Beyond the Hype: Time to deliver for Blockchain
We’re currently living in an era of hype, where everything — from technology to clothes and diets to influencers, sport stars and musicians — seems to scream and compete for our immediate attention. The ability to generate buzz and to get people talking about something is incredibly valuable. Attention is a finite resource, after all. But what happens when the hype dies down? Let’s look at the hype around — or better, beyond — blockchain.
Understanding hype
The etymological roots of the word hype are somewhat unclear, but we know that it first emerged in the United States in the first decades of the twentieth century. The word had various meanings, including “a shortchange swindle” or “a person who cheats.” At the very time when the word first appeared in dictionaries, new technologies helped produce a new mass culture, and the US witnessed a period of unprecedented optimism.
But the economic boom period of the 1920s and the hype that surrounded it came to an abrupt end in October 1929 when the stock market crashed. Optimism turned into bitter pessimism. And the excesses of the Roaring Twenties were followed by the malaise of the Great Depression in the 1930s. By the late 1950s, the word hype had come to be used more specifically to refer to “a misleading or exaggerated story” and “overblown publicity or advertising.” Today, it refers mainly to excessively optimistic expectations.
Blockchain: what is all the hype about?
Surrounded by highly optimistic expectations, blockchain was hailed as a true game-changer in the tech industry. But seriously, both blockchain and Bitcoin turned into buzzwords, and the hype around blockchain was soon in full swing. Some facts? 5.616 ICOs have been published (according to ico bench) — 53% with an MVP & 47% without one — make the math. And according to this article on Investopedia, 80% of ICOs were scams — you can not make that shit up.
We could go now down the ICO scam boulevard of broken dreams — but this is a story that has been told before, and there are many more in the future still to come.
Much more importantly, we’ve all heard that blockchain has the potential to radically transform industries. But so far, relatively little progress has been made. The technology hasn’t advanced as quickly as many people thought it would. As a recent Mckinsey report notes, “despite billions of dollars of investment and nearly as many headlines, evidence for practical, scalable use for blockchain is thin on the ground.” Why is blockchain failing to develop past its pioneering stage? Or did news and headlines mislead us?
Gartner, a global research and advisory firm, said in 2016 that the technology had hit the peak of its Hype Cycle. According to Gartner‘s most recent Hype Cycle, blockchain is now sliding into what they call “the trough of disillusionment.”
The Gartner Hype Cycle
First published in 1995, the Gartner Hype Cycle is an instrument to visualize the maturation of new technologies. Gartner classifies technologies into five phases according to their level of adoption and attention. According to their model, all new technologies go through the same cycle.
The five phases of a technology’s life cycle are as follows:
1Technology trigger: interest in an emerging technology starts to spread and the hype grows quickly.
2Peak of inflated expectations: a frenzy of publicity leads to excessive enthusiasm and unrealistic expectations.
3 The trough of disillusionment: interest in a new technology wanes and enthusiasm gives way to frustration and excessive disappointment.
4 Slope of enlightenment: benefits start to crystallize, and it becomes clearer how the technology can be successfully applied.
5 Plateau of productivity: the technology becomes increasingly stable and mainstream adoption starts to take off.
Gartner’s 2019 Live Cycle for Blockchain Technologies suggests that most technologies are still five to ten years away from the transformational impact.
“Blockchain technologies have not yet lived up to the hype and most enterprise blockchain projects are stuck in experimentation mode,” notes Avivah Litan, distinguished analyst and research vice president at Gartner. “Blockchain is not yet enabling a digital business revolution across business ecosystems and may not until at least 2028, when Gartner expects blockchain to become fully scalable technically and operationally.”
Don’t believe the hype — create real traction
It would be a mistake to discount a technology just because there is hype surrounding it. Not all hype is deceptive, and some can be well-deserved. In fact, hype can be a good thing and draw attention to new technologies. It can also create a powerful community. And yet, hype, by itself, doesn’t necessarily create anything of real value.
Real value is the key driver — for users, for corporations and eventually for society.
I think it is crucial to remove the mystery from this difficult subject and to look more deeply into it. Especially blockchain. Whether or not blockchain has been overhyped shouldn’t be the issue. The real issue is: what are the problems that need to be solved? In the hype economy, technology doesn’t start with problems, but with expectations.
Our humble approach to deliver on a global scale
We founded Gapless one year ago with the idea in mind to create something which is ahead of the time but close enough to the present to reach mass adoption in an acceptable time period. Gapless ist the one-stop-platform for #thingsyoulove.
We want to change the way value is perceived and building the world’s first blockchain platform for premium and classic cars. Gapless allows collectors, vehicle owners and dealers to digitally manage their vehicles and access services. Cars are just the beginning, though. We aim to encompass all things collectible, and to become foremost platform for all of your most treasured objects.
Blockchain is a game changer — but…
We managed to get growth through straight forward start up tactics and a lot of iterations in marketing and product. However — the magic in our model and in close to every blockchain startup is to scale through contribution of Partners (for us that are for example car manufacturers) which add value through exclusive data and access to users in exchange for new revenue streams with exponential growth.
But there is no free lunch — to get the slightest attention and commitment from partners which can give you leverage you better bring your A Game. In this context A Game means user adoption and in the best case a first scaleable monetization case and over the top margins.
Blockchain is a game changer — there is no doubt about that — but without adoption from real users every idea of “lets decentralize this” is just a mission to mars doomed to fail. Even if you have figured that out — every startup that is in the blockchain industry right now faces the challenge that they might be too early to the party — for users — for partners — for investors. Facebook would have not worked in 1994 — timing is crucial. We know that and therefore try to leverage on what counts — user adoption and scalable revenue cases.
“No guts no glory” — History is always written by winners
The quote from J.F. Kennedy “Those who dare to fail miserably can achieve greatly” — seems to be back in style. As with every new major technology which enables completely new business models for companies — there will be a lot of losers but a few winners. If you, like me, believe that ultimately decentral business models are now what platform models like Amazon were in 1997 — this is a “No guts no glory” game — for everyone involved.
Hype will never bring users, adoption, retention or revenue — real value does. Beyond hype means to believe and deliver even when the weather seems to get rougher — sticking to the plan while others doubt — bringing your A Game when it counts — for the chance to be one of the few winners.
Like if you agree — comment if you don’t. (I always wanted to do this engagement influencer 101 trick).
Jan Karnath is CEO & Co-Founder of Gapless, the all-in-one app for your car. Follow us on Twitter (Porsche Digital, Next Visions), Instagram (Porsche Digital Lab Berlin, Porsche Digital, Next Visions) and LinkedIn (Porsche Digital Lab Berlin, Porsche Digital) for more.
