MaRS Library Hype cycle
A hype cycle is an analytical tool developed by IT research firm, Gartner Inc. They succinctly describe it as“a graphic representation of the maturity, adoption and business application of specific technologies.” As illustrated below, the hype cycle plots the progression (“phases”) as a new technology moves from being received initially with over-enthusiasm or hype, to being met with period of disillusionment when over-expectations are not met, to finally being viewed realistically as the marketplace recognizes its true relevance as a product.
Hype cycles depict how and when technologies move beyond the hype, offer customer value and reach mainstream market segments. The practical application of a hype cycle is to help technology buyers to distinguish hype from reality so they can identify when a technology is ready for adoption. While the tool was first developed in 1995, it wasn’t until 1999 that it gained the most attention. This occurred when Gartner published a hype cycle charting the progression of e-business that correctly anticipated the burst of the dot-com bubble the following spring.
Hype cycles have five phases, and Gartner describes them as follows:
- Technology Trigger: The first phase of a hype cycle is the”technology trigger” or breakthrough, product launch or other event that generates significant press and interest.
- Peak of Inflated Expectations: Here, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. Some applications of a technology may succeed, but typically there are more failures.
- Trough of Disillusionment: Technologies enter the”trough of disillusionment” because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.
- Slope of Enlightenment: Although the press may have stopped covering the technology, some businesses continue through the”slope of enlightenment” and experiment to understand the benefits and practical application of the technology.
- Plateau of Productivity: A technology reaches the”plateau of productivity” as the benefits of it become widely demonstrated and accepted. Here the technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.
Technology start-ups and the hype cycle
Technology start-ups in the ICT sector need to understand the hype cycle for two distinct reasons:
- The hype cycle offers start-ups a window that can help them recognize market dynamics for emerging technologies. It is especially important for start-ups to appreciate the fact that technology breakthroughs are followed by a lot of attention, which doesn’t always translate into immediate business.
- At some stage, your start-up might find itself and your technology category included in a Gartner hype cycle. Because of the increased visibility that this will offer in the marketplace, you must be ready to explain your placement on the hype cycle to your customers.
The hype cycle vs. the technology adoption lifecycle
In principle, the technology adoption lifecycle describes the behaviour of a market towards a particular technology. Instead of focusing on the market, the hype cycle is focused on the maturing of the technology itself. According to Gartner analyst Mark Raskino, the hype cycle is a tool for technology buyers and the technology adoption lifecycle is a tool for technology vendors; yet one has to remember that technology and market development are intertwined.
The Trough of Disillusionment can be interpreted as The Chasm, and the Slope of Enlightenment can be understood as the Niche Markets/Early Mainstream Markets. When thinking about a whole product strategy, it is easy to see how the tools are linked: to cross the Chasm, you have to start building a value chain. It is the emergence of this value chain that allows a technology to move up the Slope of Enlightenment.
Gartner. Understanding Hype Cycles. Retrieved May 19, 2009, from http://www..gartner.com/pages/story.php.id.8795.s.8.jsp.
Gartner. Gartner’s 2006 Emerging Technologies Hype Cycle Highlights Key Technology Themes. Retrieved May 19, 2009, from http://www.gartner..com/it/page.jsp?id=495475.
Raskino, M.& Fenn, J. (2008). Mastering the Hype-Cycle.Boston: Harvard Business Press.
Image from Understanding Hype Cycles.
- Investors and preferred convertible stock: Liquidation preference and dividends.
- Buyer and user personas: Use in product development, sales and marketing.
- How to prepare for your business presentation with investors.
- Partnerships as a market development strategy for startups.
- Follow-on financing: When to seek additional funding and how.