Archive for September, 2008

What’s Next? Gartner Hype Cycle

September 4, 2008

I wrote an article on “Gartner Hype Cycle Chart” for the one of venture forums in Seoul early this year. Gartner Chart is a fairly simple but effective tool to predict what’s next. Tech entrepreneurs and venture capitalists often sit down and analyze what’s going to happen next and whether a new technology (or industry) is a hype or not. Nonetheless, we are not futurists but we just want to know what the stage of industry we are currently at and try to look at a big picture.

Almost every industry has shown similar growth pattern in the past like the chart shows above. When a new market opportunity (or technology) emerges, usually it starts with a huge “1) infrastructure investment” with many bells and whistles from media. Following upon that, “2) new business vehicle or platform” on that newly built infrastructure comes after. After major platform and service is up and running, “3) market niche opportunity” comes along by collaborating dominant players. However, market gets more fragmented. “4) failing or aggregating” of a niche opportunity happens at the final stage and market becomes more stable and organically grow.

“Technology trigger” and “peak of inflated expectations” from the Gartner Hype Cycle Chart is when  adventurous entrepreneurs and capitalists are most active and also when competition is most high. If we come along after those stages, then we easily expect that we may buy cheap to build a profitable business, but rarely build momentum to sell it with a high profit. Everyone likes home-run but we live our lives mostly with many hit-and-run potentials so we need to learn how to sustain ourselves during high-risk-low-return phase while we diligently strech our hands to grab a next big thing.