Biological bet hedging is nature's method of diversification.
- A plant could try to go "all in" this year and get all of its seeds to germinate. But if this year's environment is not optimal, all of the plant's seeds could die. Instead of this risky endeavor, the plant could have half of its seeds germinate this year, and half germinate next year, thus increasing chances of survival.
- A bird may produce eggs of different sizes, each size being optimal for one potential environment of the offspring. This means that some of the offspring will be at a disadvantage, but as a collective, it is unlikely none will survive.
The purpose of bet hedging isn't to maximize short-term success, but long-term survival. If an individual doesn't hedge their bets, one unexpected and disastrous event (black swan event) could wipe out all of its offspring, potentially ruining chances of survival for that individual's genes.
If you're into investing, you probably see parallels here.