On the day Raphael Ouzan finished five years of service in an elite intelligence unit, he decided to start his own company. The night after his release from the IDF (Zahal) he met with a good friend, Yaron Samid, and together they resolved to build their own startup.

Start-Up Army? The IDF and Israel’s Hi-Tech Industry

Raphael Ouzan (right) and Yaron Samid (left), 'Billguard' Founders

In the first days they had only five employees—two from the same intelligence unit as Ouzan. Last year their company—BillGuard—raised 3 million dollars in funding and won second place in the startup competition Techcrunch Disrupt.

BillGuard is, essentially, antivirus for your credit card. The software scans credit card transactions and finds technical errors or fraudulent deals. This is accomplished with a unique algorithm which scans forums, social networks and websites, and analyzes transactions for “suspicious” behavior.

What’s the link between credit card protection and the IDF (Zahal)? Raphael Ouzan, now BillGuard’s CTO explains:

“I learned a lot about this type of work from my military service. We would sit together every few hours and do a ‘situational assessment’—analyzing where we are and what we want going forward. That really helps you learn how to work.”

So how did the army service help going forward? And why were two of the first five workers from the same unit as you?

“The army is great for building character. It builds you as an innovator, and you get experience in very interesting areas… In both startups and the army there’s always uncertainty, always new and unpredictable challenges. Things change and they change fast. In my army course I met the best and most amazing people I ever knew.”

The future looks promising. BillGuard won Best of Show at Finovate 2011 and business is booming. But one hit isn’t enough for Ouzan–always the entrepreneur, he’s already working on another project aimed at helping the Israeli industry:

Mission Intelligence is a project I started about 18 months ago. It’s meant to bring people from all over the world into tech units in the IDF (Zahal). The army trains for excellence and I want to promote that. That’s what my project is all about.”

Start-Up Army? The IDF and Israel’s Hi-Tech Industry

Homepage of the 'Mission Intelligence' website

So what’s the plan?

“Potential candidates start with 10 months training abroad, each in their native homeland. They intern in startups. Only the best will make it into the IDF (Zahal). Those with the brightest, most creative minds will enlist. No university can give you experience like the IDF (Zahal). What I want, with this project, is for certain units in the IDF (Zahal) to be the Stanford University of Israel in 5 years.”

Raphael is not Israeli born—at 16, he made Aliyah from France, and has stayed in Israel ever since. ”Israel is such a small, young country. Even Israelis forget how young this country is,” he says, and adds:

“Israel is the real adventure, because every little thing here makes a change. Open a tent on the street and you make a difference. I guess I just wanted to be a part of this history.”