Why do good things always get a bubble in the beginning?
Web came with its bubble. Then online advertising, blogs had their bubbles, after that mobile marketing, now it’s time for the social media bubble. But if you look at other things as well, (say Private Equity, Mortgage or whatever you want) there is always a bubble associated with good things. Gartner names these bubbles politely “the hype curve”. Every technology or innovation gets “over hyped” in the beginning. But why are there bubbles always?
The answer is simple;
- First because the landscape of emerging technologies is very suitable for bubble blowing (there is plenty of air in the atmosphere),
- Second there are bubble blowers everywhere.
I. The landscape of emerging technologies
Let’s look at the landscape first. Three major dynamics of the landscape for emerging technologies / sectors are;
1) Businesses and staff (buyers, investors, media, sellers etc.) are under extreme pressure to act quickly
2) People involved in decision making don’t have solid experience & knowledge on the topic
3) Measurement issue is not solved yet
Some important groups which are affected by these dynamics can be found below;
- Buyers (Business executives and decision makers who make the purchase of the emerging services / products)
- Investors (VC &PE funds who don’t want to miss out a big opportunity, who are rushing quickly after the most visible / most revenue generating model rather than the most value delivering)
- Media (Reporters who are after a nice and early story, who have to be quick in finding an example on the topic)
- Sellers (Entrepreneurs & inventors who are working in the emerging sector)
Mostly, all the members of these groups want to be the number one in a new area, not the follower. They need to act quickly to gain a competitive advantage and not to miss an opportunity. In this environment, competition and speed creates very high pressure which is working against the new sector.
It is impossible to invest time in getting a deep knowledge on the topic. At this pace, it is day-dreaming to expect the media, the VC/PE industry and business executives to be on top of the issues.
The third dynamic; that there is lack of measurement, is the icing on the cake for the bubble blower. The con artist or fool is no different to the eye of these groups than the value creating person. The success stories of “bubble blowers” are as great as their selling skills. These stories are mostly not on real value delivered, but unfortunately the lack of measurement helps them to smear their story with fictional returns.
Because of these three dynamics, an early stage sector is the best landscape for people and companies with selling capabilities, rather than delivering capabilities. I am sure most of the executives, who have been in business for a while, lived through endless examples of very successful bubble blowing implementations in many their sectors.
II. Bubble Blowers Everywhere – Who are they?
These are “smart” people in every sector who build their businesses on the hype curve. It makes financial sense to sell to people, who don’t know what to expect. Either excite them unrealistically, or make them afraid that they are losing an opportunity against their competitors and they will be eager to jump in your wagon. Also the dynamics of early stage technologies and sectors are very suitable for a lot of people to fall into “bubble blowers” trap.
I call these smart people simply; “bubble blowers”, the people who put their business model on the early “over hype” of the technologies / sectors. They sell to people with not much knowledge by exciting them unrealistically and making them fear. The bubble blowers usually sell their products/services like hot cakes in the early days of a new technology.
However, one thing we need to understand very clearly is the difference between genuine marketing and sales efforts from “bubble blowing”. Also, it is important to understand the motives of these bubble blowers. When we look at their aspirations; there are three types of bubble blowers;
1) The con artists, who are just there to make a quick win by fooling people
2) The fools, who try to build a business, but think that the only way they can be successful is by misrepresentation, exaggeration and bubble blowing
3) The capable, the true genius people who have both the skills to contribute to society and to excite the society with their selling skills
The con artists are the worst. Their business models are not a sustainable, respectable or ethical way of doing business. At the end, they are usually not as successful as the “fools” business model who at least tries to deliver after their promise.
I have sadly seen many capable entrepreneurs, who thought that bubble blowing for a while for competitive advantage was their only chance. If you are in entrepreneurs’ shoes, there is always a big pressure before reaching a tripping point. However, the belief that “bubble blowing” is the only way is actually working first against their company, second against their sector, third against themselves & their careers. What “fools” don’t unfortunately get is; the way they act in their sector is both hurting them and their emerging sector in a big way by creating confusion and destroying trust.
The capable is really a tiny fracture of the population. These are one in a billion types of people (like Steve Jobs, Mark Zuckerberg, etc.) who have both capabilities together. It is really rare to see people like them in the business world. In these cases bubble blowing can work positively to society where these people excite the society, so that there can be more investment poured to an area which will create value for the society in the end. So to say the proceeds of the “bubble blowing” are used in a good way to create real value.
Note: This was an article that I have written last year, but never have published. With the sad death of Steve Jobs, I remembered this unfinished piece and wanted to share…