Riding the Waves: The ebb and flow of hype in the world of VC
Over the years, working in early stage ventures, we’ve been on a roller coaster ride. We’ve felt the adrenaline when ascending the next big tech wave, watched anxiously as the wave crested, and weam sometimes soaked after that wave breaks. The ebb and flow of hype are part and parcel of the industry. We are currently navigating two potent swells — Artificial Intelligence (AI) and the blockchain/Web3 wave. However, it is important to remember that these are not the first hype waves, nor will they be the last.
Today, we’ll take you through a chronicle of 15 of the most significant hype waves that we have witnessed in modern memory, and the lasting imprints they left on the technological landscape. We will then delve into some of the key lessons these waves have to offer.
15 hype waves
1. Mainframe computers (1960s): Their colossal size was dwarfed only by the hype they generated. The mainframes paved the way for computer-aided business operations, a reality we take for granted today.
2. Personal computers (PCs — 1970s): PCs transformed computing from a corporate luxury to an individual necessity. They unlocked a world of personal productivity and creativity tools that we cannot do without today.
3. Biotech (1980s): This wave brought forth a revolution in drug development and genetically modified plants and organisms. Modern medicine and agriculture owe a lot to this wave.
4. Internet and Dot-com (late 1990s): The Internet upended traditional business models, prompting a frenzied dot-com bubble that eventually burst. Yet, it left us with a globally interconnected world, paving the way for giants like Amazon, Google, and countless others.
5. Mobile computing (mid-2000s): The smartphone wave put the power of the internet in our pockets. The rise of companies like Apple and the adoption of smartphones have significantly influenced our lifestyle and work patterns.
6. Social media (late 2000s): Platforms like Facebook, Twitter, and LinkedIn started as a hype but are now intrinsic to personal, professional, and political dialogues.
7. Cloud computing (2010s): The cloud wave transformed business operations by providing flexible, scalable, and cost-effective IT resources. Companies like Amazon and Microsoft have built enormous cloud infrastructures that support businesses worldwide.
8. Sharing economy (2010s): This wave gave birth to businesses like Uber and Airbnb that disrupted traditional sectors like transportation and hospitality.
9. Big Data (2010s): A hype that evolved into a critical business resource. Big data analytics now informs decision-making across industries.
10. Fintech (2010s): With companies like PayPal and later Stripe and AfterPay, we saw the financial sector’s disruption, leading to today’s digital payment norms.
11. Internet of Things (IoT — mid-2010s): Despite the initial hype, the increasing ubiquity of internet-connected devices is testament to IoT’s lasting impact.
12. Augmented/Virtual Reality (AR/VR — mid-2010s): Though mainstream adoption is still evolving, these technologies have found significant use cases in gaming, real estate, engineering and training simulations.
13. Cryptocurrencies (late 2000s — current): Bitcoin’s rise sparked a gold rush for digital currencies. Despite the volatility, cryptocurrencies have spurred interesting discussions on decentralisation and financial sovereignty.
14. AI (current): AI is transforming sectors from healthcare to transportation to professional services. The hype is ongoing, but AI’s influence is undeniable and is bound to leave a lasting impact.
15. Blockchain/Web3 (current): Blockchain promises to redefine trust and disrupt numerous industries. Web3, a vision of a decentralised internet, is riding the same wave. The hype is strong, and the potential outcomes are as fascinating as they are unpredictable.
Lessons from all the hype
So, what can we learn from these hype waves?
Lesson 1 — Technology outlives hype: Almost every wave was accompanied by a period of intense hype, often followed by a ‘crash’ or ‘winter’. Yet, the underlying technology finds a way to integrate into our lives, often in forms that were not initially envisioned.
Lesson 2 — Evolution, not revolution: Despite the rhetoric, technology tends to evolve existing systems rather than overthrowing them. E.g., Fintech did not eliminate traditional banks but transformed them.
Lesson 3 — Patience is a virtue: Genuine world-changing adoption takes time, often longer than the hype suggests. This was true for the Internet, and it will likely be true for AI and blockchain.
Lesson 4 — People matter: The most successful technologies are those that put people first. This could mean enhancing personal productivity (PCs), enabling communication (Social Media), or creating trust (Blockchain).
Lesson 5 — Expect the unexpected: The impacts of a new technology are often unexpected. Who foresaw that the Internet, a technology designed to share academic papers, would one day disrupt commerce, media, politics, and so much more?
Conclusion
As we navigate the hype waves of AI and Web3, these lessons provide valuable context. But more importantly, they serve as a reminder that the ride — the thrill of the wave, the view from the crest, and even the splash of the break — is what makes our journey so captivating.
After all, as venture capitalists, we are not just investing in technologies; we are investing in the future. And the future, as history shows us, is always a mix of the expected, the unexpected, and the downright astonishing. So, as we ride these waves, let’s embrace the uncertainty, enjoy the ride, and, most importantly, learn from it.
About Us
NotCentralised is an emerging technology venture studio. Our work embraces Ingenuity, Impact and Community. A core service for clients is capital advisory. We assist with equity, debt and token capital raises from Seed to Series B stage businesses. NotCentralised is a Corporate Authorised Representative of AFSL holder BK Consult.
