in Israel in less than six months, more than I was on the entire time that I was in Asia altogether. In Asia, people took email, people chat, less phone conversations. But here, in Israel, a significant amount of time is taken on phones for me. And then, it seems like everyone knows each other. I go to a meeting with a VC. They told me, oh, we know you've been there last week and in another place two weeks before. So of course, Israel is a small market, but it's a very connected market. Everyone talks to each other all the time. That's also part of what makes Israel so innovative. So we communicate all the time with each other. And there was one thing that I was thinking about. I said, in many cultures, rules are a safety net, right? We refer to rules to make sure that our boundaries are clear. Rules are definitely not a safety net in Israel. So what is the safety net in Israel? I think it's the network. I think Israelis really rely on one another as a safety net. And that's also a very interesting comparison that I found for myself. And then, when I was interviewing, you know, when you interview, you interview, right? Not in Israel. Half of the interview was me interviewing, and half of the interview was me selling the job to the candidates. And they were asking as much questions, or as many questions as I was asking them, and questions like, how do you define success? What is tangible deliverables for you in six months, a year? When I told it to some of my colleagues at Daimler, they said, who's asking those questions? Are you asking the people? I said, no, they're asking me. So although it's for positions at Daimler, it's such an amazing company, and I love this company. Still, they feel that they want to interview me and make sure that if they want to come work for us, it's the right company to work for them. And then they look at me. I put this in the presentation because it happened so often. People look at me and they say, isn't Daimler a very conservative company? But we look in your eyes and we see the spark. So there has to be something there. So it's interesting. They look at how I be, how, not what I say, but how I behave and what I have in my eyes to tell them what is the company. I can tell you, I definitely have a spark in my eyes working for such an amazing company. It is amazing. And then some impressions of one of my first employees. So this is employee number one. We're sitting together, first day on the job. And three hours download, I give a download on Daimler on what we have to do together. And at the last 20 minutes, he says, is it okay if I also give you feedback? I'm like, sure. I really believe in a two-way street communication that goes both ways. Go ahead. And he pulls out a full page full of expectation management he has for me. So it's not just me giving my expectation management to the team. They're giving me their expectation management back. And then another reflection. You know, one of our managers joined the team and at the beginning he didn't have a Daimler address. And there was a very important email. That email was in his inbox coming from Germany saying, dear Ola Kallenius, our board member for R&D, we're giving this presentation to the board of management next week. Do you have any comments? There were levels at Daimler, level two, level three, level fours on the emails. I didn't even have time to tell him how to respond to such an email. He got his email address. Five minutes later, he already responded to the email with this big of things he thinks should be included in this deck. And I'm like, oh my God, on end, you know, there's level two, level three, level fours. The presentation is next week. It's already done. So you see the difference in Israel. Hierarchy is not so strong. I remember that when I moved to Singapore after working for Daimler in Israel, but it was more of an Israeli company, the sense of hierarchy at the time that I felt it. It was not something that someone told me. From then till today, it's different. I think hierarchy is less felt at Daimler. Today, you can approach a board member and have a discussion. You really can, where in the past you couldn't. It shows also a bit about the cultural change Daimler is going through, but there is still hierarchy, more than we want maybe. But I really had to tell him, well, you know, it's done a bit different. The reaction was actually good from the recipients. They were not intimidated, and they went along with it. And us Daimler going to Israel is not just about what we want to take out of Israel. It's also how can the interaction between different cultures and different ways of communicating and working can change also Daimler. So this is an example how an interaction between an Israeli culture to a German culture can actually make both cultures better. So why did Mercedes Daimler decide to come to Israel? I think there was an introduction, and yes, Israel is one of the five top technology ecosystems in the world. And innovation is a very strong virtue that we have in Israel. You can see here that the World Economic Forum really ranks Israel among the highest in terms of innovation. Roland Berger did a very, very strong study in Israel, placing the smart mobility, autonomous vehicles, and other technologies really in the center of innovation of Israel today. And there's also significant capital raised about $4.8 billion only last year. Our founding fathers, he's the answer to the first question. So Ben Guion said, the army, for the army, it's not enough to be up to date. You have to be up to tomorrow. And this is now a big inspiration for our new tech center in Tel Aviv. We need to be up to tomorrow when we need to contribute for Daimler to be up to tomorrow. And then Shimon Peres, our former president, said once that one of the greatest contributions of the Jewish history is dissatisfaction. That's quite a funny statement, dissatisfaction. So let's look a little bit about the roots of Israel and the Jewish history. In our roots, we have restlessness. We have adversity. We have curiosity. We have scarcity, drive, passion. I think these are some of the roots that we have that drive innovation in our culture. In the army, look first of all on the ratios of soldiers to leaders. It's a nine to one. It's a relatively flat hierarchy. I think in the US, if I'm not mistaken, it's five to one. And also, you know, you are 18. I went to the army myself as well, of course, like everyone in Israel, which was one of the best times of my life. You're young. You're in charge. You're responsible. You, many times, take very, very significant decisions. They need to be taken on the spot because many times there's absolutely no time. And you're given a framework, but you're also given freedom to improvise and freedom to put content into the topic or into the challenge. And I'm telling you this because I think the army and how it breeds people actually is a great facilitator for the startup ecosystem in Israel. Sometimes the technologies there are extremely advanced. So they come from the army with a mindset of not so much hierarchy, of improvise, find solutions, because there is no other way. We're a small country. We need to be safe. And for that, we need to be resourceful and we need to find solutions. Maximizing resistance in order to be a game changer. Israel is challenging you. It's a very network. You remember I told you it's very network-oriented, and people like talking and communicating and interacting. But they're challenging everything. That's who we are. And we're encouraging disagreements, asking questions. And those things are also encouraging innovation. I think as a lessons learned of the second Lebanon War, Giora Island, he said something which is, if you read it, it's just amazing. He said, it's an officer's job to argue with the chief of staff. If he thinks he's wrong, you should do it assertively, on a basis of professional truth as he sees it. So in our culture, we are encouraged to challenge our leaders. I remember, you know, because in Asia, I was the regional credit head for the region, so I worked with 12 cultures in Korea. It was Korea. And I remember always when I used to work with my teams abroad, I used to say, please challenge me. It's okay to give me difficult feedback, because that's the only way we can do the right thing. If we talk and we find the right solution. When I did this speech to my team in Tel Aviv, they laughed at me, because they don't need me to say that. They would do it anyway if I wanted or if I don't. Immigration. Israel is the biggest melting pot in the world. And it brings in two dimensions. First of all, if you think about our parents, or my parents' generation, most of them were not born in Israel. They come from everywhere around the world. We have Germany, Poland, Russia, we have Ethiopia, we have Morocco, we have Iraq, we have Iran, many, many, many countries. And it's really, those are completely different perspectives coming to Israel. Our parents, most of them had to leave all their fortune when they came back. So the sense it gives you is that you don't have what to lose, you only have what to gain. And that's part of the entrepreneur's spirit in Israel. And the other element is the diversity, because there are a lot of cultures and a lot of different ways of interaction. Failure. I'm Israeli. And I say here on the slides, you have to tolerate a large number of failures in order to innovate. But still as an Israeli, I hate failing. But it's still okay for me to fail. You know, there is also Israeli literature and songs about failing. Failing is okay in Israel. As long as you learn from it, you step back on your feet and you find solutions. I went also, you know, I think in one of my IMD courses that I did, there was a statement there that I really like. It's not what happens to you that defines you. It's how you react to what happens to you that defines you. And if you think about this in the context of failure, if we failed, okay, let's stand with our chins up, learn our lessons and move forward and create a better future, a different future. And you know they say, you know, failure is a gift, feedback is a gift. It's difficult, but it's true. And in Israel, I think you see the stress level and the survival. That's true. In Israel, we have a very high stress level and we do need to survive. And that sparks entrepreneurship and innovation. And now I want to tell you a little bit about the research center that we have established in Tel Aviv. What is our vision? We want to be a magnet, magnet for talent, the best talent that Israel can offer. And we want to be a magnet for the best technologies that are out there to harvest for our company. We want to be a strategic partner for cybersecurity, for our amazing and intelligent cars. We want to harvest or incubate a digital mindset in our people. You remember how I told you about the discussions or the cooperation and the communication we have between Germany and Israel. So that cultivates a mindset as well. And we also want to have it to be a digital innovator. What does that mean? We want to support the implementation of benchmark technologies that can be meaningful for the leadership of Daimler in the tech area for our cars. So where do we stand today? You see that we're still a very small team but very, very strong. We have Al, our new head of cooperation and innovation management sitting here. Everyone that we took is a pride. And I think that's also one of the things the team is telling me. It was important for me and for us to really take the top talents that Israel can offer us so that we can be a strong team that lives... team and amazing results together. We also have, you'll see here, he's a brigade general. He's not an employee. He's an expert that we hired. He was the ex-CIO of the Israeli army and he's helping us with the tech leadership for our company. We have the management team is in place. We chose our offices over there, you can see. And we really set up the KPIs. So I think Al joined us two weeks ago or something. The other managers also over the last two to three months. So we're really ready to start producing this meaningful impact for Daimler. So how do we think Israel can support Daimler innovation? As I said earlier in a few ways, we're going to have an R&D center. So we're going to do development for digital vehicle. We're also going to engage the startup ecosystem. The technologies that those startups can bring to the company you know that we have, maybe you know that we have the startup autobahn company. We have a very good chunk of those companies coming from Israel with those innovations. And we want to leverage the talent, the culture, and the mindset that Daimler has to offer, that Israel has to offer. We want to do hackathons. We want to join innovation programs that maybe are not Daimler innovation program in Israel. We want to do research with universities. But one thing is very important and you can see it over here. The projects need to end up in our cars. If they don't end up, if this innovation doesn't end up in our cars, we've done nothing. And I think what's the challenge that we see and what we want to take up and make a reality is really making sure that all those startups and all those research papers and all these R&D really can be implemented into the vehicles and provide the leadership for Daimler. So there are some questions I get which fortunately or unfortunately I didn't find one answer for. And many answers that I could give can be correct. For example, they asked me, so tell me about the startup ecosystem in Israel. Are you going to buy startups? I can say no. Actually, if you buy a startup which is very mature, it already encompasses the opportunity or the potential to work with many OEMs. And therefore the value in the market would be too high. So no. But you remember MobiLi? MobiLi is a $15 billion transaction that took place in the Israeli market and bought MobiLi for their autonomous vehicles. They were big. They have the potential already to work with multiple OEMs. But the answer was yes, we will do it because it is a strategic move for Intel. So you see, there is no right answer. And then I get a question, well, will you invest in a startup? Maybe you wouldn't buy the startup. Maybe you will invest in the startup. Here again I could say, well, why should I invest? And the answer could be, you know, if you invest, then you'll get the ability to influence the strategic direction the startup is developing their product. That's right. You can also have, how can I say, leadership for six months. You know, for example, if they start with us, they will not work with any other startups for the next six months, and it will give us a lead in the development. So you can do that if you invest, correct? Yeah, you could say that makes perfect sense. But I can also counter that and say, well, but Daimler is so big, most startups would want to work with us anyway. So if they decide to work with us anyway, they would want to listen to us, so we will have the ability to influence their strategic direction. And anyway, they need to dedicate their resources. So maybe we wouldn't have to have an agreement for a lead of six months because it will happen naturally. And then I get questions like, you're setting up an R&D where your people are going to develop, and on the other hand, you're going to go to startups. Isn't this a competition? Yes, it is, but it's also necessary. And I also get questions, shouldn't you develop the most important pillars of the futures on your own, Daimler? Why go and play with the ecosystem? I could say absolutely right, we want to have exclusive technologies, right? But I can also ask you, but can we? Is the disruption manageable? Or do we have to play with the ecosystem in order to be in the lead? So you see, I can look at every question in many, many different directions, and I think it symbolizes the generation where we live today. The disruption is amazing, bringing me to the question leading without control. The disruption is there. I came up with this sentence, not because I thought about it theoretically, but because I was actually, when I came back to Israel, there were so many startups, so many VCs, so many parties at Daimler, and I said, my God, it's very difficult to have control over such a huge platform. I still have to lead. But then I thought of it, and I said, wait a minute, but when you look at the world we're working, it is like that as well. The disruption is so significant, we have to lead, but we don't always have the control. So up to tomorrow, what is my perspective of being up to tomorrow? I think it's harvesting the best technologies out there for a company that are available today. It's identifying the trends that are maybe not available today, but in five to ten years down the road, it's for enemies playing with your friends and enemies, because sometimes you need to do that, and it's playing with the best. And we have some good examples of doing that already at Daimler. You know here are high definition maps for autonomous vehicles. We do it together with our traditional competition like BMW and Audi. And Bosch, we just partnered, this is relatively new, with Bosch for autonomous vehicles. So Daimler wants to lead, but sometimes we work with the best and with our enemies for that. Let it come. My first few months in Israel, sometimes I felt like I'm walking in a forest with my eyes closed. I have to move ahead, I have to find my way through my senses, because I can't see, so I have to really trust my instincts, because the grounds have never been explored before. But I think it's also a very good illustration of the generation we live in now at Daimler and in the automotive world. We don't always have all the answers. We need to explore new territories in the new digital world, and let it come. I want to leave you with this last slide. And you see the picture in the middle. I try to portray something that is modular. I think to be successful in this world, we need to be modular. We need to be connected, and we need to be able to say, okay, this is now the benchmark technology. I take it, I plug it in easily, fast. When it's no longer so updated, I take it out, and I bring in another building block in. And lead without control, be up to tomorrow. The power of we, I really do not believe you can do things as an individual, not an individual person, not an individual organization. We do it as a team. We need to have courage. We need to do it fast. We need to improvise, and tell our bosses off when they're wrong. Thank you very much. APPLAUSE So, questions? Yep. Yeah, question about the choice for Israel. Yeah? The choice for Israel also, a conscious choice to start innovating outside of the traditional car environment that Germany is. Right. Because, I mean, if you look at car innovation, I wouldn't think of Israel. Right, absolutely. So, did you actually move to Israel as a conscious choice to stay outside of this environment to be able to innovate more freely? We came to Israel, you know, the unit that we're belonging to is the digital vehicle. Israel is very strong when it comes to digital, and this is why we decided to come to Israel. But there is the other element that you just touched on, when you need to innovate. Sometimes you need to do it a bit separate, so it helps. We always say, now that we just established the team, it's very important for us to be completely integrated into Daimler, but at the same time, we are a bit separated. To innovate, you need to have the space to innovate. So, it's good that we're separate, but that was not the reason why we did it. We did it because digital is very strong, and the Israel startup scene in Israel, all of it today is extremely... smart mobility focused. Thank you very much. A short question. I arrived a little bit late, so you might have said that in your talk. How many startups in Israel do succeed? What's the percentage and which startups are successful? How many startups in Israel succeed? I think I'll turn over this question to Eyal. About 10% are successful in the rest of the... So, is there any stratification? Can you say it's more internet industries that succeed, whereas restaurants are not successful? Can you say something about that a little bit more? Yeah, the question is actually, is there any stratification? Can you see what type of startups are successful and which are not? One of the interesting factors in Israeli startups is because the local market is tiny. We're about 8.5 million people. Most of the startups things globally from the get-go. So, everyone's thinking about selling to the US, to China, to Europe. In terms of technological trend, it changes over time, depending on the technology. A few years ago, it was big data. So, it really changes over time. Right now, connected vehicles is one of the hottest areas, but it would take us 10 years to know the success factor. So, if you look at venture capital, usually you only know if a fund that invested in startups is successful, 10 years from its inception. So, it really takes a long investment horizon to know if autonomous cars and transportation is going to be a successful sector. So, with your technology, you need strong backup. Is that correct? Yes, definitely. Much longer horizon than an app from 10 years ago. Thank you very much. Maybe I will just add to that that I think that startups, you always see where the focus is. You see innovation comes, and I think there's a very, very strong focus on smart mobility in Israel. And therefore, I think you see many, many more startups in the area of smart mobility, autonomous vehicles in Israel today. I would be interested why the Israeli ecosystem is interested to cooperate with you, because I think Daimler or Mercedes-Benz isn't as big in Israel if you compare it to Google or Facebook. It's not like a really star name, I imagine. So, maybe I'll tell you my experience coming back to Israel. You're right. Google and Facebook are very strong names. But actually, the market perception of Israel was extremely well-perceived for Daimler coming in, you know. And as you remember, I said that the focus of smart mobility in Israel in the startups scene is very, very strong. And so, if you say, okay, this is a focus area for the startups, then, of course, Daimler is a great partner for us. Others in Daimler, so GM was in Israel as the first OEM. They established their site in 2008. They're around, I think, they were around 150 people until, I think, six months ago when they're ramping up to 300. And we were the second OEM coming to Israel. There was a lot of excitement. Now, I think you see also other OEMs really considering coming in, and there are also other OEMs like Renault, but also maybe our more direct competition is coming in. And this is the questions I showed you earlier about me being interviewed just as much as I'm interviewing and how they perceive me was exactly what you were talking about. But I think, I really think that we have enough to offer. And if you watch Daimler's leadership 2020 culture change, I think the company is really going through an amazing transformation. And the question in Israel is always, can I make an impact? And if the answer to that is yes, you can make an impact, then it's an amazing company to work for. This is the way it's perceived. And you can ask, yeah, Luigi just joined. Yeah. So as far as I understood, you have just started your department. How many people in the future will work there? And how will the department be organized? So we will be ramping up to 25 until 2018, establish results and take it from there. I think what I love about this company is we don't try to grab the entire, Israel has a lot to offer in terms of cybersecurity, AI, big data, tons of different areas, autonomous vehicles, many, many cameras, vision, a lot to offer. There's a lot that we can do, but we wanted to take it in stages. So we will establish first results and then take it from there. And I think you asked something else. The second question was, how will you organize your department? Which structure will you focus on certain topics or will you go by functionalities? So yeah. So we will have right now two strong, let's say, professional legs to our hub. First one is the R&D, where we will really do R&D development in cybersecurity and other, let's say, digital innovation. And then we will have the innovation leg that Eyal is leading, where we will harvest the ecosystem, where we will work with startups, we'll do hackathons, do research university research and so forth. So this is the two areas that we will work in. And then you asked, did we establish some key focus areas? We have. So we have for now, these are the first, we have decided what we're going to start with, deliver results and then take it from there. Good. Any more questions from the audience? Thank you for joining. Enjoy the party later. Thank you. Thank you.
about what does it mean to be up to tomorrow. Do our investments in the right place, hopefully we need to be resourceful and we need to find the market would be too high. So no. But you relatively new, with Bosch for autonomous we work with the best and with our enemies for actually move to Israel as a conscious choice to digital vehicle. Israel is very strong when it digital is very strong, and the Israel startup see what type of startups are successful and hackathons, do research university research and