HomeTechnologyThe Role of Hype in Technology

The Role of Hype in Technology

It is often the case that hype and absurdity go hand in hand. As excitement about a new technology builds, people scramble to get on board. For example, a few years back, the “metaverse” was all the rage, with companies even appointing chief metaverse officers, and futurologists talking about web 3.0. Although the concept is still around and in the news (the first metaverse court case was held in Colombia recently), the hype has lessened somewhat. As an example, Microsoft recently disbanded its industrial metaverse team, and the career prospects of chief metaverse officers are somewhat uncertain.

Other technologies have similarly suffered from the hype cycle. For a time, blockchain, crypto, and non-fungible tokens were at the center of attention, yet now, users, investors, and managers have shifted their focus to artificial intelligence (AI). ChatGPT, a popular AI chatbot, recently gained further hype after its public release in November, with over 100 million people asking it to rewrite IKEA furniture instructions (among other things), while venture capitalists pour money into AI startups, and established firms race to explain how they will use the tech for a range of functions from coding to customer service.

Although hype can often lead to disappointment, it needn’t always end in such a fashion. Some technologies are less speculative than others; for instance, AI is much more established than the metaverse. Moreover, even when bubbles do burst, they can leave only world-changing companies in their wake.

While such hype can help entrepreneurs unlock funding and attract users, it can simultaneously elicit problems. For example, one temptation for entrepreneurs is to overpromise and even deceive potential funders. Research on initial coin offerings (ICOs)—a once-hot field for new cryptocurrencies—in 2021 by Paul Momtaz of UCLA Anderson School of Management found that issuers would systematically overplay their tokens’ potential. These exaggerated claims often raised more money in less time than honest ones, and while ICOs are no longer as hyped as they once were, investors still fall prey to similar tactics (over 100 new cryptocurrencies were created with ChatGPT in their name).

While exaggeration can be a logical strategy if an entrepreneur is only raising money once, it may prove to be a liability if they plan to create a business, tap capital in multiple funding rounds, or maintain a strong relationship with investors and users. The risks here are varied, from damaged credibility and disappointment if promises go unfulfilled, to reducing the overall room for pivoting to a new product or business model by being too closely associated with a specific technology.

Therefore, hype calls for careful management. A recent paper by Danielle Logue of UNSW Sydney and Matthew Grimes of Judge Business School looked at different social-investment stock markets that were set up in 2013 amidst growing buzz around impact investing. The authors

Sara Marcus
Sara Marcushttps://unlistednews.com
Meet Sara Marcus, our newest addition to the Unlisted News team! Sara is a talented author and cultural critic, whose work has appeared in a variety of publications. Sara's writing style is characterized by its incisiveness and thought-provoking nature, and her insightful commentary on music, politics, and social justice is sure to captivate our readers. We are thrilled to have her join our team and look forward to sharing her work with our readers.


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