Financial Freedom 101

The Hedgehog Concept is mainly used by companies and CEOs to determine what they need to do to take their company from good to great! In channeling their inner hedgehogs people like Steve Jobs, Jeff Bezos, and Bill Gates were able to make great companies. When a company stagnates the Hedgehog Concept always them to identify three important factors for being successful. The concept revolves around simple three questions that are answered individually and then brought together to achieve one. Although it is a strong tool for companies, it can also be used for self-evaluation.

The Fox

The concept stems from a Greek parable “The fox knows many things, but the hedgehog knows one big thing”. What this means is in the real world most people are like foxes. They are good at a couple things. The fox is good at hunting rabbits, squirrels, mice, and birds. But if it was great at hunting rabbits wouldn’t it always hunt rabbits? A fox does not specialize in hunting one animal just like most people throughout their careers find it difficult to specialize in one specific field.

The Hedgehog

On the contrary, the hedgehog is great at one thing. Defense. With its spikey back, it can fend off the likes of a fox every time. It is amazing at protecting itself. When a company or individual can determine the one attribute that they are amazing at and stick to it, success will follow.

The Hedgehog Concept

So the three questions are first, what are you deeply passionate about? Second, what can you be the best at? Lastly, what drives your economic engine? It is important to answer each one of these questions separately. Do not think there has to be a theme among the three questions. I personally answered each question on a separate sheet of paper one at a time.

You are really trying to narrow your thoughts here. You might be good at 5 things and get by doing 3 things. The hedgehog concept wants you to drop the 3 getting-by things, and figure out which of the 5 things you are good at you can be the best at!

What are you Deeply Passionate about?

For this question, you want to ask yourself what in your life drives you to work voluntarily? What activity gets you up in the morning because you are excited? Is it doing yoga? Or cooking a delicious dinner? What about driving cars? Do you like researching companies? How about working with your hands to build something? Does educating younger people excite you? If you answered yes to any of these then maybe being a carpenter, stockbroker, chef, yoga instructor, or teacher is what you are really passionate about. Not the job you are currently working to earn a paycheck.

What can you be the Best at?

Here you need to look inside yourself. Be honest with yourself and ask what are you really good at and can become the best at. Organization? Time-Management? Networking? Selling Products? Coding? Real Estate? Construction? Website Development? What are you genetically encoded for? It can be anything! But you have to think you can be the best in the world at it. If you don’t think you can be number one at it, then it is not your Hedgehog Concept.

What drives your Economic Engine?

Lastly, what drives you monetarily? Are you results-driven? Do you want to see live data? Does seeing happy customers drive you? Does a big paycheck excite you? How about building a brand? In this question try finding all the ways you can make money.

Real-World Examples

Jeff Bezos’s Amazon made a huge success because they made customer support a vital part of their business model. Pre-Amazon, online shopping was held back by poor customer support. It was difficult to return items when online shopping. Bezos and Amazon fixed this issue by making it as simple as printing a return stocker and taping it on the box! They knew they could be the best in customer support and achieved it! Now he is worth billions…

Bill Gates and the company believed they could be the best software developer in the market. With tools like Word, PowerPoint, and Excel in the early 2000s, they focused on perfecting their craft to later produce a trillion-dollar company.

Each big-name brand started with one focus which was its bread and butter. No one in the market sector could compete with them. The Hedgehog Concept is designed to help a company or individual find their bread and butter!

Personal Experience

Moving to personal examples I just recently filled out a Hedgehog Concept. I am looking for a career change and was using this concept to help pinpoint where my next career move should be. Over two days I contemplated each question and answered each in an extensive manner. I noticed my mind was too sprawled out. Mentally I wanted a little bit of everything. Stocks, Sustainability, Venture Capitalists, Real Estate, Start-ups, Small Companies, Large Companies, this, that, it was just too much.

What helped me was something a family member told me. Ask yourself where you want to end up in life. I want to work for myself and manage real estate. OKAY GREAT (See diagram above). Now, what experiences/lessons/failures do you need to have to reach that goal. That answer should narrow your search for your next step in life.

Check out the book that brought light to the Hedgehog concept below and the corresponding website here!