In the age of social media, everything gets tremendous amounts of hype. The next iPhone release. Next #1 pick in the NFL Draft. Next unicorn. Next free marketing webinar that you can’t miss if you want your small business to double its money in the next six months. So how do you drown out the carnival barkers and decide where all the hype ends and the substance begins?
If it’s a product, you can read scores of reviews. If it’s an athlete, you can watch game tape. And even then the most likely outcomes aren’t guaranteed. A solid product’s shortcomings might be answered by a competitor. The starting quarterback might blow out his knee. Now imagine trying to distinguish whether certain emerging technologies will realize their supposed promise. If you’re running a business, the decision to adopt flashy new innovation may very well make the difference between success and failure for the business as a whole.
This isn’t just the usual risk vs. reward debate. It’s a matter of early adopter vs. late adopter. The former involves high-risk but high-reward for getting ahead of the curve; the latter is almost an inevitability in order for the business to survive. Anyone making this decision needs to step back and determine where his or her business fits within the general cycle of innovation introduction and adoption, and how that informs the optimum route to take for that business. Gartner, Inc. an international research and advisory company, offers a methodology for this very problem.
The Gartner Hype Cycle
Back in 1995, Gartner introduced its first Hype Cycle for Emerging Technologies—a “standard adoption model” that plots out the typical trajectory of innovation, regardless of its industry, from when it’s first introduced all the way to when it becomes everyday technology:
The idea is that, regardless of the innovation, once word of it gets out, buzz is generated, predictions are made (many of them exaggerated or premature), the innovation loses its steam as shortcomings and failures are reported, savvy companies learn from these mistakes, then, if the technology survives, it’s refined until it finally becomes integrated into daily use.
This trajectory can be broken more specifically into five phases:
- Innovation Trigger: A new technology begins to gather media interest, enough to attract a sizable pool of potential early adopters. Though a first-generation product may not yet exist, the promise of such a technology perpetuates its hype.
- Peak of Inflated Expectations: A handful of success stories overshadow the many failures the technology is experiencing. The buzz is intense enough that companies beyond the early adopters begin to investigate.
- Trough of Disillusionment: First-generation products fail to deliver on many of their essential promises, causing the initial hype to reverse itself. Companies either fail or regroup. Whoever survives will do so only because they’ve improved their product enough to retain early adopters.
- Slope of Enlightenment: As second- and third-generation products are implemented, enterprise-level businesses begin to see the potential benefits of the technology, causing them to fund their own trials. The technology is by no means mainstream, as a number of companies are still hesitant to adopt.
- Plateau of Productivity: The technology has become mainstream enough that businesses know how to judge whether or not a provider passes muster. ROI for investing into this technology has been validated many times over, and even the most conservative companies are jumping in.
The location of a particular technology within the trajectory of the hype cycle doesn’t necessarily equate to the amount of time before its mainstream adoption. For example, Technology A could be in its Innovation Trigger phase, yet have only 2-5 years before mainstream adoption, while Technology B could be in its Slope of Enlightenment phase, and still require another 2-5 years before mainstream adoption.
Here’s a more comprehensive breakdown of the Hype Cycle:
How a Hype Cycle Translates to Your Business
For the past 22 years, Gartner has released industry-specific hype cycles that map out where all the subsets of an emerging technology currently exist within the hype cycle infrastructure. Here’s an example of a hype cycle for the Internet of Things (from the 2016 report):
If you’re a company that could benefit from IoT products and services you’d look at the above graph and ask yourself:
- Should I make an early move? This is all about the risk you’re willing to take, and the amount of loss your company can withstand whenever it gambles on new strategies.
- Should I back off a bit, but still be ready to pull the trigger? This is where you’ll want a more complete cost-benefit analysis before making any concrete decisions.
- Should I wait for more market results? If your company can’t afford a major investment loss, or if a gamble isn’t currently necessary to grow the company, then it’s better to take the role of late adopter.
In part two of this article, we’ll break down the most recent Hype Cycle report for three key innovation areas: healthcare, education, and human resources.
Need Advice on Integrating New Technologies?
tekMountain is a leading national entrepreneurial and innovation center. We provide businesses of every size with consultation regarding the latest technologies and what products or services might be the best fit. Regardless if you consider yourself as conservative or a major risk-taker, we can actualize the business solutions that fit your strategies.
Contact tekMountain today to learn more about how your company can stay ahead of the innovation curve.