Hype trains are built to, eventually, crash.
Think about companies like Theranos, WeWork, and FTX. Once touted as examples of innovative and breakthrough companies, have now been exposed for being utter nonsense. Digital freight startup, Convoy, suddenly announced that they are shutting down operations. Once a magnet for VC money and high-profile investors, their lack of understanding of the volatile nature of the freight market doomed them from the get-go…but of course, they were the next big thing in freight.
In sports, Deion Sanders was built up to be the greatest thing to ever happen to college football. Although he is an incredibly gifted and charismatic athlete, his team’s performance has popped their hype bubble.
It wasn’t that long ago when retailers were clamoring about the metaverse. That hype train fizzled out in short order. Now the rage is about AI and how it will transform businesses.
Christopher Mims of The Wall Street Journal wrote in an article earlier this year that “The financial incentives to hype a new technology never change, nor does our tendency to both fear and celebrate whatever is the newest, shiniest product of our civilization’s ever-growing expenditure on research and development.”
Emotionally, we are hard-wired to jump on the hype train. There is much to be said about the power of FOMO and the excitement of solving problems with a silver bullet (think about those late-night infomercials). Moreover, if we are ever confused as to what force is propelling the hype train, remember that the answer to that question is usually money.
It takes discipline to stay off the hype train. But, at least you won’t be taken for a wild ride.