The Hype Cycle - Predict Tech-Hype & Make Smart Decisions
16th Feb 2017 17:56 AnshumanTweet
Are you worried that the technology you are basing your Start-Up on may not give expected returns? Ever wondered how many more Start-Ups might be working on the same concept as you are? To give you an insight for these queries and help businesses make smarter decisions, the Hype Cycle for Emerging Technologies has been developed by Gartner, Inc.
(Image: Gartner, Inc.)
The Gartner Hype Cycle is, ironically, not a cycle; instead, it is a graph that represents the possible market viability and applicability of new technologies, their maturation and adoption status, and how they may provide new opportunities for growth. In simple terms, it depicts the lifecycle of a concept, providing an insight how a technological concept may develop over time in order to enable smart decision-making regarding its implementation and deployment.
The graph consists of the following parts:
Technology Trigger- The first time any innovative idea lands into the market with a disruptive effect on the contemporary market, creating a significant din in the media. This is basically the phase just after the R&D when daring start-ups venture into the market with “truly disruptive technology”. The concepts start becoming popular due to the media coverage. The start-ups should take proper measures to market their product in this stage of the cycle.
Peak of Inflated Expectations- This is the phase when, as the name suggests, the expectations from the product maxes out. The publicity and marketing produce over-estimation of returns. The popularity of the concept is also at a maximum when the multitude of institutions try to explore the prospects of the concept. There may be some successful applications, but there are generally more failures. This is the time for the start-ups to sell the idea to investors and VCs (Venture Capitalists).
Trough of Disillusionment- In this phase, interest in the concepts gets reduced as expectations are not met. Experiments and implementations fail to deliver satisfactory results. The media also does not give much coverage to the topic. Investments continue only for those start-ups who could improve their product to satisfy the expectations of early adopters.
Slope of Enlightenment- The true applicability of the technology is understood in this phase. Enterprises that have kept developing the technologies understand how it could benefit them. Pilots may be funded by some enterprises. Newer generation products are also developed. This is when the true potential of the technology is realized.
Plateau of Productivity- It is the phase when the technology becomes mainstream; it becomes widely demonstrated and accepted. The technology becomes increasingly stable, which attracts investors. The technology’s market applicability starts to pay off. The utilization of innovative product continues to increase. A steady growth of the company becomes possible.
(Image: A General MOOC Hype Cycle)
A Case Study- ‘I am Rich’:
On 5th August 2008, an app developer Armin Heinrich managed to sell a dumb iOS app for US$999 per unit. There were 8 downloads on the first day of its release before Apple managed to remove it on the next day. The app would, in fact, just display a red ruby on the screen, as a symbol of showing that you are really rich; accompanied with the mantra:
“I am rich
I deserv it
I am good,
healthy & successful.”
The app developer did not, however, scam anybody. The app description clearly mentioned that by purchasing the app, the customers are reminded that they are rich every time they look at their phone since they purchased a completely useless app just because it echoes with your status. He was very honest with the purpose of the app. So why did people go and buy this app?
The answer lies in the Hype Cycle. The eight units of this app that were purchased, occurred during the ‘peak of inflated expectations’ phase of the Hype Cycle. This may be surprising, but the hype surrounding a technology plays a crucial role in important strategic planning, like marketing decisions, R&D projects, etc. The ‘I am Rich’ app made 8000 bucks the first day with possibly the worst marketing for such an app.
The predictions from the hype cycle would provide a key insight for start-up ventures. Proper utilization of the hype cycle would lead to answering questions like Should you make an early move? Is a moderate approach appropriate? Should you wait for further maturation? The answers obviously depend on the appetite for risk in the startups, and the application of technology that one seeks.
In this era of rapid technological development, it becomes difficult for entrepreneurs to keep abreast with the development of technologies. The hype cycle provides us with a hint to discern the real applicability of the technology from the great expectations. Smart utilization of the cycle could result in gargantuan returns with minimal efforts.
May the Hype be with you.