What makes Jacob run
He got rich, then quit the business world and became a writer and social activist, where he's also succeeding in a big way. Jacob Burak talks about some of the things that money just can't buy
If Jacob Burak says that clinical depression is good for business, you could do worse than to listen to him. He's not referring to any old business, but to investments in the capital market. Burak has some experience there; he knows a thing or two about investments. When it comes to depression, he seems to be less of an expert. But that never stopped him from investing successfully - using mainly other people's money. For a long time, Burak was a star on Israeli newspapers' financial pages. His name was synonymous with success and business acumen. Founder of Evergreen Canada-Israel Investments, a venture capital fund, he managed it for 18 years. Evergreen had huge investment turnovers of more than NIS 2 billion, mostly in high-tech.
The stock market instead of Prozac?
"The greatest destroyer of value in the capital market is self-confidence, which is a quality that depressives do not possess," says Burak, 63. "They know they are not in control of the situation. Depression is an effective tool against distraction. It turns off all the brain stimuli that disrupt the ability to concentrate, neutralizes noises that affect discriminatory capability and allows you to focus on the main thing. People with a high level of self-confidence undervalue others. You know, when someone buys a stock share there is also someone on the other side who is selling it; why devalue him? Why should you think he doesn't know why he is selling? Depressives have a better take on reality; they are not prone to overrating luck. Women are better investors than men, because they are less sure of themselves."
Burak devotes an entire chapter to the positive correlation between depression and sound investments in his new book, "Why Kamikaze Pilots Wear Helmets" (Hebrew ). It's Burak's third published book in the past four years, following "Do Chimpanzees Dream of Retirement?" (English-language edition, 2010 ) and "Noise" (Hebrew ). The transition from reports about him on the economic pages to reviews of his works in the book section was gradual. Its genesis lies in a chance and seemingly unimportant event. Burak wrote some reflections on the value of trust in business and its erosion over the years, and sent it to the monthly magazine The Marker. The editors published the piece and asked him to write another for the following issue. Burak took to the idea enthusiastically: behind the tough businessman lurked an ardent novice author.
"I wrote when I was with Evergreen, too," Burak says, "and I did all kinds of unconventional things. When Evergreen was a public company, the managers' reports to the stock market were written in a personal tone of voice. We wanted to enrich the annual meetings of our investors and turn them into a true experience. For one gathering, which was held in Paris, we flew in Stephen Hawking from England. I begged him to speak in a popular way, but he delivered a speech suitable for the Swedish Academy of Sciences. Even so, you could hear the buzzing of a lone mosquito in the next room. Everyone was entranced, out of appreciation and respect for the display of human grit and talent."
Burak became a regular columnist for The Marker, after which the road to writing three books (so far ) was relatively short. He discovered the autonomy that writing bestows and grew dizzy with what he describes as its intoxicating power, which possesses energies just as satisfying as the rush that's generated by closing a successful business deal. The end result of the process - Burak insists that it was a process and not some sudden caprice - was that he left Evergreen in 2005 and devoted himself to writing, social activism and other pleasures.
"It took three years after I retired before I was able to insert 'writer' on the landing card for England. At first I wrote 'businessman,' then 'retiree.' In both cases the immigration officials were indifferent, but since I started to call myself a writer they sometimes ask me what I write about, and that gives me a good feeling."Listening with three ears
Burak's books encompass everything that's human. He seeks nothing less than to fathom the complexity of contemporary humanity. He writes about the connections between business, psychology and human frailties such as revenge, envy, love, truth and lies, riches and happiness, success and failure. About the self-evident from an unexpected vantage point. And maybe chimpanzees really do think about retirement?
Burak backs up his discussions by citing learned studies. His writing is lucid and precise and comes from a personal perspective; it reflects high intelligence that attests to extensive knowledge in a large number of fields.
Burak the writer does not miss Burak the businessman, not even when he hears about good deals that once would have sent his blood pressure soaring. "It just doesn't do it for me anymore and hasn't for a long time," he says. "I have lost all my acumen. I no longer know the names. I am mostly interested in global economic trends, but that's all. I have no nostalgia for that world and I don't look back." But there is one thing that still does it for him. Even now. The names businessmen give their companies. That's the most important thing in business, he says. Evergreen was conceived on a trans-Atlantic trip. "I was listening to music on one of those interminable flights," he recalls. "It was the soundtrack of 'Blade Runner,' a film that became one of the tests you had to pass to work at Evergreen. Anyone who saw it fewer than five times wasn't hired. It was bewitching music by Vangelis. I found out that it had been recorded in Evergreen Studios, based in California. I drew the inspiration for a lot of things on flights. You dare more when you're in the air."
Inspiration didn't always come on wings. Burak always had a personal relationship with the names he gave his companies, stemming from private associations. Examples are Rosebud, Arctic Echo and Rare Ore. Burak has an amazingly simple solution for young entrepreneurs who are looking for names: the horse races in England. "Instead of racking your brains and flying thousands of kilometers on dozens of flights, you open an English newspaper and find a treasure trove of names that are products of thought and love."
Burak was born in Cyprus, to which his Polish-born parents were exiled by the British when they tried to enter Palestine. His father had been married before the war; his wife and a child perished in the Holocaust. He served in the Red Army and thus survived. Burak's mother fled with her twin sister to Uzbekistan and managed an orphanage for Jewish children there during the war. His parents met in Germany on their way to Palestine and were married. Their first home in Israel was a one-room flat in an abandoned house in Jaffa, where the washroom and the kitchen were shared by a number of families. The family moved to Holon when Jacob was six.
"It was an incredible upgrade," he recalls. "My neighbor was Pinchas Zukerman. The kids in the neighborhood played marbles, but he didn't know how to play, and anyway he wasn't allowed to go downstairs, because he had to protect his fingers. With my own eyes I saw his path to international fame being paved. He studied with private teachers from an early age. His father was a musician, and as sometimes happens with entrepreneurs, children continue their parents' lives."
Burak's father, Baruch, who died more than 20 years ago, was a photographer; his family had had a photo shop and studio in Poland. In Israel he worked for the Jewish Agency and later in a bank connected to that institution. His mother, Sarah, now 89, taught educationally challenged children and is the author of 120 textbooks and workbooks. Before her retirement she was the principal of Mesilot School in Bat Yam. Jacob was the favorite of the teachers and the girls in his Holon high school. One of his classmates is the poet and writer Shlomit Cohen Asif.
"Half the girls were in love with the literature teacher and the other half with Burak," Asif says. "He was the handsomest boy in our grade. He possessed a certain charm and he had a fantastic ability to listen. You had the feeling that he was capable of listening with three ears. Everyone was certain he would go into psychology or philosophy. We were very surprised that he chose business. Even before the word 'excellence' was coined [in Hebrew], he was excellent because of his innate abilities. He was a wonderful student. You felt that he thought differently from others and looked at the world differently. We didn't call him by any of the usual nicknames for Yaakov [Jacob], but simply Burak, because we discerned some sort of inner force in the name. We spent a lot of time at his house, where his mother observed us and later used the material for the workbooks she wrote."
After high school, Burak entered the Israel Defense Forces' officer candidate academic studies program, studying industrial engineering and management at the Technion before entering the navy. After his service he founded an independent consulting company. In 1983, he advised the doctors' union on how to manage the organizational aspect of the six-month strike they waged. The doctors achieved what they wanted, and after the strike Burak's name, as both a tactician and a strategist, was whispered to Shimon Peres ahead of the 1984 elections as someone who could take charge of the organizational details for election day itself. Peres did not lead the Labor Alignment to a defeat, but he didn't win, either, entering a power-sharing rotation agreement with Likud leader Yitzhak Shamir.
Burak then took his first steps along the fragile bridge that linked Israel with world Jewry and eventually with future projects of Evergreen. Peres appointed him to head an economic task force to develop and encourage Jewish businessmen from abroad to get involved in Israel. "Tzvi Tzur was the chairman and I was the director general," Burak says, referring to a former IDF chief of staff. "We brought people and working groups here. The idea was to translate their good will from charity into business. I liked it as a challenge, as an Israeli, as a businessman and as a Jew, and it gave me the inspiration to establish a venture capital fund."Big brother syndrome
In 1984, Burak attended a 14-week managerial development program at Harvard. It was, he says, "intellectual basic training," and adds, "After a month you start to hover above, you see things below in a kind of purple hue and you feel on top of the world. That's the most riveting and most enriching way to acquire knowledge. It was my single most important experience. The course imbued me with the confidence to do things I didn't know I had in me."
In 1987, when Evergreen was founded, Israel was a venture-capital wasteland. "I didn't even know how to say 'venture capital,'" Burak recalls. "All I wanted was not to lose the money of those who had entrusted me with it. I was so fearful that I didn't make a single investment the first year. I didn't yet know that I wanted to get into technology. The first investment was in a family-owned jewelry company. After that we invested in a medical equipment company, we had a piece of [the mass-circulation newspaper] Yedioth Ahronoth and we bought Carmel Carpets from the receiver."
One intriguing encounter in the early days was with the late Reuven Hecht, owner of Dagan flour mills in Haifa. Burak tried to persuade Hecht to invest in Evergreen. Hecht, a staunch Revisionist who had succeeded in realizing the Zionist vision without investing in such funds, was reluctant. "But he effused good will and asked a little about my family history; he wanted to know when we had come to Israel. I told him and he asked which ship my parents were on. The Ben Hecht, I told him [the businessman and the writer were not related]. 'Are you sure?' he asked. 'Yes, from Hamburg,' I replied, and that was the end of the conversation. He bent over to his assistant and said, in Yiddish, 'Ein milyon.'
"That wiped me out. I called my mother. She told me that when they were ready to leave for Israel, an uncle told them that there happened to be a ship in the harbor. At the time, ships bore a political identity, and this one belonged to the Revisionists. My parents had no ties with the group, but it was clear to Hecht that he had been given the privilege of helping old friends. That taught me that when people have good will, they will use the flimsiest pretext to act. It was an instructive lesson. Business is people, and people are their weaknesses. If everyone were logical, not one share would move. The reasons why an investor decides to sell or buy a share are largely emotional."
Burak married his high-school sweetheart, Ada, now a Paris-based businesswoman who owns rental apartments. They have two children. Asaf, 40, lives in New York and develops computer games that have social aims. He has developed a simulation game for the Israeli-Palestinian conflict called PeaceMaker. Liri, 35, studied film and psychology and is now a teacher of the Alexander Method. Burak has four grandchildren.
After he and Ada were divorced he married Nehama Karpol, a psychologist who is CEO of Mashabei Enosh, one of the biggest worker placement companies in Israel.
One of the questions that has intrigued Burak as a writer is whether entrepreneurs are born or made, and what the connection is, if any, between entrepreneurship and the order of birth. Burak, an only son, has often wondered what his life would have been like if he had siblings. According to studies, he says, presidents, prime ministers and Supreme Court justices are for the most part firstborn, while the great rebels in science and the arts are almost never firstborn.
"Frank Sulloway, who is at bottom a Darwinist researcher, said that eldest children are born into territory and are comfortable with authority and with the status quo, so they are achievement-oriented, zealous, emotionally intensive and protect their territory very aggressively. Their strategy is dominance. Siblings battle for attention, a deficit resource, so younger children have to develop a strategy of cooperation and look for new fields of interest. They are ready to take more risks and become entrepreneurs. The eldest go for an individual sport, the younger ones do bungee jumping and play team sports."
Burak applies this approach, for example, to the vote that sealed the fate of Louis XVI of France. If his lawyer had understood a thing or two about the significance of the order of birth and had replaced one of the second-born members of the National Assembly, the king's life might have been spared. "No one has researched the order of the birth of the 721 members of the National Assembly who took part in the vote," Burak says. "The struggle for the king's head was decided by a lone vote, and if the king's lawyer had requested, for technical reasons, to replace one of the assembly members, the king might still be with us."
Why do you think the eldest favored him?
"The eldest are usually conservative in outlook. The younger ones are more rebellious. A younger sibling has a 7.3 times better chance of producing an innovative theory than an eldest child.
Similarly, Burak says, father-child relations go a long way toward determining whether the son will become an entrepreneur or the president of the United States. "Most of the entrepreneurs I know have a problem with paternal authority, and that affects their entrepreneurial proclivities. To break away from their father they rebel, develop dominance and become their own parents. Without intending to, the dominant father sets a high bar for the son, and psychologically it is no simple thing for the son to transcend it. Many times he forgoes the contest with the father altogether. I ask an entrepreneur who wants me to invest in him what his father did and about the order of the siblings' birth. I need to know whether he has already passed the stage of the contest with the father, because then I take one less risk. But a young person who is just out of university and whose father is a major general in the army still has some coping to do."
As an only son, you should be conservative in character.
"I am conservative. Courage and conservatism are not opposites. My conceptions of risk may differ from those of other people, but I am not an adventurer and in general I am very optimistic. If you tell me that Iran is now deploying to attack, I will find something positive in that."
Doesn't conservatism neutralize boldness?
"It's a matter of balance. I would say that the crucial elements that propel entrepreneurship are optimism and lack of confidence that stems from a deep emotional scar, from an inner wound that people hope to heal through business practice. What's crucial is the style with which you harness those two elements to your initiatives."
What is your wound?
"I seized autonomy at a very early age and understood that I could get along on my own."Exploiting every moment
What kind of entrepreneur would you not do business with?
"If I were to discover while interviewing someone that he was in it for the money, I would keep my distance from him."
Is money obscene?
"I think that what drives most entrepreneurs is the desire to leave a mark, to be true emissaries in the war against finality. We are the only species fated to be aware of our finality. No other creature is forced to cope with such an awful conflict, and we deal with by dual means: by looking for distractions and by leaving a mark, which I believe is the better solution."
Are you preoccupied with this subject?
"The awareness of finality is with me all the time. I will not allow a quarter of an hour of waiting for someone or something to pass emptily. I am very conscious of the fact that we do not have much time. The conclusion from that knowledge is that we must exploit every moment. We all live with a sense of eternity, but have no idea what to do on a rainy Saturday afternoon."
Burak is a rare type of businessman. It's not surprising that he, like those chimpanzees, also thought about retiring. He has enough money to live out his life comfortably and he decided to get out of the rat race. He would not waste his remaining time on making money, but would start to enjoy the money he had already made. The conditions ripened, and in 2005 Burak and his partner, Ofer Neeman, transferred the management of Evergreen to the younger partners.
"We did not make the transfer in one fell swoop, but gradually," he says. "I prepared for the process over a decade. From my point of view, the alternative - not to go on making investors or companies happy my whole life - had great allure. Someone asked me what it's like to retire rich. I replied that in our culture it's harder to retire than to be rich."
In Western culture, retirement is a difficult psychological process, Burak says, and it always comes as a surprise. People don't really believe that one day it will happen. "When you meet someone socially, the first thing you ask is what he does. That's our primary ID card. I think that if you leave business and devote yourself to one of your hobbies with the same intensiveness, you fulfill your achievement-oriented character. Those who don't plan for this stage in life intelligently suffer a great deal. It's not easy to develop reading and listening habits at the age of 50 or 60."
Burak and Karpol are now almost pensioners. From their very handsome home, with its ocean view, they look down at Tel Aviv from above. They travel a great deal and collect selected artwork for their collection. The collection does not have a unifying theme, nor do they collect for investment purposes; the works they acquire derive from personal caprice tempered by private associations. A case in point is the original photo they have from the set of the film "Death in Venice."
"I am fond of the story by Thomas Mann and I also liked the film," Burak says. "The photograph is a very personal association. I bought it in a London gallery."
The collection contains many Old Masters but little Israeli art. Burak bought a relief of an illustration for a book by Samuel Taylor Coleridge from an art dealer in Holland just after he wrote an article in which he referred to "The Rime of the Ancient Mariner."
"I quoted the line about 'a sadder and a wiser man' and I noted that depressives are better investors. Then, at a fair in Holland, I see this relief by the French artist Gustave Dore, which was used to illustrate Coleridge's book - so how could I not buy it?"
Burak reads a lot, listens to music, goes to the theater and the cinema, engages in sports (he runs 10 kilometers twice a week, swims, and plays tennis and golf ), devotes a great deal of time and money to social and voluntary activity, and gives lectures. The fees for the talks and the book royalties are transferred as donations to not-for-profit associations in which he is involved: Midot, which assesses and rates nonprofit organizations in Israel, of which he is the CEO; and Round-up Israel, whose aim, according to its website, is to allow people "to round up all the odd sums of money on their everyday credit card transactions and donate the small difference to a cause or charity of their choice." He has few friends. "I don't like masses other than in small doses, and without too much noise," he says.Happiness in the third age
Burak's happiness curve is not directly related to his wealth curve, but he is tired of justifying his wealth at every opportunity. "You have to understand the difference between success and happiness," he explains. "Success is obtaining what you want and happiness is wanting what you obtained, and that's a huge difference."
Isn't that too narrow a viewpoint? Because if you are satisfied with what you obtained you won't aspire to obtain more.
"Assuming, that is, that to obtain more things is good. There are insights that came to me through doing, and with maturity. The happiness curve in the second half of life is different from the first half. The experience of happiness starts to decline in one's thirties, probably because of the children, though it's not politically correct to say that. The downside reaches its peak in men at the age of 40, and then a rise begins, and if you're healthy you experience the peak of happiness again at the age of 60, 70. Because, by then either we have obtained what we wanted or have reconciled ourselves to the fact that we will obtain no more - and that has nothing to do with the amount of money we have. The important things in life are experiences, not objects."
It's easy enough for someone with money to say that money is not important.
"There's a logical flaw in the form of that statement. I am not taking issue with people who lack the basic commodities. I am talking only about the prevalent misconception in Western culture. I think that the people best suited to talk about the connection between money and happiness are those who have money, because they at least have been there and know what it's like. One of the great eroders of happiness is the belief that money can influence your happiness."
What does exert an influence?
"Physical activity, sexual activity - preferably with someone you love - human ties with friends and family; sleep is more important than your salary, the TV has to be turned off. A collection of experiences. In the end, we will remember the experiences, not the assets."
A person with no money will not be tempted to leave his job in midlife in order to realize a deeply felt wish. You and he are talking about two different things.
"That's true, but there is something taken for granted in your argument that helps you avoid coping with the big question of what you do and how you do it, under the pretext of the daily battle of existence. Maybe the practical solution is to work a little less and divert some of the time to doing what's important to you. That usually involves great inner fortitude."
What difficulty is entailed in change?
"The difficulty of leaving our comfort zone - and it's impossible to develop without leaving the comfort zone. Very slowly, stepping very cautiously, you move into a place you are not familiar with: that is the place from which you develop. That is the only risk an entrepreneur takes. To be in an unfamiliar place, to acquire proficiency, to rise on the learning curve, to stand in front of an audience of people you don't know. Psychology and business aren't so far apart."
In the mid-1990s, Burak riled a great many people in Israel. Evergreen went public in 1993 and raised NIS 33 million from institutional investors in return for NIS 66.30 a share. In 1998, when the market crashed and share prices plummeted, the managers of Evergreen decided to buy back the shares from the public and erase the company from the stock exchange. The stumbling blocks were two institutional investors, PIA and Psagot, which held Evergreen shares. They claimed that the price offered by Evergreen, NIS 38.50 a share, was too low. Burak and his partners responded by announcing capital consolidation, leaving PIA, Psagot and the public with fragments of shares in which they were unable to trade. The deal was completed at the end of 1998; the company was sold back to its owners at a far lower price than the original purchase offer.
The capital market viewed this as an unfair trick. Burak says he found himself in an oppressive regulatory quagmire, with a Canadian company that had to comply with the regulations of Canada, the Israel Securities Authority, the Tel Aviv Stock Exchange and the Bank of Israel (foreign currency controls were still in existence at the time ).
"The Bank of Israel was apprehensive that Israelis would bypass the strict regulations and exploit the possibility of investing shekels in a foreign public company such as Evergreen, which in turn would invest the money abroad," Burak explains. "In fact," he continues, "the Evergreen flotation in 1993 was made possible only after a special permit was received from the Bank of Israel. In time, some of the regulatory restrictions became intolerable in terms of business flexibility, and Evergreen filed a petition in the High Court of Justice against the Bank of Israel. The court declined to intervene and rejected our request to allow us to invest abroad, thereby creating a situation in which we were unable to raise money in the local stock market. Accordingly, we decided to end trading in the company by making a purchase offer to the company's shareholders. The capital market of the 1990s was apparently unsuited to the odd business creature of a Canadian company being traded on the stock exchange in Israel. Nowadays, of course, foreign companies are courted so they will register for trading on the local bourse and the foreign currency controls have also been lifted, but we left the enjoyment of those welcome changes to others."
Why do kamikaze pilots wear helmets?
"Not all the suicide missions are successful, but besides that, the Japanese pilots, like the Germans, did not dream of violating the proper order of things, even when they embarked on a mission entailing certain death. That order had to be preserved at any price."WRenaissance enigma Writer Haim Beer on his friend Jacob Burak
Burak's book "Do Chimpanzees Dream of Retirement?" has been translated into English, Italian, Dutch, Portuguese, Japanese, Korean and Chinese. Nevertheless, after it was published, Burak took a course in creative writing given by the author Haim Beer at Beit Ariela in Tel Aviv. Since then the two have become friends.
"One day he showed me a text he had written about a painting," Beer recalls. "It was astonishing: No one in the group understood what he was after. I had the feeling that it was falling on deaf ears, so I explained to them how I read it. Usually I stand aside and don't intervene, but in this case I couldn't help myself.
"Since then we have met from time to time, but he has remained an enigma to me. He fulfilled the bourgeois dream of making money, but he lives more correctly than many people and he knows what to do with the money. I have a very high regard for him. He wants to find out what makes the world tick from the vantage point of an English nobleman and businessman. With admirable modesty and elegance. He is not a sentimentalist but at the same time is attentive to the world with extraordinary curiosity. It's rare to meet someone who is so inquisitive, more even than the academics I know, each of whom is inquisitive in his own narrow field.
"He is something like a Renaissance man. He is interested in science, sociology, social psychology. There is nothing in him of what I discern in nouveau riche people and he does not engage in conspicuous consumption. I often ask myself how I would live if I were not preoccupied with making a living, and I don't have an answer. He is endowed with directness and cleanness, which is amazing. He wears clothes that look like regular attire, and only if you look closely do you see they were bought in good shops. He doesn't pull out expensive pens or wear a luxury watch, and there is something very generous about him both emotionally and publicly. Most of his time is devoted to not-for-profit associations. He has none of the shticks of the rich. It's really lovely. The word is mensch."