Michael Eisenberg on Israeli civic society, the India-Middle East Corridor replacing BRICS, and why he's bearish on Europe

air. On air. Um you can feel free to introduce yourself. Sit down. Tell us about yourself. Um Let's uh tell everyone uh who you are, what'd you do? Michael Eisenberg, general partner at Olive in Tel Aviv before that at Benchmark. Yeah. Four years ago. It was just a dinner in the Library of Congress Rotunda. Yeah.

So, was it was the dinner, you know, more intimate? Was it more, you know, what was your read on it then? What's your read on it now? This is overwhelming. Yeah. Yeah. It's big. You know, for a guy like me, it's like super overwhelming. Yeah. You know, I used to be on the other side of the microphone.

I have my own podcast invested. I interview other people. This is kind of fun. It's fun. It's fun. Well, uh Yeah. What what what what are you trying to get out of the event? Uh are you specifically looking for founders that you could potentially invest in here? I'm not. So we invest only in Israel. Okay.

But you come to Hillen Valley. Why? Because politics the intersection of geopolitics and technology is perhaps the most important issue of our time and where there's enormous opportunity. Maybe a little cap by the size of in general the defense establishment. The M&A side won't be as big as Google, Cisco, Microsoft.

Sure. Yeah.

So is there an angle here where you kind of act as like a part of your value ad as a venture capitalist is a de facto lobbyist for the until they can afford a lobbyist where I'm not a lobbyist but personally but you can make introductions I can make this is a relationship at the first hill and valley you know Senator Cotton was here JD Vans now the vice president of United States was here last year was here and you know this is where people here in a minute you should have Joshua for he's coming on in 20 minutes he's a great guy the You and I will be together in Tel Aviv next week also.

Oh, so we're having Sean Magcguire jump on in just a minute. He told us about how Talpo has become a pipeline for great founders. Can you give us more insight there? Have you backed any Talpo founders? Yes, we've backed many top 30 years. Well, yeah. Yeah. What is Telpo?

Why is it such a hot bed for entrepreneurial talent? Everybody knows about 8200 unit, which is like the cyber unit of the Israeli military. Topio is a unique program. Takes about 30 kids a year who are the best and the brightest. The Israeli genius goes there. It's a 10-year program. Wow.

In which you get a couple of degrees along the way. Okay. And then you get a budget. Yeah. To go do a big weapons program or military program. And so we give these 22, 23-y old kids the most immense responsibility. They grow up, they deliver, and they know how to build essentially companies. That's awesome. In a box.

Can you give some examples of uh alums that you think are worth digging into or understanding their history? Uh, sure. So, we backed a company called OneStep. It's actually three top guys, which is like hitting the jackpot. There we go. um by Torman.

They just took they just took this little telephone device and turned it into what's called a gate lab. Okay. And it turns out that how you walk is predictive of your health. Oh, interesting. In many ways, it's like a blood test. Literally like a blood test.

I can tell if you're going to have dementia or Alzheimer's, by the way, whether your hip and knee replacement works. Interesting. That's what I mean. Only guys who are literally rocket scientists could turn the phone into what's called a gate lab and use it to measure everything. That's one example there.

What's the business model? sell to the customer directly or vend that into Apple Health or something like that? No, they're actually selling to uh uh facilities that do rehab. Sure. For elderly people or people have hip and knee replacements. They sold to medical device guys like Zimmer. He's growing extremely fast.

That's great. And you know, incredible genius. And you know, then there are others. There's a guy out there, you might have met him, Michael Calfman, who's working with a bunch of guys who come out of that place. I think met him last night.

Talk about uh collaboration with this group here and and and your companies back in Israel. What what is that like? The interesting thing about Israel is there's no local market, right? 10 million citizens doesn't make much of a market. 400 million on the other hand, Sure. Sure. is big.

And so if you assume that US defense spending is going to go up. Yeah. Um this is a good place to do defense technology. We've backed a bunch of companies in the area. A company called Ore, which makes uh uh rocket fuel and uh explosives. Got it.

Uh using natural and biological means uh and uh another company called chemistry company. It is like it is actually a chemistry company using biological means a specialty chemicals company. Our co-investor there is standard industries on WR Grace. Yeah.

Um and uh we've backed a company that's in the kinetic defense area and another company called Dream. You may have heard it was founded by Sebastian Kurtz the former chancellor of Austria and Shal Julio that is doing national level AI protection. It's one of the fastest growing companies I think in the world right now.

Uh what's your uh what's your read on whether or not we are really we're clearly in an AI race. uh what what is uh is that something that can be won or is it like any other industry where it's just sort of a perpetual race?

There's there's no ending, you know, do you have a thesis around uh do you agree or disagree with Bill Gurley? I agree with Bill Gurley. Okay. Yeah. My former partner eventually Bill Gurley. I I I agree with Bill Gurley. It's an infinite game, but I'm not sure the question is framed right. Sure.

So AI is going to impact just about everything we do. It's a super accelerant of of many things. I think the question becomes because the clock gets sped up. Yeah. Um you could fall really far behind in every iterative game you play, right?

If you're not at the head of the game, you know, if you're not winning winning the game, it's not that you win in order to defeat the other person. You win in order to stay ahead. One of the burn a bunch of books.

One of the core thesis of the books is that the civic society runs on iOS and AI and runs really quickly and government runs on the fax machine still and that's inevitably creates friction and the civil society pulls ahead and it creates tension with the government.

I think that's part of the loss of faith in institutions. So if you don't accelerate the clock on absolutely everything, what you just have is unending friction, society kind of collapses on itself. So you need to stay ahead of the race in order for your society actually to be healthy.

And then also to deter others uh from doing other things. You know, as science accelerates with AI and weapons development with AI, it can be troubling. I I gave a talk in Abu Dhabi about this about a year and three months ago where I showed that there's correlation. We can argue whether there's causality.

I think there is between the increase in compute power and cyber attacks and interest in uh in bioweapon attacks online. I think it's not an accident. There's agents of chaos in the world and now they have access to super tools y like AI.

So if we don't stay ahead these people get emboldened and you can't kind of keep in a box. Uh what you know there's a lot of talk uh today around just efficiency in government specifically around like payments things like that.

Uh does the US have uh anything that we can learn from Israel in terms of do you think Israel's done a better job in terms of like modernizing the way that governments actually run or is it still fax machines all the way down? The really interesting thing about Israel is not the government.

Uh what Israel has is the most incredible civic society on the planet. If you look at what happened October 7th, the government was absent, but the civilians all turned up. Yeah. They turned up to evacuate people, turn up with their own weapons and their own cars and took care of business of what needed to be done.

And in fact, the evacuees were taken care of mostly by civilians. The government didn't turn up. And what I think Israel is a model for the 21st century, which is it's almost impossible for government to catch up on so many of these technology things. It's just going to take them a while. Yeah.

What we're doing now is devolving this to citizens to take over more control of the economy, emergency response, uh, and everything else. I I chair the largest volunteer organization in Israel. There's actually wildfires going on right now in Israel. They've been set on fire by terrorists.

There's 20 places that the fires are. This my civilian organization that I chair called the the new guardians is out there with thousands of volunteers stopping the fire the fires and stopping people from lighting more.

And so the lesson from Israeli society is how you leverage technology in civic society to take over more capabilities from the government. Now you can't defend people like that. That still requires uh the government and policing should be done by the government.

Um, but the Israeli government, I think, is like every government right now, which is there's lower uh trust in institutions. They're still very, very slow. Yeah. Um, and they're kind of coming around to this very late, but because of the force of the public, I think it'll get there faster than most other governments.

Yeah, that makes sense. Uh, what what do you think about uh different geos to invest in? Uh Benchmark was obviously in the news for the Manis investment, which is kind of controversial, but you could see a world where, hey, they're just great founders.

They want to get out and so, you know, American capitalism is like the path out. Uh are there more are there other geos that are you think are interesting or more on this continuum of like east versus west narrative? I'm pretty bearish on Europe. Yeah.

Uh broadly, I've said that on Harris Debings podcast and other places. Um I'm super bullish on the US and Israel. Sure. And you went on the on the king of Europe's spirit list. That's right. I did. Brutal. By the way, I should say I'm an LP of Harry's too.

But but you know, he he feels the need to disprove me right now when you know was super bearish on Europe. Going all in. He's all in. He's all in. He's dying on the hill. He's got to make it work. He's got to make it. It's good to be young and ambitious like Harry is and do it.

I I think there's interesting things going on in pockets, but still Mecca is It's by the way, it's not the United States per se. It's Silicon Valley and New York and maybe Austin and a little bit of Miami and Tel Aviv. It's cities around the world and maybe there London.

I think the most interesting thing going on right now is actually in Abu Dhabi and and Dubai. They become a massive magnet for the talent fleeing Russia and Ukraine. They made it really easy to come there. More and more companies are setting up facilities here. Just here. I met three people who've set up in Abu Dhabi.

Yeah. And so, well, they have a lot of incentives, too. I've heard that they'll basically say free space, free energy. There's a lot of, you know, they'll they'll basically like massively reduce the cost, my understanding of operating things like manufacturing, any type of like hard tech, you know, projects.

They're also really good at building big projects and they have lowc cost energy. So, they're going to build big data centers. They're building big data centers for the US giants and Microsoft has a partnership, you know, in MGX with Mubala and with OB.

I think there's interesting things going on in the Emirates, uh, more broadly. not as much, you know, entrepreneurship coming out of there, but places where you can kind of build infrastructure and deploy. And I I think the really really big question facing the West right now and I'm a fan of Alex.

I think we're here to defend the West is how do we create a secure and resilient supply chain? Yeah. For the infrastructure we need to stay ahead in AI and not just in AI, AI, robotics, uh defense, whatever the next generation of bio is and chemicals as we've talked about. Yeah.

That requires real infrastructure and a secure supply chain for the west to win and we got to focus on that. Yeah. Yeah. Great point. Uh what is your postmortem on the bricks narrative that uh I I don't know I grew up with uh Brazil, Russia, India, China.

Uh Goldman was calling these the next major markets and the way that's bifurcated. If you invested in Russia and China, it's really rough but Brazil and India they've developed but not fully.

uh are are there still like jump balls on the geopolitical uh like uh chess board that can be pulled towards like the broader definition of the west even if India is not in what we traditionally think of as the west. It's funny you should ask this question.

I was just remarking to somebody a couple days ago there was bricks and now there's IMC. What's that? Ah the India Middle East corridor. Okay. So we assume that India would go with Brazil, China and Russia.

But if you look at China and Russia in particular on some level, Brazil, these aren't real democracies in India is is a democracy. I think it turns out by the way if you invest in a non-democracy, you actually don't own what you think you own. They take it from you.

You don't you know free markets as uh Freeman said, you know, create uh free societies. Yes. It turns out the opposite is also true. If you don't have a free society, you actually don't have a free market. You don't own what you think you own. And I never thought India was actually a part of that.

But this thing, what's the corridor? India Middle East corridor. Yep.

It's the alternative to the belt and road initiative and this you know people understand this find you geopolitical point so Turkey which is kind of on the side now Turkey Pakistan which is now waring with India are part of the belt and road initiative the China initiative that China has initiated to try to get to Europe via land India Middle East corridor is alternative that where you go via India via the sea to Dubai Abu Dhabi you cross through you know Saudi Arabia Jordan Israel and out to the Mediterranean y and then in there and this I think is a deals.

I think bricks fell apart because uh democracy doesn't belong with these people.

But I think there's a giant opportunity for the west and for the United States if we can bring India on board and make them a core part of the supply chain across the Middle East and into Israel and Europe looking into it and more and more companies testing the waters. But these things take more time.

It takes a long time. These things take more time than anyone believes. The supply chain created in Shenzen and China and Taiwan is 30 years in the making. It's not going to happen overnight. Yep. Well, thank you so much for coming on. Sean McGuire's out there waiting. Can you go grab him?

I'm like a warm up for Shawn McGuire. That's like, you know, I mean, life goal unlocked. Yeah, there we go. Opening for great. Yeah, great to meet you. Thanks so much for stopping by. Um, fantastic. I think Jordy has to send a uh a tweet or post uh promoting the feed. We're going to