When I look around the business landscape right now, most notably on my LinkedIn feed, I feel like I’m watching a movie I’ve seen many times before.
A few weeks ago, I wrote about how generative AI is poised to cause rapid changes to many aspects of how we work and live over the next few months and years. Given AI’s potential, it’s not surprising to see it talked about constantly in the news and across social media, to the point that it often feels like the only topic of conversation.
As is common with many technological advancements, the genuine excitement for something new often attracts a group of vocal “maximalists.” These individuals display excessive enthusiasm, audacious predictions and hyperbolic language—as well as massive Twitter threads—insisting that the new technology will revolutionize the world immediately and will become the ultimate solution for all facets of life.
The problem with the maximalist narrative is that it conveniently overlooks the challenges, complexities, regulatory considerations and time required for any innovation to be integrated into existing systems. While a maximalist’s optimism can spark interest and drive progress, the tendency to overlook challenges and complexities results in unrealistic expectations and a distorted view of the market.
For example, remember that barely eighteen months ago we were in the middle of feverish speculation about Web3, Blockchain, Cryptocurrency and NFTs. Investment capital was pouring into this vertical as many of the maximalists and “Crypto bros” trumpeted bold predictions. These included proclamations that Bitcoin was going to $1 million and should be the majority of your investment portfolio, that traditional banks should not be trusted with your money, and traditional, or fiat, currency would quickly cease to exist.
These same people also said that if you were an engineer and not working on Web3, your job would be extinct momentarily.
While Web3 technology has promise that may still be realized, had you followed the maximalists blindly, you likely would have lost a majority of your savings and possibly changed your career and found yourself facing a layoff.
The reality is that new innovations, even disruptive ones, tend to follow a very predictable pattern and adoption curve.
- A small group of people and companies work on the new innovation before it’s really understood by the masses.
- The new innovation begins to get traction and more people start to gain interest in the space.
- A few early players launch products that wow the market and catch incumbents off guard. As others start to feel FOMO, there is a rush to catch up and the hyperbole begins.
- Money pours into the space, and people and investors lose their objectivity. This is when you start to hear that “it’s different this time,” as a host of unprofitable and unsustainable businesses chase market share and compete against each other.
- Everyone you know is talking about this new technology. It feels like all you hear and read about, and you start to fear that everyone is getting rich but you.
- The space quickly gets overfunded and competition gets fierce. The realization also sets in that there is a difference between cool technology, or an exciting free product, and a sustainable business model.
- The market crashes, wiping out about 90 percent of the players as investors run for the exits.
- Slowly, the market begins to sort out the long-term winners and applications. Companies refocus on applications of the new innovation that can result in a profitable, sustainable business.
Those of us who remember living through the Dot Com Bubble recognize this exact pattern. Yes, the internet has changed our lives; however, I remember hearing from Dot Com maximalists that paper would cease to exist and that any company that didn’t sell online would be out of business within a matter of years. The last point is especially ironic given that selling online today is harder than it’s ever been, and catalogs are still going strong.
We sit today at the juncture of many exciting new technologies that have the potential to usher in significant and lasting change, including AI, Web3, Blockchain, Crypto, and the Metaverse. These innovations will likely change how we live and work. At the same time, however, it’s crucial to recognize the hurdles and complexities needed for global adoption and the eventual necessity of sustainable business models.
By ditching the hyperbolic, maximalist lens and embracing a more grounded perspective, we will be better suited to unlock the potential of emerging technologies. Perhaps more importantly, we will also be cognizant of the challenges of adoption, and hopefully avoid falling victim to the scammers and opportunists who always emerge to profit from the maximalist approach.
Quote of The Week
“History never repeats itself, but it does often rhyme.”