Imagine: How Creativity Works (26 page)

In recent years, Vardi has taken a leading role in building the Israeli tech sector, transforming an initial burst of enthusiasm — the sale of ICQ made the front page of every Israeli newspaper — into a genuine Silicon Valley rival. He has started cell phone companies, search engines, social networking sites, and solar-power plants. And yet, as Vardi notes, this success has been achieved despite seemingly impossible odds. Just think of the obstacles: Israel exists on an arid stretch of land surrounded on all sides by hostile neighbors. The nation spends approximately 10 percent of its GDP on defense, which is the highest level among developed nations. It has few natural resources, lurches from war to war, and has absorbed more than 1.5 million immigrants in the last twenty years.

But Israel has turned all of these drawbacks into assets. Consider the small size of the country in terms of both its land and population. “The tiny scale of this country is extremely important,” Vardi says. “In Israel, the social graph is very simple: everybody knows everybody. And if you don’t know somebody, then they are probably only one degree removed. You can find them very easily.” (It also helps that Israel is the second-densest country in the developed world, with more than 91 percent of people living in urban areas.) The intimacy of Israeli social networks means that ideas circulate at an incredibly fast pace; the knowledge spillovers are nonstop. Just look at Vardi, who insists that he learns about all of his start-ups from casual conversations with other people. “What typically happens is a friend tells me about his friend, who has this interesting idea,” he says. “And so then I talk to some other people, who also think the idea is interesting. And maybe they talk to some other people, and before you know it we’ve got a funding plan. That’s how the process always works.”

Vardi is referring to a very particular kind of social connection. It’s long been clear that the vast majority of people have somewhere between four and seven close friends, or what sociologists refer to as strong ties. This number is remarkably stable across all cultures and demographics, suggesting that we’re inherently limited when it comes to cultivating deep relationships. After all, there’s only so much time in the day for telephone chats and get-togethers. However, the same uniformity doesn’t apply to weak ties or those people seen only on occasion. The number of weak ties varies dramatically from person to person and can be deeply influenced by culture and place. Some people, like Yossi Vardi, cultivate a vast network of acquaintances; at one point, I watched as Vardi interrupted a cell phone conversation to take a call on his landline and then put both on hold to send a quick email. He attends nearly fifty conferences every year in an array of different subjects and rarely turns down a social invitation. “Most of my day is about making new connections,” Vardi says. “The more the better.”

At first, it’s easy to dismiss such casual relationships. Why should the number of acquaintances matter? These are people we rarely see; their influence seems insignificant. Nevertheless, weak ties turn out to be an essential ingredient of creativity, which is why those cities that encourage an expanded social circle, such as Tel Aviv and San Jose, are more innovative. Martin Ruef, a sociologist at Princeton, has investigated the importance of these contacts for individual entrepreneurs. He began by interviewing 766 graduates of the Stanford Business School, all of whom had gone on to start their own businesses. Ruef was most interested in the structure of their social networks. He noticed that most entrepreneurs had a relatively limited circle of contacts. They might have plenty of good friends, but all of their friends came from the same place and were interested in the same things. Instead of forming weak ties with people at different companies, they invested in relationships with people who were close by. This isn’t particularly surprising: We all naturally self-segregate, choosing to spend time with people who are just like ourselves.
(Sociologists refer to this failing as the self-similarity principle. In 2007, Paul Ingram and Michael Morris conducted a study of business executives at Columbia University. The executives were invited to a cocktail mixer, where they were encouraged to network with new people. Not surprisingly, the vast majority of executives at the event said their primary goal was to meet “as many different as people as possible” and “expand their social network.” Unfortunately, that’s not what happened. By surreptitiously monitoring the participants with electronic devices, Ingram and Morris were able to track every conversation. What they found was that people tended to interact with others who were most like them, so that investment bankers chatted with other investment bankers, and marketers talked with other marketers, and accountants interacted with other accountants. Instead of interacting with new people, the students at the mixer made small talk with those from similar backgrounds; the smallness of their social world got reinforced.)

But not every entrepreneur had such a confining social network. In fact, Ruef discovered a small subset of businesspeople who cultivated a large number of weak ties and unexpected friendships. Instead of hanging out with colleagues and close friends, these entrepreneurs had social networks that were expansive and diverse, full of surprising interactions and “informational entropy.” (A system has entropy when it’s defined by the presence of disorder — think of a crowded sidewalk.) These businesspeople chatted with acquaintances at conferences and struck up conversations with random strangers at their local coffee places. In other words, they lived like Yossi Vardi, constantly exposed to a wide range of people.
(According to Ingram and Morris, the only successful networker at the event was the bartender.)

There is something unsettling about Ruef’s data. We think of entrepreneurs, after all, as creative individuals. If someone has a brilliant idea for a new company, we assume that he or she is inherently more creative than the rest of us. This is why we idolize people like Bill Gates and Richard Branson and Oprah Winfrey. But Ruef’s analysis suggests that this focus on the singular misses the real story of innovation. The most creative ideas, it turns out, don’t occur when we’re alone. Rather, they emerge from our social circles, from collections of acquaintances who inspire novel thoughts. Sometimes, the most important people in life are the people we barely know.

The unexpected strength of weak ties also helps to explain the Israeli tech boom. As Vardi notes, the connectedness of the country accelerates the pace of innovation: when strangers trade knowledge, new knowledge is created. For instance, after ICQ was purchased by AOL, there was an influx of young graduates into the tech space; everybody was chasing the same lucrative dream. “All of a sudden, it seemed like every kid with even the faintest idea for an Internet company was starting one,” Vardi says. “And even though most of these new ideas weren’t very good, and most of these companies failed very quickly, the competition was great for everybody. There was this big surge of new people, which allowed us to build a high-tech community in a very short period of time. And that meant we could all start learning from each other.” This was the real virtue of ICQ: it transformed a small clump of strong ties into a sprawling network of weak ones.

Of course, Israel isn’t the only place trying to attract venture-capital investment. Cities have been attempting to replicate the  Silicon Valley model for decades, striving (often in vain) to create the kind of region from which companies like Google and Apple emerged. So how did Israel — this tiny nation with a long list of disadvantages — become such a vibrant high-tech incubator? What is it about the weak ties of Tel Aviv that make its entrepreneurs such a consistent source of new ideas?

One of Vardi’s answers is surprising: the military. Because Israel is an extremely small country, it’s never been able to maintain a large standing army. As a result, the Israel Defense Forces (IDF) are entirely dependent on their reserve units; most Israeli men under the age of forty-five are required to serve several weeks a year.

While many Israelis complain about the mandatory service — it’s long been seen as a drag on economic productivity — there’s a growing recognition that it’s also a crucial source of innovation. The reason, Vardi says, is straightforward: the reserve forces maintain a vast network of weak ties across the country, since the soldiers reacquaint themselves with everyone else in their unit every year. Instead of just hanging out with close friends, they are forced to mingle with all sorts of different people. “It’s like a college reunion that goes on for a month,” Vardi says. “You meet people, you schmooze. Reserve duty is a big part of what helps keep this place feeling so tiny.” This socializing helps explain how a single unit in the Israel Defense Forces could give rise to three successful tech companies: ICQ, Check Point Software, and NICE Systems.

The larger point is that Israel’s social networks have come to resemble those in the most effective urban neighborhoods. What Jane Jacobs celebrated about Hudson Street is also true of Tel Aviv. These places have found a way to maximize their human capital, forcing their inhabitants to mingle.

5.

In the late 1990s, when the dot-com fever was at its peak, many technology enthusiasts predicted that cities would soon become obsolete, a relic of the analog age. After all, with an online world of email and video chats, why should we sacrifice our quality of life to live amid strangers? Cheap bandwidth would mean the end of expensive rents; the zeros and ones hurtling across the fiber-optic cables would supply each of us with all of our human interactions.

And yet this pessimistic forecast for cities has not come to pass. In fact, the data suggests that the opposite has occurred: cities have become more valuable than ever. 
(Just look at the continued vitality of Silicon Valley. One might expect high-tech companies to embrace the possibility of remote communication, but this hasn’t happened. Instead, the tech sector continues to concentrate itself in a single California valley, despite the high rents. That’s because the best innovators in the world know that the best way to interact is face to face.)
 Edward Glaeser, an economist at Harvard, has studied the effects of the Internet on face-to-face exchanges. Interestingly, he’s found that the online world has increased the returns of such conversations, at least as measured by metrics such as rents in urban areas and attendance at industry conferences. “Modern life has made being smart and creative even more important,” Glaeser says. “And how do we get smart? Even in this age of technology, we still get smart being around other smart people. That’s why we pay a fortune to live in Manhattan or Cambridge or Silicon Valley. The printing press didn’t make cities less important. And the Internet won’t either.” Take a study led by researchers at the University of Michigan. They brought several groups of people together and had them play a difficult cooperation game. Then they gave the exact same task to a different set of groups, except these people had to communicate electronically, using e-mail and instant messaging.

The groups meeting in person quickly solved the problem, finding clever ways to cooperate. The electronic groups, in contrast, struggled to interact. Although they exchanged roughly equivalent amounts of information, these groups were missing the surprising exchanges that occur when people meet in the flesh. As a result, their problem remained impossible.

A similar lesson emerges from a 2010 study by Isaac Kohane, a researcher at Harvard Medical School. Kohane’s question was simple: How does physical proximity affect the quality of scientific research? To find out, he analyzed more than thirty-five thousand peer-reviewed papers, mapping the precise location of every single coauthor. (According to Kohane, this task took a “small army of undergraduates” several years to complete.) Once the data was amassed, the correlation became clear: when coauthors were located closer together, their papers tended to be of significantly higher quality, as measured by the number of subsequent citations. In fact, the best research was consistently produced when scientists were working within ten meters of one another, while the worst papers tended to emerge from collaborators located a kilometer or more apart. “If you want people to work together effectively, these findings reinforce the need to create architectures and facilities that support frequent physical interactions,” Kohane says. In other words, our most important new ideas don’t arrive on a screen. Rather, they emerge from idle conversation, from too many scientists sharing the same space.

This doesn’t mean we should give up on the Internet. Instead, the limitations of technology should inspire us to rethink the nature of our online interactions. The first thing we have to ensure is that our new digital contacts don’t detract from our real connections, from the analog conversations of the physical world. Twitter has its uses, but it’s no substitute for the ballet of Hudson Street, just as the weak ties of Facebook cannot replace the weak ties of life. While the Internet has evolved primarily to maximize efficiency and make it as easy as possible to find information, it needs to do a better job of increasing serendipity. Sometimes, the most important idea is the one we don’t even know we need.

And this returns us to the enduring power of the metropolis, a place that constantly introduces us to the unexpected and curious.