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Does The Gartner Hype Cycle Live Up to Its Own Hype?
The Proptech industry is no stranger to tech hype. Whether blockchain and smart contracts or the rise in fractional investing, a slew of trending innovations grab attention each year. Some of these innovations become mainstream, while others never quite catch on.
One way Proptech executives can sift through the noise of tech hype is by utilizing the Gartner Hype Cycle. The Hype Cycle is a graphical depiction of the typical patterns that arise with each emerging innovation. The American advisory, research, and IT firm Gartner creates 90 Hype Cycles annually in various domains to help clients track a technology’s maturity and future.
Gartner’s Hype Cycle has been around since 1995, becoming an institution in the tech industry. While it can help Proptech executives in decision-making, not everyone thinks Gartner’s methodology is valid. Let’s examine the Gartner Hype Cycle, looking at what it is and the critiques against it.
What is the Gartner Hype Cycle?
The Gartner Hype Cycle isn’t difficult to understand. The relative simplicity of the process is perhaps why not everyone is a true believer in it.
The Hype Cycle claims to provide a conceptual presentation of the maturity of emerging tech through five phases:
- Technology Trigger. A breakthrough kicks things off. Investment rushes in, startups form, and media interest trigger publicity. There’s usually no usable product, and commercial viability is largely unproven.
- Peak of Inflated Expectations. The hype is intense, and while there are stories of early success, there are also scores of failures. Some firms jump on the bandwagon, but many are still cautious.
- Trough of Disillusionment. At this low peak, interest wanes as experiments fail. Investment in the innovation continue only if surviving producers improve and tweak the products.
- Slope of Enlightenment. Conservative firms remain cautious, but more examples of the innovation’s benefits become widely understood. Second- and third-generation products appear, and the technology progresses along the maturation process.
- Plateau of Productivity. It’s at this point that the innovation has gone mainstream. Criteria for assessing the benefits are more clearly defined, and the tech’s market applicability and relevance are paying off. If the innovation serves more than a niche market, it’ll continue to blossom.
Gartner uses this template - with an accompanying chart - to track the progress of various emerging technologies. Some Hype Cycles are publicly available, while others are behind a paywall. Gartner markets the research as a way for executives to educate themselves about emerging tech's promise and evaluate their risk appetite.
Should a Proptech leader make an early move on an emerging innovation? Is there a more moderate approach to take? Or should they wait for further maturation? With the Hype Cycles, Gartner claims executives can use them as a decision-making tool and answer these questions.
Criticisms of the Hype Cycle
Many see Gartner’s Hype Cycles as useful, but not everyone. Numerous criticisms have been lobbied against the methodology, and not all have been polite about their arguments.
Author and business consultant Tom Goodwin took a jab at the Hype Cycle in one popular 2023 LinkedIn post, saying, “Just a friendly reminder that the Gartner Hype Cycle is a complete waste of time.” While more of a rant than a data-backed critique, Goodwin notes that most technologies rarely follow the path laid out in the Hype Cycle, many transformational techs have never been on a Hype Cycle, and many of the emerging innovations that have been tracked haven’t proven transformational.
A more thoughtful analysis of the Hype Cycle comes from a 2016 post from Michael Mullany, a Venture Partner at Icon Ventures. Mullany thoroughly studied two decades of Hype Cycles from 2000 to 2016 and drew eight lessons from his research. The main conclusion was, quite simply, that none of us are good at predicting the future, and neither is Gartner.
A couple of key lessons from Mullany’s research include:
- Lots of promising tech just dies. By Mullany’s count, roughly 20% of all emerging tech tracked by Gartner for multiple years became obsolete before reaching mainstream success.
- Many innovations fly under the radar. Mullany notes there were many significant technologies that Gartner either identified late or never appeared on a Hype Cycle. He lists some of these innovations as Open Source, non-SQL-based databases, and x86 Virtualization.
Sifting through the noise
Gartner’s Hype Cycle has staying power in the tech industry, and it’s viewed as a valuable tool for many. Despite some criticisms, the Hype Cycle is a (mostly) effective method for tracking the maturation of emerging tech in Proptech or otherwise.
Many emerging technologies come with inflated expectations, and, as the Hype Cycle mentions, there tend to be periods of disillusionment. The risks and rewards of early adoption can be massive in some instances, so a method like the Hype Cycle helps discern whether to remain cautious or take the gamble.
Does that mean the Gartner Hype Cycle gets it right in every instance? Definitely not. But few of us are good at predicting the future. The Hype Cycle isn’t a crystal ball, but in most cases, it provides a framework for sifting through the noise and speculation of promising technologies that emerge each year.