Hedge: The bottom line
Book review of Hedge, A Greater Safety Net for the Entrepreneurial Age by Nicolas Colin: what if our society models and approach to innovation and entrepreneurship were outdated?
Entrepreneurship is a major topic these days. Entrepreneurs are everywhere, but their situation is not always a choice and in many cases, questions arise as to whether (and how) our social systems are efficient at supporting them.
While at some point being a Tech entrepreneur was a trendy thing, nowadays our relationship to tech and innovative companies has shifted. Complexity, perplexity, the words aren’t difficult to find. The question is, how do we move forward?
This book is interesting, well written and very well researched. And you should read it if you are wondering how entrepreneurship is about to turn. Just saying!
Book suggestion: Hedge, A Greater Safety Net for the Entrepreneurial Age by Nicolas Colin.
I recently read Hedge, A Greater Safety Net for the Entrepreneurial Age by Nicolas Colin, and I must say that the book was an unexpected good surprise.
I didn’t buy it. It popped into my mailbox. My father in law sent it to me together with a couple of books he found online. I’d never heard of the title, but he thought I’d be interested so he went for it.
As it turned out, the book arrived at the exact right time for me. I’ve thought about entrepreneurship, business and Impact strategy a lot lately, because of some projects I’ve been working on. And this book provided me with some food for thought that I was not expecting to bump into.
I read the book in no time and got a lot of insights from it. In fact, the narrative and the ideas developed in there resonated a lot with some of the ideas I have been formulating myself.
To keep things simple though, the big idea is this one: if you are interested in finding out how entrepreneurship is doing at the moment, especially from a society perspective, this book will give you some food for thought.
As usual, here is what you get on this page:
- A brief overview of the book (that includes my SMART takes).
- A much more comprehensive commentary of what the book is about, with the author’s main topics explained in detail.
- The book’s main themes, questions, and conclusions in bullet points.
- Why the book was worth my time, why it will be valuable to you, and additional reading suggestions if you are interested in the topic!
Hedge: brief book review (for starters).
There is quite a lot of business books out there, and I regularly write about them on I’ll Make You Think Smart. This time, though, the book I’m about to write about is very different.
Hedge by Nicolas Colin is not a book ON how to do business. It is a book ABOUT the changes which increasingly impact business and entrepreneurship as we know them. And that difference makes it a rather unique book on the market.
A different type of entrepreneurial story.
Said differently? Well, Hedge wasn’t written to help you improve the way you conduct your activities. The purpose of this book is to make you realize that your life as an entrepreneur is changing because the way society sees entrepreneurship is pivoting badly.
The story is interesting because, among other things, the author has a very peculiar profile. Now a Founder of a fund which invests in early-stage entrepreneurs, Nicolas Colin is also a former civil servant in the French Administration. As such, he has a twofold perspective on what entrepreneurship is about.
On the one hand, the business aspect of it and the daily side of things. On the other hand, a very economic and societal perspective, which he has obviously researched extensively.
The result of this mix is interesting. This book is a manifesto for entrepreneurship, grounded on a thorough analysis of the surrounding economic, political and societal context.
Something about the social contract.
Nicolas Colin’s message is both relevant, sharp, and simple if you ask me, and I don’t see how his message wouldn’t resonate with most of us.
For the past decades, the social contract has placed workers under the protection of a “safety net” on which most people have built their lives. Going to school would get you a job in a company. Companies would give you work and a salary. A salary would give you security and the means to buy a house. So forth, and so on.
Except that in recent years things have dramatically changed. In fact, they are getting seriously f*cked up – pardon my French. Companies are letting more and more employees down, for starters. The middle-class’ expectations have become impossible to fulfill, as a result. And the system in which we live is overall failing those who try to innovate through entrepreneurship.
The only question left is therefore this one: where does that leave us?
Something about innovation too.
The Tech & innovation-related aspects of entrepreneurship are the other main elements of the book.
The approach is a little troubling at first, I must say, because entrepreneurship is not only a matter of tech, innovation and unicorns. Nonetheless, the author’s message on the future of entrepreneurship does defend the best interests of all entrepreneurs, whatever their field of expertise.
Entrepreneurship, for Nicolas Colin, relates to the ability to re-invent things instead of merely improving the existing, and while reducing a variety of frictions. The point is interesting because it puts the book on track with the iconic ideas of Schumpeter’s on Creative Destruction – according to which entrepreneurs and their ability to reshuffle the cards are the basis of the capitalist model.
Colin’s point here is not to promote innovation, however. It is to defend it. The difference is subtle, but the two terms (and the related narratives) are very different! Some authors such as Guy Kawasaki, Peter Thiel and Adam Grant have written lots on how to innovate (more on that later). But as I’ve mentioned already Colin rather talks about the place (and the pace) of innovation in modern societies.
How do we innovate when technology and tech firms are increasingly seen as the enemy? How do we support innovators and innovation entrepreneurs? How do we improve institutions and systems to provide them with assistance, instead of merely taxing them?
I’m getting into the details with a much more comprehensive book review below (keep reading or get your copy of the book!), but in short, here is what the book says:
Hedge: The comprehensive book review.
Having drawn the big picture, let me now get into the details. To put things simply, the book focuses on three main discussions.
One is the shift which has progressively taken place in society, and which has led to seriously impacting the model on which our modern expectations are based. Colin calls this the ‘ticking clock’, and that’s a seriously concerning issue.
The second is the related apparition of an “entrepreneurial age” which calls for a new manner of dealing with innovation. In a nutshell? Companies won’t rule forever, the world now belongs to “the multitude” of customers and entrepreneurs out there.
The third develops on the necessity to adapt the system, so as to match a change which is already there. Because just business as usual isn’t going to be enough…
As always, this more comprehensive part of the book review starts with the main themes and questions considered in the book – in bullet points. I’ll then elaborate on the themes more extensively.
By the way, if you are hooked already, the book is available there from Amazon. Now, let’s dig in!
The book in bullet points
Nicolas Colin explores these major themes:
- Technology and the bad perception of tech entrepreneurs nowadays
- The evolution of the social contract in recent times
- The apparition of an “entrepreneurial age” which imposes to reshuffle the cards from a society point of view
He also asks a variety of questions, including:
- How is our society developing?
- Is the social contract as we know it still relevant?
- Are our institutions capable of dealing with recent societal changes?
- What is the role of entrepreneurs, and how can we support them?
Sounds interesting, right? Now, let’s get into the details. Just keep reading!
Hedge – Theme #1: Society shifts worth noticing.
The first big idea developed in Hedge is that the world as we know it is over. When it comes to business anyway…
Tech used to be sexy.
Tech used to be sexy, you know? At some point, working for a multinational company in the tech industry was kind of a dream for the middle-class. Tech was a synonym to success. And by the same token tech was also a social accelerator.
But nowadays tech firms have become suspicious. Google, Amazon, Uber or AirB&B used to have an aura but these big companies are now criticized. They don’t pay tax, they disrupt industries excessively. In sum, concerns are being raised and comments are becoming more than negative.
Tech is also a problem in terms of data protection and privacy. Social networks raise concerns in relation to manipulation and fake news (on this, see my notes on What Happened to Hillary Clinton). Oh, and not to mention the impact of tech and robots on jobs, of course.
Long things short, Nicolas Colin talks about a tech backlash and writes that technology entrepreneurs nowadays must start with apologizing when introducing themselves.
Colin’s argument is that the whole thing is a shame. For him, tech entrepreneurs ought to be considered as synergy-makers and catalysts. Hence this negative perception issue is a waste of energy, resources and change.
Some change is needed.
It flows from this that some change is needed. Especially from an institutional perspective.
For Colin, markets are about permanent transitions. Bubble build up and burst. Change occurs, ending things and creating new dynamics. Yet the social contract we have been living with for the past decades has not changed at all.
While generations have gone to work every morning thinking that the system would provide stability and prosperity for their families, this is not the case anymore. Going to school does not give jobs anymore, jobs are intermittent and companies do not provide any guarantees to workers anymore. In fact, workers now tend to fight big companies and their shareholders. And, to some extent, technology is (perceived as) destroying jobs for the working class.
The author has an interesting way to illustrate his point, as a matter of fact. In his words, “what identifies the middle-class today is less stable than the dream of climbing up the economic ladder and, simultaneously, the nightmare of potentially falling down it“.
The issue is explained extensively, and the argument is both well researched and well written. Colin makes reference to various economists here, which makes the discussion interesting, mind-opening and worth your time, if you ask me.
Hedge – Theme #2: Welcoming an Entrepreneurial Age?.
Having identified the rupture of the historical social contract as the problem, Nicolas Colin then brings a solution: the entrepreneurial age.
Entrepreneurs for yesterday, entrepreneurs for tomorrow.
“Today’s economy is one in which more people embrace entrepreneurship“, he writes before adding that “their ventures also have a higher probability of disappearing in the near future“.
The point, though, is that the way entrepreneurial stories are written is changing dramatically as time goes. For decades, the idea of being an entrepreneur has been linked to technology. Business and innovation were seen as twins, whilst R&D was glorified. By the same token, innovation was mainly the realm of multinational corporations. If you think about it, isn’t Bill Gates regularly cited as being one of the greatest entrepreneurs?
Nowadays, though, things have changed. Entrepreneurs are not those who create the technology but those who find ways to use it to facilitate the lives of others. What matters isn’t to build computers anymore, but to create apps and other useful tools. Not to forget new models.
New difficulties have also emerged, starting with an increasing level of uncertainty which hits directly workers and entrepreneurs alike. As a result, Colin writes, “an entire system seems to be disintegrating”, which leads many to reconsider their own relationship with work.
This trend is significant not just because a change has appeared, but also because the change is impacting lots of people.
Things work differently these days. People are connected and operate as networks. Investors agree to put some cash in businesses which don’t generate money yet. And the customers have become what Colin calls a powerful “multitude” of people.
The argument is interesting and goes as far as saying that, ultimately, the customers not only consume but also end up generating value, because their data can then be fed back into the system. Ultimately, the customers have become the force which counts.
Power changing the rules.
The rules of engagement are changing, as a result. Whilst the Walmart method has focused on lowering prices and salaries to the detriment of the workers, new technology entrepreneurs have bigger shoes to fill.
Beyond price, they must focus on solving problems for ‘the multitude’. They must generate participation and produce life-changing results. But this creates an enormous competition, and therefore entrepreneurs must also face each other on a permanent basis.
Whilst instability has become “the new normal”, Colin writes, we are therefore witnessing “a violent battle for total market domination” which eventually creates a rivalry between old fashioned hierarchy-based companies and modern, Agile innovation-inspired entrepreneurs.
Hence, as Joseph Nye wrote in a very different book on politics, what matters is not the resources you have at your disposal. What really matters is your ability to build a strategy and to exploit your resources in a strategic way to obtain strategic results. This is smart power, really. The missing element, however, is stability for many.
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Hedge – Theme #3: a need to reconsider the system to match new stability expectations.
This leads to Nicolas Colin’s key argument, i.e. that we need a new stability and security mechanism (a new “safety net”) matching new lifestyles.
Connectivity is a big element here for several reasons.
One is that, as Colin writes it, the new entrepreneurial age requires more strategic positioning skills, and since success takes time the system ought to give entrepreneurs some wiggle room to achieve their objectives.
Another is that, with increased connectivity, the world is changing from a political and social perspective as well.
Colin discusses the issue taking the US, Europe, and China as examples, and as previously he provides a very interesting and easy-to-read analysis of the trends.
A new working class.
Another argument is very interesting, i.e. that the working class has changed dramatically.
The argument is twofold here. On the one hand, the old working class has been left behind and still relies on a social contract which is not viable anymore.
On the other hand, a “service class” has appeared, thus redeploying the workforce from a Ford-ist and manufacture-based system into a rather digital and increasingly automated system where, again, the old rules don’t apply anymore.
In other words? Our societies and our institutions need to evolve. They need to allow for more security and they need to support tech entrepreneurs. They need to make work more attractive. And they need to ensure a high level of sustained development.
And all that…
There are various elements in that discussion. For instance… How do we see state intervention? Or, how do we see education and how do we ensure that it remains relevant? How do we make sure that change doesn’t leave anybody behind?
An interesting idea, also, is that the world is shifting from settlers to hunters. For the past centuries and decades, we have worked towards settling and feeling good. Increasingly, however, the necessity to manage on our own has turned us into more mobile hunters and pioneers which therefore have different needs.
Financial models need to be revised accordingly. Insurance models too. And the question becomes the following one: how do we adapt?
The new role of consumers.
The book is well written and researched throughout, but in my opinion, the real (or perhaps the best) bit of analysis comes towards the end, with the argument that the world will now focus on connected individuals with new powers.
Colin describes individuals as a “multitude” with influence. Big companies don’t have the hedge anymore, he argues, because Tech has facilitated large-scale strategy building for most people and businesses.
In fact, Tech has had so much impact that consumers nowadays are much more than consumers. They provide the data that businesses use, and they have become an actor of the value production chain.
What that means is simple: consumers have an influence, on companies, on societies, so much so that “the center of gravity of an entire economy has irreversibly moved”.
Hedge: The main conclusions
Nicolas Colin comes to the following conclusions.
- Our society is changing dramatically and the social contract is not viable anymore.
- Our institutions are not capable of managing the system, and they need to be revised to adapt to the reality of today and tomorrow.
- To this extent, tech entrepreneurs have a massive role to play and they should be supported by a new type of “safety net” built to match modern expectations.
Hedge: Food for thought.
As usual, let’s finish this book review with some food for thought!
Funnily enough, it took me a little while to decide how to categorize this book. Business or society?
The message is simple here. In Hedge, Nicolas Colin calls for a more entrepreneurial model in which hunters and pioneers are supported for their ability to innovate, improve and make things change. He calls for a new societal paradigm and provides an interesting perspective as to what works and what doesn’t. He calls, also, for “radical imagination” and the argument is both sensible and relevant.
There is a lot of context out there. The author refers to a lot of trends, which he explores and explains throughout the book. Interestingly and as I mentioned earlier in this article, Colin’s arguments on the role of entrepreneurs are for instance very much in line with that of Joseph Schumpeter, who elaborated the concept of Creative Destruction. Make sure to read my notes on that book too…
Talking about reading suggestions, those of you interested in books on technological revolutions should particularly read The Fourth Industrial Revolution by Klaus Schwab, or The Rise of Robots by Martin Ford. These two books are diametrically opposed, but they will give you the different aspects of the debate.
In case you are more interested in the ‘how’ aspects of Entrepreneurship, don’t miss book’s such as Rules for Revolutionaries by Guy Kawasaki, or Zero to One by Peter Thiel.
Overall, that makes Hedge a good read which I have found thought-provoking and worth my time. You’ll probably find some good thinking materials in there too!
Your turn now, get the book!
That’s it for now, but don’t stop here! My reading notes are meant to give you a very comprehensive overview of the books I read and some food for thought for the month. That’s why I’ll Make You Think SMART is the Kick-Ass Book Reviews blog after all!
Having said that, the next step for you is to keep digging! Remember, books are a cheap way to learn new things and to benefit from the experience of others at no cost. Not to mention the stories you’ll be able to tell after a good read!
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