WEBVTT - The Global Economy and the Hype on Artificial Intelligence 0:00:04.480 --> 0:00:12.520 Welcome to tech Stuff, a production from iHeartRadio. Hey there, 0:00:12.560 --> 0:00:16.400 and welcome to tech Stuff. I'm your host, Jonathan Strickland. 0:00:16.400 --> 0:00:19.680 I'm an executive producer with iHeart Podcasts. And how the 0:00:19.760 --> 0:00:23.960 tech are you. I read the news today, Oh boy, 0:00:24.280 --> 0:00:28.200 I woke up to really glum global financial news as 0:00:28.320 --> 0:00:31.360 various news outlets reported on how a fear that the 0:00:31.480 --> 0:00:35.519 US market was slowing down is now having massive repercussions 0:00:35.680 --> 0:00:39.080 around the world. So, according to the New York Times quote, 0:00:39.320 --> 0:00:44.440 Japan's benchmark index logged its worst single day point decline 0:00:44.840 --> 0:00:48.239 end quote. That index fell by more than twelve percent. 0:00:48.800 --> 0:00:52.640 Europe's markets saw investors freaking out and selling off assets, 0:00:52.840 --> 0:00:56.120 causing prices to tumble further. And while I'm writing this 0:00:56.200 --> 0:00:59.000 episode before the market's opened in the US, in fact, 0:00:59.000 --> 0:01:01.320 I think they just opened as I started recording this. 0:01:01.760 --> 0:01:03.760 The assumption is that our markets are going to follow 0:01:03.800 --> 0:01:09.080 suit after stock futures took a tumble here in America. Now, 0:01:09.160 --> 0:01:13.759 tech companies were hit harder than other sectors were. Everyone 0:01:13.880 --> 0:01:16.880 was hit, but tech companies were hit particularly hard. But 0:01:16.959 --> 0:01:20.360 then tech has also been driving some pretty crazy growth 0:01:20.520 --> 0:01:23.400 in the recent past. They were kind of surging past 0:01:23.440 --> 0:01:25.679 everybody else, so they had further to fall as well. 0:01:25.920 --> 0:01:30.280 The semiconductor fabrication company TSMC, which is responsible for more 0:01:30.319 --> 0:01:34.680 than half the global market share in the semiconductor foundry industry, 0:01:34.920 --> 0:01:39.880 saw it stock price fall by ten percent. Samsung Electronics 0:01:39.920 --> 0:01:43.440 same story ten percent decline. Bitcoin drop by more than 0:01:43.520 --> 0:01:49.480 ten percent as well. So what caused this Well, the 0:01:49.800 --> 0:01:52.880 instigating factor appears to be a US jobs report that 0:01:52.960 --> 0:01:56.440 showed unemployment rows to four point three percent, which is 0:01:56.440 --> 0:01:59.560 the highest it's been since twenty twenty one. There are 0:01:59.680 --> 0:02:02.880 fear of a recession in the United States. Seems like 0:02:02.920 --> 0:02:06.040 there have been fears ever since the pandemic. This would 0:02:06.080 --> 0:02:10.320 continue to affect world markets. Obviously, and one other culprit 0:02:11.000 --> 0:02:14.160 was mentioned, at least in a CNN article on this topic. 0:02:14.480 --> 0:02:17.280 I do not know how realistic it is or how 0:02:17.360 --> 0:02:19.480 much weight we should give it, but that is our 0:02:19.560 --> 0:02:25.280 good old friend artificial intelligence. Now, to be clear, it's 0:02:25.400 --> 0:02:29.160 not really AI's fault. This is not a case where 0:02:29.200 --> 0:02:33.440 some AI process has cast the world economy into chaos, right, 0:02:33.520 --> 0:02:39.000 like some artificial intelligence algorithm played hanky panky with the 0:02:39.000 --> 0:02:42.720 stock market and now everything's crashing. That's not what happened. 0:02:42.720 --> 0:02:46.560 This is not some science fiction black mirror episode. Rather, 0:02:47.000 --> 0:02:51.400 it's the perception of AI, the marketing around AI, the 0:02:51.520 --> 0:02:56.880 swell of greed around artificial intelligence, and the inevitable reaction 0:02:56.960 --> 0:03:01.840 when investors discover that perhaps the goose ain't so golden, 0:03:02.560 --> 0:03:06.480 or at least it ain't golden yet. By that, I 0:03:06.480 --> 0:03:09.680 mean we're gonna talk about the good old hype cycle again, 0:03:10.000 --> 0:03:11.320 and I thought it would be a good idea to 0:03:11.360 --> 0:03:14.520 revisit the topic as we are seeing now how it 0:03:14.560 --> 0:03:19.440 can make a bad situation worse when hype is allowed 0:03:19.480 --> 0:03:23.560 to prolificate. So, first, to be clear, I don't think 0:03:23.639 --> 0:03:27.239 AI hype is the main reason for the economic crisis 0:03:27.639 --> 0:03:30.960 right I'm not saying that the excitement around AI goddess 0:03:31.000 --> 0:03:33.200 to where we are right now. I think at best, 0:03:33.560 --> 0:03:37.760 it's just a contributing factor. It's exacerbating something that was 0:03:37.800 --> 0:03:40.840 already going to happen. But it is true that investors 0:03:40.880 --> 0:03:44.640 have started to back off of AI assets after seeing 0:03:44.640 --> 0:03:49.600 that there isn't a fast track toward profit, as investors 0:03:49.640 --> 0:03:51.760 have had to grapple with the fact that yes, AI 0:03:52.400 --> 0:03:56.760 is incredibly exciting and it has an insane potential. It 0:03:56.840 --> 0:04:00.760 is not, however, ready to be a massive revenue generator, 0:04:00.920 --> 0:04:03.640 and so it's like it's not fully cooked yet, and 0:04:03.680 --> 0:04:06.000 investors were like trying to rush it out to the 0:04:06.040 --> 0:04:09.560 store and it's not even cooked. Well. There are tons 0:04:09.560 --> 0:04:11.840 of headlines out there about how folks have become a 0:04:11.840 --> 0:04:14.880 bit disillusioned when they realize that while AI could be 0:04:14.960 --> 0:04:18.760 boys to change everything, it's not currently doing that. Throwing 0:04:18.800 --> 0:04:22.480 AI into your business plan doesn't immediately met you insane returns. 0:04:22.920 --> 0:04:26.480 AI has limitations, including a very high cost of operation, 0:04:26.800 --> 0:04:30.279 and it's too unrealistic to say it's somehow just magically 0:04:30.320 --> 0:04:34.040 going to cause revenue and profit to search. So investors 0:04:34.040 --> 0:04:37.920 could be cooling down from their initial excitement around AI, 0:04:38.480 --> 0:04:41.560 which means that businesses will have less incentive to just 0:04:41.680 --> 0:04:44.560 shove AI anywhere they can because it's not going to 0:04:44.560 --> 0:04:47.680 get their investors excited. But in turn, this could just 0:04:47.760 --> 0:04:52.039 be one contribution to this market instability, and ultimately it 0:04:52.040 --> 0:04:55.600 may be a relatively small contribution. But it is certain 0:04:55.640 --> 0:04:58.880 that tech companies are seeing some of the biggest losses 0:04:58.960 --> 0:05:01.120 right now, and it's also true that a lot of 0:05:01.160 --> 0:05:04.559 tech companies jumped right on that hype train for AI. 0:05:04.920 --> 0:05:08.359 Now a cohesive look at all the factors contributing to 0:05:08.360 --> 0:05:11.839 the global economic situation is beyond the scope of the show. 0:05:12.120 --> 0:05:15.240 It is way beyond my ability to talk about it. 0:05:15.320 --> 0:05:18.839 I am by no means an economic expert, but we 0:05:18.920 --> 0:05:23.440 can definitely examine this smaller piece of that bigger's puzzle. 0:05:23.600 --> 0:05:26.840 So let's do a quick overview of what the hype 0:05:26.920 --> 0:05:31.120 cycle is. And it's really the process that new ideas 0:05:31.200 --> 0:05:38.040 and often specifically technology typically follows, and it seems ridiculous 0:05:38.040 --> 0:05:40.560 that no one ever seems to learn the lessons. Though 0:05:40.600 --> 0:05:43.039 more on that in the second So first up, what 0:05:43.080 --> 0:05:46.600 we're specifically talking about has the formal name of the 0:05:46.640 --> 0:05:51.040 Gartner hype cycle. Gardner is a US based technology consulting 0:05:51.080 --> 0:05:54.360 firm that got into business back in nineteen seventy nine. 0:05:54.400 --> 0:05:57.840 It was founded by Gideon Gartner, who was a business analyst, 0:05:58.080 --> 0:06:00.480 and the Gardner hype cycle, which I believe he was 0:06:00.720 --> 0:06:03.880 first proposed like in the mid nineties. It's kind of 0:06:03.880 --> 0:06:06.880 an observation. I think of it like Moore's law. We 0:06:06.960 --> 0:06:09.440 call it Moore's law, but Gordon Moore didn't call it that. 0:06:09.760 --> 0:06:11.880 The guy who actually came up with the idea. He 0:06:12.040 --> 0:06:15.560 was making an observation and then making predictions based off 0:06:15.600 --> 0:06:18.839 that observation. The Gardener HiPE cycle is kind of similar. 0:06:19.120 --> 0:06:23.719 It's really more of a way of framing and contextualizing 0:06:23.760 --> 0:06:29.159 an observation about the path a new technology can take 0:06:29.880 --> 0:06:33.080 once it starts to reach a certain level of visibility, 0:06:33.400 --> 0:06:38.600 and the Gardner hype cycle describes five phases with regard 0:06:38.680 --> 0:06:42.880 to how the customer base perceives and uses this technology. Now, 0:06:42.880 --> 0:06:45.200 I should add a lot of folks have called out 0:06:45.240 --> 0:06:48.480 the hype cycle for having some major flaws. One of 0:06:48.520 --> 0:06:51.080 the big flaws is that it's not actually a cycle, 0:06:51.560 --> 0:06:54.840 because you know, like a cycle's a circle, you end 0:06:54.920 --> 0:06:58.719 up back where you began eventually, because that's what circles do. 0:06:59.040 --> 0:07:01.359 The hype cycle is more like a wave, and the 0:07:01.360 --> 0:07:05.760 wave has a high peak of you know, your expectations 0:07:05.960 --> 0:07:08.080 you are are. In fact, it's called the peak of 0:07:08.120 --> 0:07:11.720 inflated expectations. We'll get to it, but that's where your 0:07:12.000 --> 0:07:15.680 perception of what this technology can do is far above 0:07:15.680 --> 0:07:18.600 what the technology is actually capable of doing. There's a gap, 0:07:19.080 --> 0:07:22.000 and then you have a trough that's almost as low 0:07:22.040 --> 0:07:26.000 as the peak, typically the troth of disillusionment. That's where 0:07:26.600 --> 0:07:31.200 you come to grips with oh, this technology isn't as 0:07:31.840 --> 0:07:36.080 capable as I first imagined. And then after that you 0:07:36.120 --> 0:07:39.679 have a slow climb to a steady plateau, the plateau 0:07:39.760 --> 0:07:43.480 of you know, of productivity. But that's not a cycle, 0:07:43.680 --> 0:07:48.560 that's just a path. However, beyond that criticism, other critiques 0:07:48.600 --> 0:07:51.760 include challenges to the observations validity in the first place, 0:07:51.800 --> 0:07:55.440 because there's a distinct lack of data supporting the hype cycle. 0:07:55.720 --> 0:07:57.640 It's one of those things that when you think about it, 0:07:57.640 --> 0:08:00.120 it kind of makes sense, like it feels like it 0:08:00.120 --> 0:08:04.000 it falls into the realm of common sense. But if 0:08:04.000 --> 0:08:08.160 you don't have any actual firm data to support these observations, 0:08:08.240 --> 0:08:11.600 just seeming like it's right isn't good enough. Not really. 0:08:12.000 --> 0:08:15.280 I'm sure you've encountered situations where your own common sense 0:08:15.400 --> 0:08:18.640 told you one thing but it turned out that you 0:08:18.720 --> 0:08:21.080 were wrong. Well, that could also be the case with 0:08:21.120 --> 0:08:24.400 the Gartner hype cycle. And also, as we go through 0:08:24.400 --> 0:08:27.000 this cycle, one really big flaw is that it doesn't 0:08:27.040 --> 0:08:31.080 give us much useful information on either how ideas move 0:08:31.360 --> 0:08:34.880 from one phase of the cycle into the next or 0:08:35.480 --> 0:08:39.200 what we can actually do with this information, Like it 0:08:39.240 --> 0:08:42.679 could just be hey, we keep doing this thing and 0:08:42.840 --> 0:08:45.480 I don't have any information on how this thing happens 0:08:45.800 --> 0:08:48.760 other than this has happened many, many times, but I 0:08:48.760 --> 0:08:52.720 can't can't give you anything useful beyond that. That's one 0:08:52.760 --> 0:08:55.960 way to think about the limitations of the Gartner hype cycle. 0:08:56.200 --> 0:08:59.960 All right, so let's walk through it. The cycle identified 0:09:00.320 --> 0:09:04.040 five phases of a technology. So first up is the 0:09:04.160 --> 0:09:07.880 technology trigger. This is the initial event that introduces a 0:09:07.960 --> 0:09:11.880 technology ultimately to the general public. It doesn't have to 0:09:11.880 --> 0:09:14.400 be a brand new technology. It could be a new 0:09:14.400 --> 0:09:17.480 way to apply an existing technology, or it could be 0:09:17.679 --> 0:09:21.800 some new aspect of an existing technology that gets added in, 0:09:21.880 --> 0:09:26.840 but generally we're talking about a pretty new idea here. Now. 0:09:26.920 --> 0:09:29.600 At first, not many people are going to know about 0:09:29.600 --> 0:09:32.600 this idea, so visibility of the tech is low. Your 0:09:32.840 --> 0:09:35.480 group of initial folks who are talking about this technology 0:09:35.720 --> 0:09:38.400 start to get other people excited about it, and that's 0:09:38.400 --> 0:09:41.959 probably going to first include colleagues and peers, and then 0:09:42.200 --> 0:09:45.000 immediately after that investors, because you always want to try 0:09:45.000 --> 0:09:47.640 and get money for the cool idea you have, And 0:09:47.679 --> 0:09:52.640 then enthusiasm gradually starts to build. The text visibility increases 0:09:52.720 --> 0:09:55.360 as more people become aware of it and become excited 0:09:55.360 --> 0:09:57.680 about it and talk it up even more. The people 0:09:57.679 --> 0:10:00.559 who invested in it, they have an insidi to talk 0:10:00.600 --> 0:10:03.080 it up. Right, if you invest in something, you want 0:10:03.120 --> 0:10:05.120 other people to invest in it too, so that your 0:10:05.160 --> 0:10:07.800 investment has a better chance of paying off. So you 0:10:07.840 --> 0:10:10.760 get your money in first, right, because you're smart. You 0:10:10.800 --> 0:10:13.280 want to get in when it's the bar is at 0:10:13.280 --> 0:10:15.360 it's lowest. You pour in as much money as you 0:10:15.360 --> 0:10:17.640 feel comfortable with. Then you talk it up trying to 0:10:17.640 --> 0:10:21.480 get other people to get excited. And either the technology 0:10:21.520 --> 0:10:25.480 is going to ultimately deliver on what it promised and 0:10:25.520 --> 0:10:27.439 you're going to get a payout because of that, or 0:10:27.880 --> 0:10:29.440 you know you're going to fake it till you make 0:10:29.480 --> 0:10:31.319 it and you get a pay out down the line. 0:10:31.360 --> 0:10:33.920 Maybe someone bigger comes along and buys up the company 0:10:33.960 --> 0:10:35.800 that you invested in, and then you get paid out, 0:10:35.920 --> 0:10:37.200 Like you just want to get paid out, and there 0:10:37.200 --> 0:10:39.200 are a lot of opportunities to get paid out. So 0:10:39.240 --> 0:10:41.880 that's why getting in early is a big deal. But 0:10:42.080 --> 0:10:44.760 we start to see a rapid ascension in visibility as 0:10:44.840 --> 0:10:47.800 media begins to report on it. Folks are talking about it, 0:10:47.880 --> 0:10:50.800 and ultimately the text hits kind of a saturation point 0:10:50.840 --> 0:10:53.480 for awareness, and the tech then is said to be 0:10:54.120 --> 0:10:58.199 at phase two, which is the peak of inflated expectations. 0:10:58.240 --> 0:11:01.240 It's where people are the most most excited for this 0:11:01.320 --> 0:11:04.640 new technology and speculation is running wild about how this 0:11:04.760 --> 0:11:07.920 tech is going to change everything. And it's at this 0:11:08.000 --> 0:11:10.800 stage where people expect this new technology to do things 0:11:10.840 --> 0:11:14.200 it simply will not be able to do. Maybe one 0:11:14.280 --> 0:11:17.520 day it can do some version of that thing, but 0:11:17.600 --> 0:11:20.439 it certainly can't do it right away. So with AI, 0:11:20.720 --> 0:11:22.800 you could say the belief that AI is ready to 0:11:22.880 --> 0:11:27.920 transform business across every industry and produce instantaneous results, that 0:11:27.960 --> 0:11:31.520 would be the peak of inflated expectations. It's not that 0:11:31.600 --> 0:11:34.720 the tech may not ultimately get to that point, but 0:11:34.800 --> 0:11:38.440 it can't do it now. Businesses are still grappling with 0:11:38.679 --> 0:11:41.760 how to integrate AI in ways that make sense to 0:11:41.880 --> 0:11:46.160 their workflow and operations. To use an analogy, if I 0:11:46.200 --> 0:11:50.280 were a hiring manager and if I hired on a 0:11:50.320 --> 0:11:53.960 brand new employee, a human being, and this human being 0:11:54.200 --> 0:11:57.480 is incredibly skilled, and they're knowledgeable, and they have an 0:11:57.520 --> 0:12:01.880 amazing work ethic, the hiring manager I would expect this 0:12:02.000 --> 0:12:07.200 employee to make significant contributions to corporate success. Down the line. 0:12:07.600 --> 0:12:10.120 But I wouldn't think that they would just transform the 0:12:10.480 --> 0:12:14.200 organization overnight unless this was like some weird production of 0:12:14.240 --> 0:12:17.120 the musical How to Succeed in Business Without Really Trying 0:12:17.200 --> 0:12:21.040 or something. Yeah, if it's a fantasy film or something 0:12:21.120 --> 0:12:24.520 like that, sure, but in the real world, no, even 0:12:24.559 --> 0:12:28.240 the best higher in the world is it going to 0:12:28.280 --> 0:12:31.720 transform the business overnight. It's going to take time. Well, 0:12:31.760 --> 0:12:35.040 we should hold AI to the same set of standards. 0:12:35.400 --> 0:12:38.679 You know, it's not something that's just magically going to 0:12:38.800 --> 0:12:43.080 transform everything. Okay, that's just the first two phases of 0:12:43.120 --> 0:12:45.160 the hype cycle. We've got three more to get through. 0:12:45.360 --> 0:12:47.480 But before we do that, let's take a quick break 0:12:47.520 --> 0:13:00.280 to thank our sponsors. Okay, we're back. So the world 0:13:00.720 --> 0:13:04.760 realizes that the hyped technology from the first two phases 0:13:05.120 --> 0:13:09.280 cannot meet the peak of inflated expectations, and folks start 0:13:09.320 --> 0:13:14.560 to get disappointed and excitement and enthusiasm begins to drain away. So, 0:13:14.600 --> 0:13:18.719 according to the hype cycle, visibility now goes into decline. 0:13:19.000 --> 0:13:22.560 People move on to do other things. Some folks will 0:13:22.600 --> 0:13:25.960 stick with the technology typically, I mean it's rare that 0:13:26.200 --> 0:13:29.840 everyone abandoned ship. If they did, then that would just 0:13:29.840 --> 0:13:32.600 be the end of that story, right. The technology just 0:13:32.640 --> 0:13:35.360 wouldn't have any support. No one would be putting any 0:13:35.360 --> 0:13:38.760 money into R and D. It just it'd be a 0:13:38.800 --> 0:13:42.520 dead end most of the time. Though there are those 0:13:42.559 --> 0:13:45.880 who stick with it, especially those who never really hyped 0:13:45.960 --> 0:13:48.040 up what it was capable of in the first place. 0:13:48.080 --> 0:13:53.040 They had more measured expectations. The initial ground swell of support, however, 0:13:53.240 --> 0:13:58.000 is gone. The tech then moves into the troth of disillusionment. 0:13:58.440 --> 0:14:01.800 So in this phase you see a lot of sad 0:14:01.880 --> 0:14:05.080 stuff happen because startups that launched during the earlier hype 0:14:05.080 --> 0:14:08.520 phase face a really tough reality. Unless they can convince 0:14:08.640 --> 0:14:13.520 stakeholders to hang on, they may find themselves out of 0:14:13.600 --> 0:14:16.280 investment money and they just fade away. So a lot 0:14:16.280 --> 0:14:20.080 of startups fail during this phase if you subscribe to 0:14:20.120 --> 0:14:24.000 the Gartner hype cycle model. So this really did happen 0:14:24.040 --> 0:14:26.320 with a lot of VR companies back in the nineteen nineties. 0:14:26.360 --> 0:14:28.160 I'll talk more about VR a little bit later in 0:14:28.200 --> 0:14:31.000 this episode, but we actually saw this kind of play out. 0:14:31.080 --> 0:14:33.200 In fact, you could argue VR was one of those 0:14:33.480 --> 0:14:37.240 technologies that inspired the creation of the hype cycle in 0:14:37.280 --> 0:14:40.760 the beginning anyway, but even larger companies that existed before 0:14:40.880 --> 0:14:43.600 the tech had hit the scene may find themselves in 0:14:43.680 --> 0:14:48.440 trouble if they invested too heavily in whatever the technology was. 0:14:49.120 --> 0:14:55.120 So with AI companies like Intel, Meta, Google, and Microsoft, 0:14:55.160 --> 0:14:57.520 they kind of fall into this category like they're huge, 0:14:57.600 --> 0:15:01.000 and they're much bigger than just artific intelligence. That's not 0:15:01.040 --> 0:15:03.440 the only business they're in, right, It's not like they're 0:15:03.440 --> 0:15:06.240 a startup that's totally focused on AI, but they've also 0:15:06.360 --> 0:15:10.840 spent an enormous amount of money in AI research, and 0:15:10.920 --> 0:15:15.440 for interest and enthusiasm around AI to kind of fade 0:15:15.960 --> 0:15:19.760 is bad news for them because that's one less thing 0:15:19.800 --> 0:15:21.960 they can hype up to their investors when it comes 0:15:22.000 --> 0:15:24.760 to things like earnings, calls, and such to get them 0:15:24.760 --> 0:15:29.240 excited and reinvest in the company. Gradually, according to the 0:15:29.240 --> 0:15:32.040 Gartner hype cycle, folks start to figure out the best 0:15:32.200 --> 0:15:35.320 uses for the technology in question, whatever it may be. 0:15:36.400 --> 0:15:39.720 These uses might not be as transformative and impactful as 0:15:39.720 --> 0:15:42.640 what people believed, especially at the height of the peak 0:15:42.760 --> 0:15:46.560 of inflated expectations, but assuming the technology has any utility 0:15:46.600 --> 0:15:49.840 and value to it, enough folks will stick with it. 0:15:49.840 --> 0:15:54.200 It'll find its place and gradually and with much less hoopla, 0:15:54.280 --> 0:15:58.720 folks will adopt this technology. This Gartner calls the slope 0:15:58.840 --> 0:16:03.080 of enlightenment. People take a more grounded approach to implementing 0:16:03.320 --> 0:16:06.240 this tech. The slope of enlightenment then leads to the 0:16:06.280 --> 0:16:10.120 final phase in the Gartner hype cycle, called the plateau 0:16:10.360 --> 0:16:14.160 of productivity, where folks and organizations make regular use of 0:16:14.200 --> 0:16:17.720 this technology in ways that just makes sense. And this 0:16:17.880 --> 0:16:22.680 technology might not boost company profits into overdrive, but they 0:16:22.720 --> 0:16:26.120 would improve results in various ways. That's the hype cycle, 0:16:26.440 --> 0:16:29.560 which again is not a cycle. Now, as I mentioned earlier, 0:16:29.800 --> 0:16:32.560 this observation is really just that it's not a law, 0:16:32.800 --> 0:16:35.840 and some argue it's not even an accurate observation that 0:16:35.920 --> 0:16:41.240 technologies don't necessarily follow this pattern that Gartner has laid out. 0:16:41.520 --> 0:16:44.080 Some may argue that it's more accurate to say it's 0:16:44.120 --> 0:16:48.840 the marketing around technologies that follow at least a variation 0:16:49.200 --> 0:16:53.000 of this story, but that the tech itself really should 0:16:53.040 --> 0:16:56.920 be considered separately. Also, the terminology used in the Gartner 0:16:57.040 --> 0:17:01.320 hype cycle gets pretty wishy washy because it's not quantitative. 0:17:01.400 --> 0:17:08.200 You cannot measure it right. Inflated expectations, disillusionment, enlightenment, these 0:17:08.240 --> 0:17:12.800 words have no objective meaning or means of measurement when 0:17:12.800 --> 0:17:17.440 it comes to a technology's success or even acceptance. Also, 0:17:17.480 --> 0:17:20.520 it's pretty hard or even impossible, to tell where any 0:17:20.560 --> 0:17:24.199 technology might be along this cycle until it moves on 0:17:24.240 --> 0:17:26.800 to the next phase. Right, how can you say, oh, 0:17:26.800 --> 0:17:29.600 we're at the peak if then next week it goes 0:17:29.600 --> 0:17:31.600 even higher like oh, I was wrong, Now we're at 0:17:31.640 --> 0:17:33.439 the peak, And you might be doing that over and 0:17:33.480 --> 0:17:36.200 over again. And as I mentioned before, another really big 0:17:36.240 --> 0:17:39.440 issue is that this doesn't identify anything that actually causes 0:17:39.560 --> 0:17:43.159 the technology to transition from one phase to the next. So, 0:17:43.640 --> 0:17:46.000 at least according to some critics, not only can you 0:17:46.119 --> 0:17:51.720 not tell where along this supposed hype cycle technologies may fall, 0:17:51.920 --> 0:17:54.480 you don't know when they're going to make the turn 0:17:54.520 --> 0:17:57.560 to the next stage, and you don't know how dramatic 0:17:57.600 --> 0:17:59.720 that next stage is going to be. It's possible that 0:18:00.240 --> 0:18:03.560 the trough of disillusionment isn't as big a dip, or 0:18:03.600 --> 0:18:06.359 it could be a much worse depth like NFTs, I 0:18:06.359 --> 0:18:10.600 would argue, went through a really big one. After they 0:18:10.640 --> 0:18:13.240 hit a really tall peak, they went to a really 0:18:13.359 --> 0:18:16.840 deep trough. And it's not like NFTs don't exist now 0:18:16.880 --> 0:18:22.320 but boy, they are not anywhere close to the level 0:18:22.520 --> 0:18:25.480 of popular that they were at the height of the 0:18:25.560 --> 0:18:29.280 NFT frenzy. You could also argue some technologies don't seem 0:18:29.280 --> 0:18:33.280 to follow this path at all. I think consumer smartphones 0:18:33.359 --> 0:18:36.400 fall into this camp, Like when Apple launched the iPhone. 0:18:36.720 --> 0:18:40.200 Smartphones had existed before the iPhone. Apple is known as 0:18:40.240 --> 0:18:44.520 a company that launches refined products, as in products that 0:18:44.560 --> 0:18:46.800 have already been on the market in some other form, 0:18:46.840 --> 0:18:50.640 but Apple has put its own refinement on that technology, 0:18:51.040 --> 0:18:53.240 and that's where a ton of the value comes from. 0:18:53.640 --> 0:18:56.440 So when Apple launched the iPhone, even though the iPhone 0:18:56.480 --> 0:18:58.880 was not the first smartphone to ever hit the market, 0:18:59.160 --> 0:19:01.119 it was the first one that I think was really 0:19:01.160 --> 0:19:04.639 marketed to the average consumer as opposed to executives and 0:19:04.760 --> 0:19:08.960 early adopters. Well, I think the hype just went up 0:19:09.000 --> 0:19:11.920 and up and up with the iPhone and with each 0:19:11.960 --> 0:19:14.960 subsequent iPhone release for quite some time, until we reached 0:19:14.960 --> 0:19:19.480 a point where the improvements from generation to generation were 0:19:19.520 --> 0:19:25.280 bound to be incremental rather than revolutionary, which was gonna happen. Right. 0:19:25.520 --> 0:19:30.760 You can't have every phone reinvent the phone every single time. 0:19:31.280 --> 0:19:34.320 It might work for the first few generations simply because 0:19:34.640 --> 0:19:37.360 of the rapid development of technology. But you eventually start 0:19:37.400 --> 0:19:41.280 getting diminishing returns, and so then you get the incremental improvements. 0:19:41.520 --> 0:19:44.159 But I don't think we ever really entered a trough 0:19:44.200 --> 0:19:48.240 of disillusionment with consumer smartphones. I don't think that happened. 0:19:48.400 --> 0:19:52.280 I think people just sort of entered into like a 0:19:52.440 --> 0:19:55.360 realm of managed expectations. For the most part, you still 0:19:55.359 --> 0:19:58.600 see people get excited every fall, hoping that the next 0:19:58.720 --> 0:20:03.280 Apple iPhone event is going to be one that blows 0:20:03.359 --> 0:20:06.199 us all out of the water by introducing some feature 0:20:06.240 --> 0:20:09.920 no one ever even imagined, which is an unrealistic expectation. 0:20:10.000 --> 0:20:13.399 It may still happen on occasion, but it's unrealistic. So 0:20:13.920 --> 0:20:17.639 I don't think consumer smartphones followed the hype cycle, so 0:20:17.880 --> 0:20:22.320 not every technology goes along this path. Still, While I 0:20:22.359 --> 0:20:25.359 share skepticism that the hype cycle is the be all, 0:20:25.440 --> 0:20:29.560 end all description of the phases in technological acceptance and adoption, 0:20:30.080 --> 0:20:33.199 I do think it provides a useful starting point for 0:20:33.320 --> 0:20:38.960 discussions around technology that have experienced a skyrocketing early effect 0:20:39.480 --> 0:20:42.560 followed by a quick dip once folks realize that the 0:20:42.600 --> 0:20:46.680 tech perhaps is not fully baked. So I already mentioned 0:20:47.240 --> 0:20:50.639 VR virtual reality as an example of that. In the 0:20:50.720 --> 0:20:54.600 late nineteen eighties, virtual reality was just starting to get attention. 0:20:54.880 --> 0:20:57.879 You know, Jaron Lanier, who is typically credited as the 0:20:58.160 --> 0:21:01.960 person who coined the term virtual reality, did that somewhere 0:21:02.000 --> 0:21:06.560 around nineteen eighty seven, so it's a pretty recent tech, 0:21:06.640 --> 0:21:10.040 and the concept from the get go was intriguing. Instead 0:21:10.040 --> 0:21:13.280 of staring at a computer screen and interacting through mouse 0:21:13.320 --> 0:21:17.440 and keyboard, the future of computing would put you inside 0:21:17.520 --> 0:21:21.080 the programs. It was like Tron, but for real. Okay, 0:21:21.080 --> 0:21:24.320 for people who aren't old. The original Tron film came 0:21:24.359 --> 0:21:27.280 out way back in nineteen eighty two, and it featured 0:21:27.320 --> 0:21:31.200 a human character getting digitized and uploaded into a computer 0:21:31.520 --> 0:21:35.400 as a program, so he was inside the computer. That's 0:21:35.480 --> 0:21:37.800 kind of how people thought of virtual reality in the 0:21:37.840 --> 0:21:41.399 early days. So imaginations ran wild with the idea of VR. 0:21:41.720 --> 0:21:45.119 You'd be able to navigate operating systems and programs the 0:21:45.160 --> 0:21:48.160 same way as you would walk around like a building 0:21:48.280 --> 0:21:51.480 or even a city landscape. Never mind that that isn't 0:21:51.680 --> 0:21:55.600 really efficient or practical. The concept of that really appealed 0:21:55.600 --> 0:21:58.520 to people, and you can see reflections of this to 0:21:58.640 --> 0:22:03.480 this day and other ideas like the metaverse. You still 0:22:03.480 --> 0:22:07.640 have people holding on to this idea that somehow navigating 0:22:08.200 --> 0:22:12.440 computer programs as if they were physical landmarks is appealing. 0:22:12.640 --> 0:22:16.200 I'm no longer convinced that it is. But anyway, you'd 0:22:16.240 --> 0:22:20.560 be put into the middle of all this stuff, whether 0:22:20.600 --> 0:22:24.600 it was to blast polygonal aliens or perform surgery on 0:22:24.640 --> 0:22:26.919 a patient who's half a world away. The sky was 0:22:26.960 --> 0:22:29.800 the limit with virtual reality. There was a ton of 0:22:29.840 --> 0:22:32.520 money thrown at VR in those days. R and D 0:22:32.680 --> 0:22:35.880 departments were flush with cash, and a lot of folks 0:22:36.080 --> 0:22:40.080 started doing really cool research in VR. But all was 0:22:40.160 --> 0:22:45.120 not well. A few companies rushed to develop consumer VR experiences. 0:22:45.520 --> 0:22:48.480 That equipment was far too large and expensive for anyone 0:22:48.520 --> 0:22:51.600 other than the very wealthy to own it for themselves, 0:22:51.680 --> 0:22:55.840 so the idea wasn't to create consumer products. Instead, the 0:22:55.880 --> 0:22:59.320 idea was to create VR arcade experiences. So you had 0:22:59.320 --> 0:23:04.320 companies like Virtuality building these enormous gaming rigs that included 0:23:04.400 --> 0:23:08.639 bulky head mounted displays and pedestals with a railing built 0:23:08.680 --> 0:23:11.440 in so that it would prevent players from stepping off 0:23:11.440 --> 0:23:15.080 and falling over. Arcade operators would charge players to play games. 0:23:15.200 --> 0:23:18.240 Sometimes it was a flat fee for a specific game title. 0:23:18.440 --> 0:23:21.160 Sometimes you were paying for like five minutes of game 0:23:21.240 --> 0:23:24.240 time per go, which seemed expensive, but then if you 0:23:24.280 --> 0:23:26.760 spent five minutes in VR, you'd be like, no, I'm good. 0:23:27.720 --> 0:23:30.240 But players who took the plunge like yours truly. I 0:23:30.280 --> 0:23:33.040 was one of these people. There was a mall. Doesn't 0:23:33.680 --> 0:23:36.600 it no longer really exists. I mean the building does, 0:23:36.640 --> 0:23:39.119 but there's hardly any businesses in it. But when that 0:23:39.240 --> 0:23:43.040 place mall was the big mall that was within an 0:23:43.040 --> 0:23:45.800 hour's drive of where I grew up, and we would 0:23:45.840 --> 0:23:50.119 go there on occasion, and they had a VR arcade 0:23:50.840 --> 0:23:54.240 in that mall, and people who tried it out, including myself, 0:23:54.440 --> 0:23:57.520 often we would be impressed with the user interface experience 0:23:57.560 --> 0:24:00.200 because being able to look around and change your point 0:24:00.200 --> 0:24:04.199 of view in game by physically moving your body, that 0:24:04.320 --> 0:24:07.080 was a really big deal. You know, first person shooters 0:24:07.119 --> 0:24:09.840 weren't really a genre yet when these VR systems first 0:24:09.880 --> 0:24:13.600