After spending a year at Yeshiva University in New York, I took a gap year to study at Yeshivat Har Etzion in Alon Shvut, Israel. The first intifada was still raging when I arrived in 1989 to Gush Etzion, located just south of Jerusalem. One year in the hallowed halls of the Yeshiva led to another and I spent two fruitful years there while the intifada of 1989 – 1990 continued, followed by the first Gulf War of 1991. The Scud missiles that defined the Gulf War stopped raining on Israel on Purim in 1991 as the war ended.
Against this backdrop and approximately one week after Purim 1991, I found myself in a large auditorium room with Rav Yehuda Amital — one of the two heads of the Yeshiva — along with approximately fifteen other young students. Rav Amital founded Yeshivat Har Etzion in a small village called Kfar Etzion, just down the road from Alon Shvut in 1968 following the Six-Day War. Two years later, the institution moved to its current location, and is now housed in a building shaped like a soaring white eagle. Rav Amital, a Holocaust survivor, was a diminutive bespectacled man with a brown and gray beard and a sweet voice that I can still hear in my head; he was a man of few words but had many stories and piercing insights into human nature. He was a masterful Torah scholar, and an orator that moved hearts and minds. He often pointed out that what could be said in one hour could be said in five minutes and believed that the 614th mitzvahwas to be a mensch.
I was a nineteen-year-old year old student thirsty for knowledge, and this was my first relatively intimate encounter with Rav Amital in my eighteen months in the Yeshiva. I mustered the courage and asked Rav Amital a question: “Is there a bigger mitzvah [commandment] of settling the land of Israel for a person to move to an unpopulated place, or is it the same mitzvahif you move to a populated place like Tel Aviv or Jerusalem?” Rav Amital looked squarely at me sitting some ten feet away and said: “It’s all nonsense — set up a factory to employ 10,000 people so they can earn an honest and decent living. That is the biggest mitzvah.”
I was taken by Rabbi Amital’s simple words about the importance of economic independence and of enabling others, especially in Israel, to earn an honest and decent living. It was the first time I had heard a rabbi talk about economics. I decided on the spot to move to Israel, to make aliyah. It took two years to finish my degree back in New York, but in the summer of 1993, I graduated from YU with a degree in Political Science, got married, and moved.
Upon making aliyah, I worked in political consulting and then transitioned into the then-nascent industry called venture capital. For the past twenty-five years, I have been a venture capitalist investing in Israeli technology startups and driven by this mission. Importantly, most of us think primarily about our career and our ability to earn an honest and decent living. Many will move their home and leave their communities for a job opportunity or will spend years in school or nights in the office to get ahead. We are very much homo economicus, driven in large measure by making a living, a good living. Ergo, a country that provides opportunities for earning a good and honest living has a real chance to attract human capital.
I was taken by Rabbi Amital’s simple words about the importance of economic independence and of enabling others, especially in Israel, to earn an honest and decent living.
And so, I took life lessons away from this one brief encounter, which, in large measure changed the direction of my life.
Helping others earn an honest and decent living is a values statement as much as it is an economic imperative. This is critical in the twenty-first century where consumers and businesses are transacting based on values and there is more transparency than ever. Today, values create value. Values-laden businesses will create better brands, better consumer demand, better customer behavior, and better ability to attract the best talent. We live in a digital economy. Inside the bodies that house the brains driving these digital businesses there is a soul. And so I think that values that are at the core of a business (not CSR) are fundamental to how you build companies today.
In our digital economy, services and products that are not principled will ultimately be seen as harmful and will consequently disappear. Thus, a short-term strategy of maximizing profit not only impoverishes future generations but also hurts the suppliers themselves. It also stands to reason that in a more transparent world, in which reputations are judged on social media each day, customers and investors will not be as forgiving toward people who violate their principles
One of my favorite examples is Lemonade, an insurtech company that is revolutionizing the conservative insurance industry. In 2015, I introduced Daniel Schreiber and Shai Wininger, two amazing entrepreneurs with complementary skill sets. They wanted to build values and an aligned business model into the core of the business, which would reduce fraud and dishonesty, an ailment that plagues insurance businesses and raises premiums for everyone. Unlike every other insurance company, Lemonade would not make more money when it turned down customers’ claims in their time of need.
Daniel Schreiber originally hails from England and Shai Wininger from Israel; they set about transforming the global insurance business. Insurance companies do not pop up overnight. In the Western world, the average age of insurance companies is 125 years.
On some level, insurance is a case of tragedy of the commons. We all band together and form a pool of capital that allows us to help each other in times of need. It should be the world’s greatest social good business. However, people cheat. Duke University professor Dan Ariely has often said that if you want to design a business that would not build trust and would instead bring out the worst in people, it would look like a traditional insurance company.
For a biblical perspective on this question, consider the following passage from Genesis/Bereishit: “Jacob resumed his journey and came to the land of the Easterners. There before his eyes was a well in the open. Three flocks of sheep were lying there beside it, for the flocks were watered from that well. The stone on the mouth of the well was large. When all the flocks were gathered there, the stone would be rolled from the mouth of the well and the sheep watered; then the stone would be put back in its place on the mouth of the well” (Genesis 29).
We live in a digital economy. Inside the bodies that house the brains driving these digital businesses there is a soul.
In biblical times (and today), access to water was a social good, one that needed to be available to all. The rock on the well, which required all shepherds to be present to remove it, was the visual representation of an ethical code. This code served to prevent a tragedy of the commons, wherein a few bad actors might take an unfair share, thus raising the risk (and cost) for everyone else.
Insurance companies are the industry most hated by customers, but they are also an industry that everyone needs. Only a team that took a principled approach, changing the supplier-customer relationship from an adversarial to a cooperative one, could find a “rock” large enough that prevented people from cheating. The brilliant minds and principled souls of Lemonade’s team in Tel Aviv and New York answered this challenge and developed an approach that neutralizes the conflict of interest between the company and its customers, thereby creating a true sense of partnership. Beyond the administrative fees, which are fixed as a percentage of the premium — thus synchronizing interests — the balance is transferred to charitable organizations chosen by the customers.
Because Lemonade created an insurance model with common moral values, it is adding customers — who come from all over the world — at a dizzying pace. When I published the Hebrew version of my book in 2019, Lemonade was the fastest growing insurance company in the world and the highest rated for customer satisfaction. As of today, with my publication of The Tree of Life and Prosperity in English, Lemonade has donated over four million dollars to charity on behalf of its members. In the early summer of 2020, Lemonade held an Initial Public Offering on the New York Stock Exchange at the height of the COVID-19 pandemic. The ticker symbol, LMND, serves as living proof that a business approach based on moral principles has significant venture scale investment value. Not only that, but Lemonade is expanding the economic pie. In an era when socioeconomic divides have grown wide, Lemonade is seeking to close the gap with its “Makers Program.” Values do create value as well as more people who can earn an honest and decent living.
Lemonade, Jacob, and the tragedy of the commons are but a few examples of the timeless values influencing companies and technologies. But there are many more, which is why I wrote The Tree of Life and Prosperity—to see if I could provide a framework based on the values of the Book of Genesis to guide, support, and sustain our rapid innovation.
In the 21st century, massive shifts and transformations are accelerating: innovative tech and digitization are disrupting traditional industries and populations are shifting. Developments in AI, Big Data, and Machine Learning are happening fast, and our ethical frameworks are struggling to keep up. The good news is that humanity has faced these challenges before. The characters of the Book of Genesis are just like us. There are entrepreneurs and innovators, family businesses, and industrialists struggling to adapt to modernity, alongside negotiators seeking to preserve their unique identities. And some very wealthy forefathers.
As such, we can examine their lives for lessons about how to turn these challenges into opportunities and stay true to our values. Based on these time-honored principles, we can develop an ethical framework with which to understand today’s chaotic environment, operate and adapt successfully, and build a society and economy based on shared interests, mutual responsibility, and hospitality.
Despite his passing a decade ago, Rav Amital never left me — his imperative drives my investing strategy and life outlook. I try to embody this by supporting trailblazing early-stage Israeli entrepreneurs to build businesses that drive progress and create value with principles at the core. And my assumption is that even if I pass 10,000, he would say, make it 100,000 and make sure it is an honest and decent living.
Michael Eisenberg is Co-founder and Partner at early-stage venture capital fund Aleph, and author of the forthcoming book, The Tree of Life and Prosperity (Wicked Son, August 24). This essay is adapted from the book.