Since college, I have been involved in the business of developing and marketing high-tech products. I’ve learned from some of the best marketers—and some of the worst—so writing about emerging markets is a trip down memory lane. I’ve seen technologies such as fiber optics, digital telecom, personal computers, the internet, cellphones, smartphones and much more become the emerging market du jour.
But the bottom line of emerging markets is figuring out what ones are real and what are all hype. I’ve recently been subjected to nonstop talk about tech such as 5G, cryptocurrency and artificial intelligence (A.I.) that turns out to be much more hype than reality.
The Law of Hype
In Chapter 20 of “The 22 Immutable Laws of Marketing,” authors Al Ries and Jack Trout discuss their “Law of Hype”: “For the most part, hype is hype. Real revolutions don’t arrive at high noon with marching bands and coverage on the 6 p.m. news. Real revolutions arrive unannounced in the middle of the night and kind of sneak up on you.”
In recent history, the best example of hype is 5G wireless communications. Two or three years ago, the news media was filled with stories of how 5G wireless was going to revolutionize wireless technology and society in general. The speed of 5G would make fiber to the home obsolete.
What do we have today with our 5G phones? Well, sometimes we get faster download speeds, but we also have spotty service, less battery life and higher bills to foot the estimated $200 billion cost of building a new cellular network.
I’ve tried unsuccessfully several times to get a 5G home internet service. 5G does have good points, but mostly it was an incremental improvement over 4G/LTE. It was also inevitable, since the urge to upgrade electronics to go faster is universal and the cost continually declines.
Today, the “king of hype” is A.I. I won’t bore you with my opinion, although I went to a seminar at MIT Media Lab about A.I. around 1990 and have been waiting ever since. And I hope you didn’t lose too much on cryptocurrency.
The real thing
So how do you separate the hype from the real thing? I refer you to the quote from Ries and Trout above. Things that offer real and useful advancements in technology often seem quiet and boring. When AT&T, British telecom and NTT in Japan began experimenting with fiber optics for communications in the late 1970s, the news and discussions were mostly limited to the telecommunications and physics communities.
What made the difference with fiber optics and most other successful emerging markets is simple: economics.
Fiber is an excellent example of economics driving new technology. It was introduced at a time that telecommunications traffic was growing fast. AT&T had developed the digital phone system, which could multiplex more data into the same media, but each of their available transmission media, copper phone wires, coaxial cable, microwave wireless and communications satellites had insufficient bandwidth. When fiber was first introduced, it offered 100 times more bandwidth and almost that much of an increase in distance capability.
At the same time, integrated circuit manufacturers introduced ICs that could convert phone signals from traditional analog voice in wires to digital voice for fiber at a fraction of the cost of then current electronics.
Practically overnight, transmitting digital data over fiber cost only about 1%–5% as much as transmitting data on traditional media. The fiber optic revolution was born.
Over the next decade, new technologies were quietly introduced in fiber optics at a fast pace. Single-mode fiber, ceramic ferrules for connectors, more powerful lasers, faster electronics and numerous other innovations were introduced and accepted immediately because they improved the economics of fiber optic networks.
Of course, fiber optics became the enabling technology for other innovations, like the internet, CATV and cable modems, cellular communications and more. Those technical innovations were successful because they created new business opportunities—that’s economics again.
Technical innovation alone cannot create a market unless it solves a problem and has a viable economic impact. I remember a speaker at a technical marketing seminar made the point that the old adage: “Build a better mousetrap and the world will beat a path to your door” isn’t always true. “What the world wants is not a better mousetrap,” he said. “It wants fewer mice.”
stock.adobe.com / Hanna Syvak / Udayakumar