Hype Cycles

The technology maturity hype cycles of 2009 from Gartner were just released. Since working as a consultant during the boom years around Y2K the hype cycle model has fascinated.

It is such a simple way to chart a very complex phenomena and convey a smart insight at the same time.

Highlights this year is that cloud computing and e-book readers are at inflated exceptions and are about to crash. Another assertion is that microblogging services like Twitter/Facebook are about to crashing this instant due to spam and noise. Wikis on the other hand are on the return.

Gartner might be right about their predictions and they are probably wrong on several as well, but that is not the only point. Thanks to this model, discussions start and new ideas pop up. Sit down and design your own hype cycle it in your business area, and its almost magical how the pieces fall into place and insights start to flow.

Access to more info at: http://www.gartner.com/it/page.jsp?id=1124212

The Vital Few or the Trivial Many?

When the Pareto Principle [1] was popularized within business and engineering in the 1940s by Dr. Joseph Juran, he called his theory "The Vital Few and the Trivial Many" [3] : A few vital inputs produce most of the results. For many years now that has been how we are taught to prioritize ideas and activities in business. However, thanks to the Internet, the Pareto Principle is being falsified [4] in various domains.
The insight comes from power law theory [2]. As one can see in the figure to the right (from wikipedia) , a power law distribution can be split into a vital few (the green area) and the trivial many (the yellow). What is happening for many products and services sold via the Internet is that demand is shifting down the tail - making the tail fatter and the head slimmer! According to [5] there are 3 reasons for this:

1. Cost of production of many products from music and books to Internet services is falling, thereby creating more available products in the tail.
2. Cost of inventory and distribution is falling though JIT production, digital content and application hosting. The marginal cost of one more product ore product feature in the inventory is extremely small, making it profitable for low volume sales of one item.
3. The Internet and it's search engines and communities are creating new ways for consumers and businesses to find more specialized products and solutions that fit their exact tastes and needs.
   

This insight is rather extraordinary because it shows that lucrative business opportunities exist where there was said to be none. Furthermore, there are signs that the profit margin is larger and the competition smaller at the tail per unit than at the head. Sounds like faster money to me!

[1] The Pareto Principle
[2] Power Laws and Long Tails
[3] The Vital Few and the Trivial Many (external)
[4] Falsifiability (external)
[5] The Long tail (exteral)