I recently had the pleasure of meeting Nicolas Colin. I’ve been an admirer of his writing in the past, and we had a delightful conversation at one of my favorite breakfast spots in London. For those of you who don’t know, Nicolas is a co-founder of The Family, an early-stage investment firm started in Paris and now operating in London and Berlin.
He is also the author a new book Hedge: A Greater Safety Net for the Entrepreneurial Age, which I’m happy to have completed just this week.
Hedge hits three important notes for me: it is meticulously researched (527 references! 😍), very well-written, and has a point of view that stands out from the others. Nicholas has a broad intellectual range, and his mastery of many topics spanning technology, economics, politics, history, and culture is on full display throughout the book—not to mention an impressive native-like command of the English language (he is French).
Colin’s main message can be roughly distilled into the following (though he goes much deeper—and broader—in the book):
We are undergoing a foundational techno-economic paradigm shift as the age of ubiquitous computing and networks transitions from the installation phase (tinkering and laying the infrastructure) to the deployment phase (widespread absorption and disruption) (à la Carlota Perez).
With this great opportunity comes great dislocation. But, we have been here before. Today is not unlike the transition seen about one hundred years ago during the era of mass production and the automobile, where huge disruptions occurred in labor and product markets. Populism was on the rise and the existing institutions needed to adapt (quickly and radically) to address these growing challenges.
They did. And what ultimately formed out of that transition was the Great Safety Net (1.0)—made possible through an alliance between business, government, and labor—which created a more stable socio-economic and political environment, allowing households and businesses to comfortably prosper simultaneously.
The problem today is that the Great Safety Net 1.0 was slowly dismantled during the Dark Ages (the era of financialization and corporatism), which left many workers and households marginalized and desperate for answers. What’s remaining of our existing institutions is not adequate to deal with the fundamentally different challenges faced in an era of constant innovation and relentless instability.
The answer, says Colin, is to reimagine our institutions and usher in a new era of shared prosperity under the Great Safety Net 2.0. Given the enormity of a challenge that simultaneously requires scale and quality, those best positioned to bring forward solutions are not governments alone—but entrepreneurs and technology companies, who make a living doing these things by harnessing available tools and obsessing over customer satisfaction.
And here he drives that message home at the end:
It’s easy enough to draw the Great Safety Net 2.0 on the back of a napkin. But once the overall concept becomes clear, the challenge isn’t to build the entire macro mechanism in just one round. Rather it is to invent solutions to an infinity of simple problems in fields as diverse as lifelong training, occupational licensing, housing, transportation, consumer finance, insurance, the tax system, collective bargaining, and many others.
Entrepreneurs have a lot to contribute in that regard. Their obsession is not with expressing ideas but with implementing them. Many good entrepreneurs are unable to easily explain what they do because their primary focus is on building things. Why not harness that unrivaled capacity to build things and have entrepreneurs build the Great Safety Net 2.0 one piece at a time?
It doesn’t mean that governments have no role to play—quite the contrary. But my overall impression is that we’ve witnessed a sharp reversal in who has the capacity to explore, discover, and deliver. In the past, only governments could break the constraints and pull it off at a large scale. Now it looks like governments (at least in the West) are stuck in bureaucratic inertia and partisan gridlock at the very moment when entrepreneurs allied with the multitude [an ocean of individuals empowered by mobile computing devices and high-speed connectivity] are best positioned to harness the power of ubiquitous computing and networks.
Another way to paraphrase this is that we face a myriad of socio-economic and human health challenges in the coming decades, and the virtual scale of these problems—along with the powerful toolkit being unleashed by today’s emerging digital technologies—perfectly situates digitally-enabled entrepreneurs, allied with government, business, and labor/households/consumers, as the centerpiece of unlocking this opportunity.
To look at this a different way, Hedge could be interpreted as a plea for entrepreneurs to begin tackling these problems now, rather than chasing more lucrative, short-term wins in other less impactful domains (apps, etc.). It is a call for the technology community to take the mantle, to shape and transform our institutional environment. Not only is this the right thing to do, it’s the only thing to do—our most important sector is facing a backlash from many different corners; it is its own problem and its own solution. It must save itself and our society in the process.
I was recently reminded of this by Congressman Jim Himes (D-CT), who leads the centrist New Democrat Coalition in the U.S. House of Representatives. My panel, and the panel after mine, involved a group of economists and venture capitalists arguing for a more competitive innovation policy environment in America, particularly as entrepreneurship and venture capital are globalizing at a rapid pace. While I stand by that assertion, and I’m know the Congressman agrees, he reminded us that unless all of this technology and innovation starts paying dividends for the masses, it will be significantly limited by the political headwinds that are already well underway.
He’s right about that. And that’s really what Hedge is about. I encourage anyone who’s interested in startups, technology, economics, public policy, or the future of democracy (yes, that’s what’s at stake here too), to read this book. I also encourage you to connect with Nicolas and follow his writings. He’s way out ahead on this stuff.
