When the Hype Bubble Turns to Indifference

As part of the generation that grew up through a series of hype cycles - from clacker balls through Deeley Bobbers and Rubik's Cube to iPod and on to iPhone and iPad I have an observation.

Hype and hysteria always peak and then turn to indifference - leaving the former hype subject to a few enthusiasts.

Here in the UK, Line Dancing was once the most popular exercise for millions with classes and events advertised everywhere. Now there a few thousands of loyal people continuing to enjoy their hobby and the hype grazers have moved on to other passions.

So, why do people move on? Will the current Apple hype cycle peak and burst?

Consumer based hype cycles are nothing to worry about - the vast majority of the people who are sucked in to the wave of hype and part with 2 to 3 times the price of a nearest competitor can afford it.

What about the hype cycles that spawn thousands of small businesses though? Where honest hard working people are sucked in to packing in jobs and re-mortgaging houses. Magnets, herbs, creams, solar panels - there are countless examples.

If you are considering a business based on a hype trend, it pays to think carefully before you bet your financial security on it. You need to look at the people who are desperate for you to buy a franchise or a license. Where do they make their money? Is it from selling you an expensive license or initial stock? Or is it from your long term success? Take advice. Listen to Accountants, Business Advisers and to your bank. Business professionals have seen these things many times before - they cannot make your decision for you but they can at least make you really think through the realistic potential of your business dream.

The only people who make money out of hype cycles are those at the beginning and those at the top.

When a hype cycle turns to indifference, make sure you are not left with a garage or industrial unit full of Deeley Bobbers (or the 21st century equivalent).

And there are some lessons for large firms too. In many industries, it has become fashionable to surf a wave of hype. Voice communications was all about IP 8-10 years ago. Now it is on the Unified Commmunications hype bubble. Electronic security systems are in the middle of their own IP wave. In each case, some of the products aligned to the hype bubble are warmed-up versions of previous generation products with a few extra features and an expensive re-brand. Intelligent buyers can see through these distractions. Be careful not to alienate your customer base - especially if your products are not quite "hype ready" - or whatever the term is in your industry.