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Bubble by Bubble, Brick by Brick
Bubbles don't change the world; building blocks do (and bubbles pop)
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We're living in a wild time. Computers are becoming super smart. The lines are blurring between our physical and digital worlds and identities. New trends go from zero to extreme hype in no time. And it's all happening everything everywhere, all at once.
Hype focuses on fleeting "bubbles," not enduring "building blocks" that drive real innovation.
Common misconceptions fuel fear and hinder acceptance and understanding of new technologies.
Generative AI, blockchain, and the immersive web are interconnected, forming a new internet layer.
People often overestimate short-term tech impacts but underestimate long-term effects.
Avoiding hype requires discerning information consumption and fostering curiosity.
As the world moves faster and faster, and new hype bubbles come and go, it's easy to lose track of what's happening. And miss the big picture. This is further complicated if the information we receive as inputs is insufficient.
This is often the case with much of the media attention; it's polarized and shallow.
It forces a focus on hype bubbles and the pop. But there needs to be more focus on, and more understanding of, the building blocks that those bubbles leave in place when they burst. That's the exciting part.
Let's explore some disturbances that prevent us from seeing the bubble-burst-building block picture. The fog of hype, if you will.
It's essential to have the proper framing, especially given some of the emerging technologies at play right now and the interplay between them.
Put differently, it's essential to acknowledge and distinguish between bubbles, pops, and the sustaining building blocks.
The three technologies I'll orient this post around are
Crypto and blockchain
Metaverse and immersive web
Let's get to it!
The Most Famous Bubble
The most famous technology bubble in recent history is the dot-com one. When it burst, many people thought the internet was done for. The graph below shows how wrong that notion was. In fact, all five of the most valuable US are technology companies that persisted through and thrived after that bubble burst.
You've probably seen the Gartner Hype Cycle, the graph that aims to explain how new innovations often progress along the same story arc. It can be simplified by adding bubbles, pops, and building blocks.
While Generative AI is between bubble and pop, blockchain and Metaverse currently sit at the building block point. The bubble and its pop is fast, wild, and exaggerated. Makes for great content. The building block phase and beyond is slower, inching forward. Less sensational news, more genuine progress.
We're in for a convergence of all three of these three technologies that, in sum, will be at least as powerful as the internet itself. But many companies, and thus, many companies will miss out on vast opportunities along the way. Because they re-engage too late.
Fear and Loathing in the Metaverse
We learn about and try to understand new things, like technologies, based on inputs we receive and process. What we read online is an important source of information. This sometimes creates a challenge when the incentive for many media outlets is generating clicks. This leads to reporting that over-indexes on fear, despair, and ridicule. It makes headlines that punches through.
And so, that's the content we consume, which creates our foundation for understanding the technology.
"Mark Zuckerberg kills the Metaverse."
"Crypto is over."
"AI will take your job."
And so on.
I regularly have conversations with people around me that confirm that the bubble-first media narrative shapes people's general understanding of the topics at hand. And it's understandable, too. We are discussing highly technical innovations here.
With innovation, it's usually much easier to see and understand what it destroys than the opportunity space it opens up.
Economist Joseph Schumpeter introduced the concept of creative destruction.
It's sometimes necessary to get rid of the old to make room for the new.
That can be harsh, both in theory and in practice. But it's a cycle that's paved the way for progress and economic growth.
Here are two examples of how we saw creative destruction for the destruction only, not for the creation.
When the loom first arrived in England in the nineteenth century, textile workers formed a movement protesting against the introduction of machines. Instead, the looms introduced production efficiency and growth. It also enabled textile workers to work in other roles like machine operators, designers, etc.
The people of this movement were called "Luddites," which today refers to people opposing new technology.
The next example is more recent: Computers replaced the job of typesetters. It was easy to see beforehand. It was much more challenging to imagine all the new jobs enabled by computers. Software engineers, interface designers, product managers, and so on. And, as we discussed earlier, the combination of computers and the internet birthed some of history's most valuable companies.
These stories also describe a common fallacy: Lump of Labor. It's the assumption that there is a "lump sum" of work to be done. If we introduce too many workers, or worse, machines to do that work, people will be out of work.
History has already shown us that it is not valid. Yet, it's still a trap that many people fall into. It's a big part of the current discourse around Generative AI's impact on society.
It's Not Zero-Sum
The next fog machine is the (mistaken) assumption that technology innovations are zero-sum. Either blockchain, the Metaverse, or generative AI will change the world. Or none of them.
Headlines like ""Crypto is over, here comes AI" fuel this narrative.
The reality is much more nuanced. Some innovations definitely replace previous ones (creative destructions). Other times, several innovations evolve in parallel at the same time. And sometimes, these are compatible with each other. They intertwine, augment, and amplify. This is the case for the three we're discussing today.
It's crucial to understand if, when, and how things connect. To understand the difference between zero-sum and positive-sum innovations.
In the context of Generative AI, blockchain, and immersive web, think of it like this:
Generative AI augments the creation layer of the internet. Higher quantity and quality of content.
Immersive web: creates a new presentation layer of the internet. Higher fidelity, more flexible, and three-dimensional. VR/AR/XR will likely further accelerate this layer in the coming years.
Blockchain: infrastructure layer to efficiently govern, orchestrate, own, authenticate, and verify creations and digital assets. Something that will become increasingly important as the amount of content increases and the amount of people making a living off the internet does, too.
The third and final fog machine of the day relates to timelines. Mistaken timelines.
The world doesn't change overnight. But we still live in a fast-paced world. Our expectations increase, and our patience decreases. So when somebody introduces a "new thing" that will do "great things," if it doesn't tomorrow, we deem it a failure. And move on.
Futurologist Roy Amara put it best:
People tend to overestimate the short-term impact of new technologies while underestimating their long-term effects.
The impact of a new technology often follows an exponential curve. Which is to say, it moves very slowly at first, then it accelerates. The inflection point is sometimes called the "Knee of the Curve."
Our impatience leads us to dismiss the innovation before it hits the knee of the curve.
In practice, this impatience and expedited conclusions turn into headlines. These two are eerily similar, while more than 20 years apart
It's funny how one of these articles was published via the innovation the other article deemed a failure.
It is also funny, or at least interesting, that the Business Insider article above hit the internet around the same time as Roblox and Fortnite (the most Metaverse-like online experiences of today) were posting record user numbers. Oh, well.
Overcoming the Fog of Hype
The fog machines will continue to do their thing. If you want to understand the fundamental progress of technology and the opportunities it creates, you have to go beyond the fog.
More than anything, it requires genuine interest and willingness to invest time. Eventually, these innovations will form fully, become productized, and easier to understand. But the process of traveling the distance from now to that destination is the most exciting. So buckle up.
Three tactical tips to pass through the fog:
Filter the information you consume. Go beyond the shallow mainstream stuff.
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Be curious all the time.
Optimists look naive, pessimists look smart. But, only one type of people moves the world forward.
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