The Technology Hype Cycle takes every budding technology on a rollercoaster ride of ups and downs. Before diving headfirst into any new tech, it’s vital for businesses to pinpoint where a given technology stands in their Hype Cycle. Just look at eCommerce, for instance – today, it’s an inseparable aspect of our daily lives. However, take a step back to the early 1990s, and you’ll find it was merely a figment of our imagination.
The remarkable evolution of e-commerce technology serves as an excellent illustration of the Technology Hype Cycle. E-commerce has experienced dramatic rises, hype, and falls throughout its history, including events like the notorious Dot-Com bubble burst in 2000. Fast forward to the present day, and it has firmly established itself as a mainstream technology. In this article, I will use e-commerce technology’s multi-decade journey to widespread adoption to exemplify each stage of the 5 stages of the Hype Cycle.
Also if you did not know, the hype cycle is a great tool for businesses to decide when and if they should invest in a given technology. For information on how to use the hype cycle, see my article, Hype Curve? This Is What You Need To Know About The Technology Hype Cycle.
Stage 1 – Innovation Trigger That Begins The Hype Cycle: The Technology Gets Discovered.
The innovation trigger stage of the Hype Cycle is when the technology starts to come out of the lab. At the beginning of this stage no commercially usable product actually exists, but the media starts to generate excitement and curiosity about the product. For example, the trigger point for eCommerce began in the 1990s. Specifically, indicators that this emerging eCommerce technology had the potential to become commercially viable included:
- Increased use of the Information Superhighway. By the mid ‘90s over 45 million people were using the Internet.
- Invention of Web Browser. Tim Berners-Lee browser created the first browser ushering in the world wide web (www)
- Ability To Secure Financial Transactions. Netscape created the Hypertext Transfer Protocol Secure (HTTPS) which led to its use as a way to secure financial transactions over the internet.
- Setup of First eCommerce Site. In 1994, NetMarket went online touting itself as the shopping mall of cyberspace.
Stage 2 – Peak of Inflated Expectations: Technology Hyped That It Will Be-All And End-All.
The Peak of Expectations stage of the Hype Cycle is when parent companies of the technology amplify the marketing hype to a fever pitch. Next, investors start investing in this technology. Also, mass media and social media begin publishing success stories generating excitement and increasing public expectations. For example, the peak of inflated expectations for eCommerce began in the later part of the 1990s. Specifically, indicators that eCommerce was reaching its peak of expectations included:
- Many eCommerce Websites Were Founded. There were numerous eCommerce startups. For example, one of them was Amazon, an online bookstore.
- Investors Flock To Bet On This New Game-Changer. Some of these eCommerce platforms would succeed, many would fail. Specifically, some of the eCommerce stars included eBay, Rakuten, Alibaba, Pets.com and Webvan.
Stage 3 – Trough of Disillusionment: Realization That Technology Can’t Match the Hype.
The Trough Of Disillusionment stage of the Hype Cycle is when the technology begins to fail in real-life situations. Investors lose big, the public and media interest wanes. For eCommerce this stage started to happen in the late 1990s resulting in the Dot-Com bubble burst in 2000. Indicators that eCommerce was entering the Trough of disillusionment included:
- Dot-Com Bubble Bursts. This was where several eCommerce companies ran out of money and had to declare bankruptcy. Most notable were Pets.com and Webvan.
- Major Effect On Economy. Sometimes when the public loses interest in a technology, it can have a major impact on the entire economy. This was the case with the dot-com bubble burst where trillions of dollars in investments were lost throughout the economy.
Stage 4 – The Slope of Enlightenment: Technology Evolves And Starts Being Useful.
The Slope of Enlightenment stage of the Hype Cycle is when the technology industry incorporates their lessons learned and starts producing better products and solutions. Specifically, this is when 2nd and even 3rd generation products start to appear. For example with eCommerce, this stage started in the early 2000s. Specifically, indicators that eCommerce was in the Slope of Enlightenment included:
- Payment Systems Evolve. PayPal started to catch on as an eCommerce payment solution. Many other payment systems were also introduced.
- Online Advertising Begins. Google introduces Adwords in 2000. This accelerated the growth of eCommerce by making online shoppers aware of the products available online. Just one-click away.
Stage 5 – Plateau of Productivity: The Last Stage of the Hype Cycle Where Technology Becomes Useful and Widely Adopted.
The Plateau of Productivity stage of the Hype Cycle is when a whole ecosystem for the technology is created and provides real-world solutions. At this stage, businesses and investors have predictability that their investment in the technology will have a consistent pay-off. For example, eCommerce for this stage started in the mid-2000 and continues today. Specifically, indicators that eCommerce is in the Plateau of Productivity include:
- Large and Small Companies Are Using eCommerce Solutions. Large companies like Amazon and Walmart have created their own eCommerce solutions. Small companies are also able to leverage eCommerce solutions using the services of companies like Shopify and BigCommerce.
- eCommerce Ecosystem Expands and Matures. Whole sub-industries of technology have emerged to support eCommerce. This includes shipping solutions to enable businesses to ship their products globally, Also, other eCommerce-related solutions include multi-channel marketing, customer support systems to include live chat, social media for referrals / product buzz, order fulfillment logistics centers, and much more.
For more details and information on the Technology Hype Cycle, see F12’s What is the Hype Cycle and How To Avoid It, And Lido’s Gartner’s Hype Cycle for Businesses, and BMC’s Introduction to Gartner’s Hype Cycles. Also, see my article, Hype Curve? This Is What You Need To Know About The Technology Hype Cycle.
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