Hype Curve

In 1995, Jackie Fenn — an analyst at Gartner — published a research note that introduced a visual framework for tracking how new technologies evolve in public perception. She called it the Hype Cycle. The shape was distinctive: a sharp rise, a dramatic peak, a steep crash, a slow recovery, and a final plateau. The curve did not describe the technology's actual capability. It described the gap between what people believed the technology could do and what it actually could do at any given moment. That gap — the delta between expectation and reality — follows the same pattern for virtually every transformative technology in modern history. And the pattern has not changed in thirty years.

Five phases. The Innovation Trigger is the moment a technology becomes publicly visible — a breakthrough paper, a product demo, a provocative headline. The technology is real but immature, and the earliest adopters begin experimenting. Then comes the Peak of Inflated Expectations, where media coverage, venture capital, and public enthusiasm push expectations far beyond what the technology can currently deliver. Everyone is talking. Few understand the constraints. The third phase is the Trough of Disillusionment — the crash that follows when reality fails to match the hype. Early products underperform. Startups fail. Media coverage turns negative. Investment dries up. The technology is now unfashionable. The fourth phase, the Slope of Enlightenment, is the quiet period where serious builders do serious work. Products improve. Use cases clarify. The gap between expectation and capability narrows. The final phase is the Plateau of Productivity — where the technology delivers genuine, sustainable value to a broad market. Not the utopian vision from the Peak. Not the despair from the Trough. Just real, compounding utility.

The pattern repeats with almost mechanical regularity. The internet followed it: peak hype in 1999, trough in 2001–2003, plateau by 2005–2010 as Google, Amazon, and Facebook built businesses on the infrastructure the bust had left behind. Blockchain followed it: peak in late 2017 as Bitcoin touched $20,000 and ICOs raised $5.6 billion, trough through 2018–2019 as 90% of tokens went to zero, with stablecoins and enterprise blockchain emerging on the Slope of Enlightenment by 2020. Virtual reality followed it: peak in 2016 when Facebook acquired Oculus and VR was declared "the next computing platform," trough in 2017–2019 as consumer headsets gathered dust, slope emerging in the early 2020s through enterprise training and surgical simulation. And AI — specifically generative AI — entered its Peak of Inflated Expectations in 2023 when ChatGPT reached 100 million users in two months and every company on earth declared itself "AI-first." Whether the Trough has arrived by the time you read this sentence depends on when you are reading it.

The framework's sharpest insight is not the shape of the curve. It is the investment implication. The Trough of Disillusionment is where the best opportunities emerge — precisely because most investors, most media, and most corporate buyers have moved on. Amazon was trading at $6 in 2001. Bitcoin was at $3,200 in December 2018. The technology had not changed. The expectations had collapsed. The founders who kept building through the Trough, and the investors who kept funding them, captured the value that the Peak's tourists had abandoned.