The graph above represents the Hype Cycle, as devised by a Gartner Group analyst, Jackie Fenn. It indicates what happens when a new technology is introduced to the market. The pattern has been around for years but people always believe it won't happen to their product or their preferred technology. There are always a few people who break the rules though.
I remember in one Letter from America Alistair Cook likened the dot-com boom to the railway boom of the 1800's. The same things were said about both, that there were tremendous riches to be had for little risk, that there was new money to be generated. So the investors poored in. Al you needed was a .com address and you could secure millions in venture capital.
At the height of the dot-com bubble (or the Peak of Inflated Expectation) there were fledging internet companies with stock market valuations higher than Wal-Mart. Companies which sometimes didn't even have a product and which were running at huge losses. I remember at one point companies changing hands with valuations based on the number of registered users on the site, each user being valued at $1,000. Come on, be serious, even Amazon doesn't make that much from each customer. Now we've moved on. E-commerce has moved into the Plateau of Productivity but every day some new idea comes along to start it's path along the Cycle.
The Blogosphere is an interesting example of the Hype Cycle. You could plot one Hype Cycle for the blogoshpere as a whole, but you could also plot one for each blog hosting service, and one or each blog itself.
Where would you put yours?
I think I've rapidly passed the Peak of Infated Expectation and am currently heading down to the Trough of Disillusionment.
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