The Bay Area (Cont’d)
European Straits #95
Dear all,
My apologies for sending this issue on Thursday rather than Wednesday, I’ve had quite a lot on my plate these past few days. I got back from my trip to the Bay Area and then had to travel to Paris to participate in the GovTech Summit, organized by our friends at PUBLIC, an investment firm dedicated to harnessing the support of entrepreneurs to transform public services (hi Daniel Korski and Alex de Carvalho!).
My contribution to the event was on a panel about the future of the welfare state, along with Tanya Filer of Cambridge University, Reuben Saxon, the founder of FreeUp (a startup, still in stealth mode, that aims at toppling payday loans), Dagur Eggertsson, the mayor of Reykjavik (Iceland), and Paul Duan of Bayes Impact. I’ll share my thoughts on GovTech soon in a Forbes article! In the meantime, here are a few more reflections from my recent trip to the US.
My stay in the Bay Area
Much has been written on entrepreneurial ecosystems: what it takes to make them; how to make them healthier; why Silicon Valley is an ecosystem that works. Yet few attempt to answer the simplest question: What, exactly, is an ecosystem? We all have a feeling of what it is, a generally superficial impression. But if you actually try to turn that feeling into a proper definition, it becomes clear that it’s not a simple exercise.
But let me give it a try. An ecosystem is a social order. It’s structured by relationships, allegiances, rivalries, and a deep sense of belonging and interdependency. Above all, it’s exclusive and insulated. Once you enter the ecosystem, you submit to rules that are different from those in the rest of the world.
Silicon Valley is the ultimate entrepreneurial ecosystem, the one that gave birth to the mightiest tech companies on earth. And the reason why it works so well is that it’s far away, freed from the influences and interferences coming from the rest of the country—and the world.
Every ecosystem has its problems. Ignorance is one, as an ecosystem’s members can be clueless about its history and relatively indifferent to the rest of the world (even if, as Paul Graham once wrote, ignorance is sometimes what makes it possible to come up with radical innovations). And I certainly felt that last week: The backlash against technology may be raging all around the world, yet many people working in the tech industry don’t really feel all that concerned.
That’s especially true for engineers, who are focused on their jobs and live in a very specific bubble. You can tell that policy people, who are constantly dealing with the anger and pressure from the outside world, are struggling to make their non-policy colleagues care about the tech industry’s responsibilities in the global conversation about building new institutions.
In that context, I had to refine my arguments as to why Americans should read my book Hedge. Now there are three reasons that I’m pushing forward. First, we’re living a recurrence of the 1930s, and back then the US was the only Western country that managed to reinvent its Safety Net without having to see their homeland destroyed by World War II—and so maybe they could do it another time! Second, unlike Europe, the US is home to the most thriving tech companies on earth, which means that they have intimate knowledge of the new paradigm and how technology could contribute to building a new Safety Net. Finally, the US is a federated country, which means that they have the institutional flexibility to try new things at the local or state level before eventually expanding what works at the federal level.
As for the content of Hedge, people are predictably more eager to discuss solutions than to hear about the diagnosis—with the notable exception of James Cham, of Bloomberg Beta, who was very interested in my definition of a tech company. I admit to feeling a bit of frustration with the obsession for solutions, because my belief is that the diagnosis matters much more than solutions. Here’s what I wrote to one skeptical friend earlier this year:
Solutions are needed for tactical reasons: if I wrote a book that was only a diagnosis, people would read it and ask “And so, what do you propose?” (And this was, in fact, a question posed even within my team as the book moved forward). So today I see solutions thusly: It’s not the diagnosis that should support the solutions, but rather the solutions that should support the diagnosis. Most suggested solutions will never be implemented or, if they are, will fail to achieve their objective. But they’re useful if they can help convince the reader that the diagnosis is right. This was the spirit with which I wrote the fourth part of the book, with the solutions there to illustrate and amplify my diagnosis, not the other way around. Because I’m 100% convinced that it’s the diagnosis that really matters—and will eventually make an impact if people read the book—whereas most people will forget the solutions in no time.
Finally, as could be expected, the idea that entrepreneurs can tackle the challenges of building the Greater Safety Net resonates well in the Bay Area. It is quite helpful that so many startups nowadays are building products that, if successful, will eventually become bricks of the Great Safety Net 2.0. They go from insurance (Safety Wing) to housing finance (Point and Divvy) to higher education (Lambda School) to streamlining access to food stamps (Propel). I will soon start a series of articles on Medium to discuss the contributions being made by all those entrepreneurs to reinventing the Safety Net. Stay tuned!
After talking about Hedge to so many people in Silicon Valley, sales have started to take off in the US, and we’re now closing in on 1,500 copies. By the way, if you don’t have yours, it’s on sale worldwide on every Amazon website: 🇺🇸US, 🇬🇧UK, 🇫🇷FR, 🇩🇪DE, 🇮🇹IT, 🇪🇸ES.
The next steps
🇮🇱 Next week I’ll be in Israel. If you’re based there, you’re more than welcome to attend one of my talks:
Tel Aviv—On November 20 at 6pm, you can attend a fireside chat about Hedge sponsored by French Tech Israel at Urban Place-Migdal Shalom. You can register here.
Jerusalem—On November 21 at 6:30pm I’ll be chatting with venture capitalist Ben Wiener at WeWork (King George 20). You can find more information here.
🇦🇹 Then the following week I’ll be in Vienna to attend the 10th Global Peter Drucker Forum, in which I’ll participate in a panel about “Should managers be activists?” on November 29 along with Henry Mintzberg and others. You can read more about the Drucker Forum in a —but alas you can’t register anymore because it’s sold out (but there’ll be a livestream!). There’s also a pre-conference on November 28, in which I’ll chair a panel on “Leadership in a Robotics & Artificial Intelligence World”.
🇦🇹 Also in Vienna, on November 27 I’ll be at Pioneers at 5:30pm for a community event alongside Betsy Ziegler, the CEO of global tech incubator 1871, where I’ll discuss some of the ideas developed in Hedge. You can learn more about this event and register by following this link.
New content arising from Hedge
Quite a lot of content has been put online in which you can see or hear me talk about Hedge. Here’s a selection:
My friend Ross Sheil has created the Scaling Startups podcast. I was invited for episode #6 about “Backing Europe’s most ambitious entrepreneurs”. You can listen to our discussion here.
A few weeks back I was at The Family’s office in Berlin for a fireside chat with Stripe’s Sandro Gianella. Here’s the video on YouTube.
[In French] Here's a presentation of Hedge at The Family in Paris, followed by a panel with three entrepreneurs from our portfolio: click here to watch it on YouTube.
Finally, don’t miss this comprehensive and supportive review of Hedge by economist Ian Hathaway!
Warm regards (from London, UK),
Nicolas