Who makes a better entrepreneur – the Hedgehog or the Fox?

HedgehogAndFox

“The fox knows many things but the hedgehog knows one big thing” – Greek poet, Archilocus

Isaiah Berlin wrote an essay in 1953 categorizing people into two types – hedgehogs and foxes. Hedgehogs are people who have one overarching idea and align all of their thinking and their work around this idea. Foxes on the other hand are people who base their thinking and their work on many different ideas that they gather from a wide variety of sources. Isaiah’s essay resulted in a perpetual debate on who is better, the hedgehog or the fox.

Jim Collins in his book Good to Great, claims that the leaders who built ‘Great’ companies are hedgehogs. They all developed their strategy around a singular organizing principle about what their company was good at. They then maintained a fanatical and consistent focus on their singular organizing principle during execution of their strategy over long periods of time through various market and competitive situations. Leaders at the comparison companies on the other hand went in pursuit of growth and profits without latching on to a singular purpose. They jumped at emerging opportunities and reacted to market situations. Based on the financial results of the ‘Great’ companies in his list, he proclaims that hedgehogs are better at building great companies.

Now let us look at the opposite point of view. Philip Tetlock, a professor at Wharton and Berkeley, in his two-decade long study of decision-making, covering experts from a variety of fields, discovered that hedgehogs did not consistently make good decisions even in their own area of expertise. Their singular thesis did not serve them well over the long-term time horizon as outcomes get influenced by factors outside of their singular thesis. On the other hand, foxes stitch together diverse sources of information and continuously adapt to new learning over time. They are not tied to a single explanation or theory. In his view, foxes therefore do better at predicting the future and are successful at adapting to it.

Entrepreneurs have to build sustainable and scalable businesses. They also need to be able to deal with market upheavals, technology disruptions and competitive forces. Some of them have a grand idea and stay incredibly focused on executing that idea with fanatical consistency through thick and thin. This approach requires qualities that a hedgehog would possess in abundance. Others focus on innovating rapidly and iteratively bringing the qualities of interdisciplinary thinking, nimbleness and flexibility to deal with the challenges. These are strengths that are the hallmark of a fox.

If you were a VC who would you bet on, the hedgehog or the fox?

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