htype and Ridiculous to go with. As excitement mounts for the next big thing, people are desperate to get in on it. A year and a half ago, the Metaverse was the future. Companies appoint chief metaverse officers, and futurists chatter about web 3.0. The idea didn’t go away. Columbia held its first lawsuit in the metaverse last month (imagine a video game called Wii Justice and you’ll get the picture). But the excitement has evaporated, at least for now. Microsoft disbanded its Industrial Metaverse team last month; the career prospects of the Metaverse Chief are more virtual than they’d like.
Other technologies have suffered the same reversal. There was a time when it was all the rage to praise blockchain, cryptocurrencies, and non-fungible tokens. The attention of users, investors, and managers is now firmly locked on artificial intelligence (artificial intelligence). Since the chatcommon technologyone artificial intelligence After the chatbot opened to the public at the end of November, it created another wave of hype.More than 100 million people asked for it to be rewritten ikea Furniture instructions for iambic pentameter or something equally important; VC funds are pumping money artificial intelligence Startups; established companies scrambled to explain how they would use the technology for everything from customer service to coding.
Hype doesn’t have to end in disappointment.Some technologies are less speculative than others; for example, the Metaverse remains largely conceptual, while artificial intelligence is an established field. Even when the bubble bursts, they could leave world-changing companies behind. The hype cycle popularized by consulting firm Gartner is real. Essentially, it describes a period of unchecked enthusiasm for new ideas followed by a backlash.
That makes the entrepreneurial hype bittersweet. Excitement can help unlock capital and attract users. Some see hype as a public good, essential to pushing new technologies forward. But it can also cause problems. The question is how best to manage the hype.
An obvious temptation for entrepreneurs is to capitalize on the hype by making wild — even deceptive — hype. A 2021 paper by Paul Momtaz UCLA The Anderson School of Management examines the once-popular field of initial coin offerings (icons), where new cryptocurrencies are issued directly to the public. Mr. Momtaz found that not only were issuers systematically inflating the promise of their tokens, but investors were being duped as a result. Exaggerated claims raise more money in less time than accurate ones. Initial Coin OfferingThere is far less hype around s these days, but the opportunity to dupe investors apparently still exists: Over 100 new cryptocurrencies with Chat capabilities have been createdcommon technology in their name.
If an entrepreneur is only raising money once, deliberate hyperbole can be a perfectly logical strategy. But if they want to start a business, secure funding in repeated funding rounds, or maintain close relationships with investors and users, the hype can become a burden. Some of the dangers are obvious: disappointment and damaged credibility if things don’t turn out as promised. Other dangers are more subtle: Being too tied to a particular technology reduces the space in which startups have to pivot to new products or business models.
So hype needs to be careful.A recent paper by Danielle Logue University of New South Wales Matthew Grimes of the Sydney and Judge Business School examines the different paths taken by the many social investment stock markets launched in 2013 as the impact investing boom took hold. The authors contrast the glitzy approach of the London Exchange, which attracted high-profile backing, promised a financial revolution and subsequently collapsed, with its more successful Canadian counterpart, which relied more on expert advice and incrementalism.
The pros and cons of hype have also been seen in Chat’s short public lifecommon technology. The hype helped it become the fastest-growing consumer technology in history. But the technology’s flaws are now attracting just as much attention. Microsoft integrated an enhanced version of the chatbot into its Bing search engine, limiting access to the new version and limiting the number of questions users can ask in a row (an idea well worth adopting in all conferences). As Grimes Entrepreneurs marketing a brand new product should distort reality without unduly inflating expectations, as Mr. How they handle the hype helps determine whether they can pull off this difficult balancing act. ■
Read more from Bartleby, our columnist on management and work:
The ability to keep a low profile has both advantages and disadvantages (February 23)
Why It’s Time to Film Coffee Sessions at Work (February 16)
The Pitfalls of Loving Your Work Too Much (February 9)
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