Noah Brier | February 17, 2022

The Tech Hype Edition

On tulips, NFTs, and the boring middle

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Noah here. A few weeks ago WITI contributor Rick Webb wrote about tulips, NFTs, and what happens to much-hyped technology. While we look back on Tulipmania as a story about market bubbles, there’s another conclusion to be drawn:

But it feels like history is telling us something different: that we still have tulips. The Beanie Baby market on eBay is still very active. There is still a giant amount of “wash trading,” sketchy $20k+ sales of beanie babies with one bid that is obviously fake. But there are still thousands of Beanie Babies being sold with 30, 40, 50 bids in the $100-200 range. … I’m saying that there’s sort of a bored, banal version of Perez’s Technological Revolutions and Financial Capital, where there is no revolution, no huge financial disruption (after the bubble pops), and just… Beanie Babies. Comic Books in those plastic shells still managing to fetch a hundred bucks if you’re lucky. Tulips at the grocery store. Boring shit, not especially positive or negative on society. Just a thing that keeps going, middlingly, through sheer capitalistic inertia.

He goes on to say that in his eyes the most likely path to NFTs is neither that they’ll die off or live up to their hype, but that they’ll just become a thing. A kind of boring thing like Beanie Babies, Magic Cards, or all those comic books in my parent’s basement.

Why is this interesting? 

There’s something wonderfully simple about Rick’s theory and it reminded me of another idea about how to predict the future from the physicist Richard Gott. Also known as the Lindy Effect, the basic idea is that if you want to predict how long a company, product, or building will be around the quickest calculation would be to say it will be around for however long it has already existed. So if a company is ten years old, it will likely make it to twenty or if you’re looking at a two-hundred-year-old building, it will likely stand for another two centuries. 

Why’s that? The physicist Richard Gott explained in a 1999 New Yorker article:

Standing at the Wall in 1969, I made the following argument, using the Copernican principle. I said, Well, there's nothing special about the timing of my visit. I’m just travelling—you know, Europe on five dollars a day—and I'm observing the Wall because it happens to be here. My visit is random in time. So if I divide the Wall’s total history, from the beginning to the end, into four quarters, and I’m located randomly somewhere in there, there’s a fifty-percent chance that I’m in the middle two quarters—that means, not in the first quarter and not in the fourth quarter.

Gott called it the Copernican principle, naming it after the idea that humans and earth and our solar system aren’t special and we don’t sit at the center of the universe—that we are one of many planets, in many solar systems, in many galaxies. Both ideas basically say the universe of possibilities is a bell curve, and it’s most likely we’re somewhere in the middle. That we are just average. 

And that’s what’s interesting to me about Rick’s idea. Essentially my read on it is that when an innovation reaches some critical mass (not sure what that dividing line would be), the universe of possible outcomes becomes a bell curve: there’s a small possibility it will totally disappear, an equally small possibility it will actually achieve its hype and promise, and a large possibility it will land somewhere in the boring middle. (NRB)

Post of the Day:

If you want more reading from me, I wrote a post over on the Variance blog about the relationship between strategy and execution. The basic idea is that most new ideas inside a company should manifest first in lower effort/investment layers higher in the stack before they become fully baked as part of products and strategy. Let me know what you think. (NRB)


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Software can only solve so much. Companies fall into a trap in viewing technology as a panacea, says Google’s Neil Hoyne, author of Converted: The Data-Driven Way to Win Customers’ Hearts. “[Companies] were saying, ‘With software, this will unlock all of our data.’” A new interview with Hoyne explains why it’s not that easy.

Thanks for reading,

Noah (NRB) & Colin (CJN)

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