(Originally published at http://www.von.com/blogs/guest/2008/10/on-hype-troughs-and-enlightenment.aspx )
Let me begin with a short story:
"Once upon a time, a technology is announced that generates significant press and industry interest. There’s a period of over-enthusiasm and unrealistic projections, a flurry of well-publicized activity by technology leaders ... some successes, but more failures... The only enterprises making money are conference organizers and magazine publishers. Because the technology doesn’t live up to its over-inflated expectations, it rapidly becomes unfashionable. Media interest wanes, except for a few cautionary tales. However, focused experimentation and hard work by an increasingly diverse range of organizations lead to a true understanding of the technology’s applicability, risks and benefits... Finally, the real-world benefits of the technology are demonstrated and accepted ... increasingly stable as the technology enters its 2nd and 3rd generation. The final height of the plateau varies according as to whether the technology is broadly applicable or benefits only a niche market..."
How familiar is this story?
Most of us in technology have seen Gartner’s famous Magic Quadrant. Many of us, in startups, have taken the published version for a particular space, copied it into PowerPoint and inserted our companies in the lower right (Visionaries) for presentation to investors and potential strategic alliance partners. The implication is, of course, that by aligning with a larger company with the "Ability to Execute", together we could own the coveted Magic Quadrant.
But another Gartner tool that I find even more compelling is the Gartner Technology Hype Curve. The story above is simply the definitions of each of the five steps in the model strung together: Technology Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment and the Plateau of Productivity.
What blows me away is how consistently this cycle reflects reality.
I’ve spent a lot of time in wireless. Intuitively, it is possible to place a given technology somewhere on this curve.
If I were to say "outdoor Wi-Fi" today, most people would quickly come back with "Trough of Disillusionment.” Given the media reports of the past 6-12 months, it’s easy to see why, but that’s what the cycle does. I personally believe that outdoor Wi-Fi is now on the ascent up the Slope of Enlightenment, as witnessed by major build-outs that are happening (“Cablevision more than doubles Wi-Fi coverage area”), but it will take some time for the public perception to catch up.
But if I were to say "WiMAX", what would you think?
Judging from all of the press and conference hype (see Gartner definition about the only people making money), and it’s easy to see that it’s on the ascent and climbing inexorably toward the Peak of Inflated Expectations. Having attended WiMAX World a couple of weeks ago, I can attest to the hype that is being generated, but the Hype Curve tells us that it is inevitably heading for the dreaded Trough ("What do you mean it doesn’t do 70 mbs over 70 kilometers?!?").
What about LTE? If you read the press, you’d think it was imminent, and there’s not even consensus on what the 4G standard is, with some proposing that LTE and Mobile WiMAX somehow merge into “4G.”
It’s amazing how accurate this model has proven to be, and how it can be used to explain market behaviors. Entrepreneurs produce buzzword compliant business plans early on in the lifecycle, and find funding in the Technology Trigger phase. Money starts to dry up and vendor shakeouts occur during the dark days of the Trough. Management teams and the resolve of boards are tested, and only the strongest survive. It is a Darwinian process, but those that do, those that have differentiated themselves and executed, emerge from the other side as real companies. There is money to be made the old fashioned way, not by hype driven valuations, but by rational, solid business fundamentals and execution for the few and the brave.
It’s easy to buy into the hype - it’s always about the "next greater thing." WiMAX is better than outdoor Wi-Fi ... Who needs WiMAX with LTE ... and so on. But is WiMAX really better than Wi-Fi? Does it matter? LTE’s at least five years out, but we have iPhones today. What can we do to empower users today with wireless broadband connectivity? It ain’t EDGE, it ain’t WiMAX, and it won’t be LTE for a long time yet.
It’s important to recognize hype for what it is. Outdoor Wi-Fi is on the Slope of Enlightenment and its second coming. Embrace it.
That’s my .02!
Martin Suter is vice president of business development at BelAir Networks, a provider of broadband mesh solutions for Wi-Fi, WiMAX, 4.9 GHz Public Safety and 5.9 GHz ITS networks. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.
