The emergence of exponential technologies — explained using the 6Ds and Gartner’s Hype Cycle
Exponential technologies are not surprisingly created overnight. They follow the same phases and have the same characteristics.
In a previous article I have already written about Moore’s, Wright’s and Kurzweil’s laws as accelerators of exponential technologies. Technologies are called exponential when they have a strong economic and social impact on the lives of billions of people through their digitization, and when they spread in a particularly disruptive way. Examples include artificial intelligence, robotics, 3D printing and the other topics covered in this blog.
“Our intuition about the future is linear. But the reality of information technology is exponential, and that makes a profound difference. If I take 30 steps linearly, I get to 30. If I take 30 steps exponentially, I get to a billion.”
Ray Kurzweil, American inventor and futurist
Understanding exponential technologies
But how can exponential technologies be detected earlier and their development process better understood? The US-American entrepreneur Peter Diamandis provides an interesting framework for this in his book “Bold” with the 6Ds. According to Diamandis, the characteristics of exponential technologies can be unified in Digitalization, Deception, Disruption, Demonetization, Dematerialization and Democratization. This is what this article will be about now.
To round it all off, we also take a look at the Gartner Hype Cycle at the end of the article. This helps us to understand how exponential technologies evolve. This is not only interesting for the investors among us, but also for all those who can hardly wait to take advantage of these fantastic technologies in their everyday lives. The future is now!
Characteristics of future technologies
Peter Diamandis is Chairman of the Board of the XPRIZE Foundation, which organizes competitions to solve global problems, and founder of Singularity University. According to his website, Diamandis has founded over 20 companies in the fields of longevity, space, venture capital and education.
Below we will take a closer look at his framework of 6Ds and apply it to two examples: the smartphone, as a “historical” example, and 3D printing, as a current example.
Digitalization
Everything begins with digitalization. It is the prerequisite for technologies to achieve exponential growth through Moore’s Law. Its availability via the Internet makes it easily reproducible and divisible. Its hardware is subject to performance doubling every few years. And for those who doubt how long Moore’s Law will last: With Rose’s Law, which predicts the doubling of performance in quantum computing, the successor is already in the starting blocks.
Example Smartphone
In 1983, the Motorola DynaTac 8000X became the first cell phone to be launched. It cost an impressive $4,000 USD (today’s figure is around $9,000 USD) and its battery was used up after just 30 minutes of operation, but let’s not talk about it. The DynaTac 8000X only function was to make phone calls. As a result, its target audience was limited to wealthy tech enthusiasts and early adopters.
Example 3D-Printing
Just four years after the first cell phone, in 1987, the 3D Systems SLA-1 became the world’s first 3D printer. It was housed in a huge, man-sized cabinet connected to a clunky 1980s desktop computer.
Deception
According to the 6D framework, all exponential technologies go through a phase of obfuscation. The first advances are made slowly and run below the performance that is already available in the market for other technologies. This means that they are not considered further at first and are merely written off as a gimmick of a few hobbyists.
A good example is provided by Kodak, the former photography market leader. While their analog cameras had already achieved a certain resolution, Kodak’s digital cameras developed slowly but exponentially. The first 0.01 megapixels developed to 0.02. 0.02 became 0.04 megapixels. Followed by 0.04 to 0.08 megapixels and so on. Kodak overlooked the slow but safe exponential potential. With their distancing from the technology, Kodak itself disappeared from the market a few decades later.
Example Smartphone
After its introduction, the cell phone integrated step by step the first limited versions of games, mails, video calls, music players and other features in the 80s and 90s. Its battery life and hardware performance also improved steadily.
Example 3D-Printing
Have you heard of 3D printing between 1987 and 2010? Not me! And yet, during that time, the three most important printing processes today, SLA, FDM and SLS, were invented. In addition, both the speed of printing and the number of possible printing materials improved.
Disruption
First applications of exponential technology are changing the world. They create new markets or disrupt existing ones.
Example Smartphone
Steve Jobs introduced the first iPhone in May 2007. It was the beginning of a new era. Although strictly speaking, the touch screen was first introduced by the LG Prada, the iPhone changed the way we interact with devices. Today touch screens are a must-have. They are even built into the 2020 SpaceX Dragon rocket. The iPhone has pioneered our use of news, computers, television, photography and music like no other technical device.
Example 3D-Printing
3D printing is now in its disruptive phase. First applications are coming to market, demonstrating their disruptive power to the $10 billion manufacturer market. And yet, the first 3D printer was installed on the International Space Station in 2014. Also in 2014, the world’s first habitable home was printed on a 3D printer — in under 24 hours. In April 2019, the first human heart was printed. Although only in miniature, it was an important step to show that it is possible. In the fashion industry, adidas is among the first to successfully integrate 3D printing applications into its business model. Other markets likely to be transformed by 3D printing include transportation, toys, healthcare, architecture, film and many others. As Obama said in 2013: “3D printing that has the potential to revolutionize the way we make almost everything”.
Demonetization
Money plays only a minor role in exponential technologies from a certain level on. The technology itself becomes cheaper, sometimes even free, while its performance continues to improve. The classic example are computer chips: With more and more transistors per chip, the processor performance increases exponentially while the price drops more and more. Another example is photography. While in analog photography every photo was still associated with the cost of the photo roll and the time-consuming development, this was completely eliminated with digital photography.
Example Smartphone
Today’s smartphones have 100,000 times more processing power than the supercomputers that brought mankind to Mars. Yet by 2020, good smartphones are available for less money than new shoe models from adidas and Nike.
Example 3D-Printing
In 3D printing, too, the cost of production continues to decline as the technology becomes more widespread and more technological. It is still relatively expensive to print material. This will change in the future. In addition, 3D printing reduces storage and transportation costs. It will be printed on-demand and printed on site.
Dematerialization
With exponential technologies, the actual product disappears at some point. Wikipedia has dematerialized encyclopedias. iTunes the music business. It is no longer about the product itself, but about its function.
Example Smartphone
Today’s smartphones have built in $900,000 USD worth of products from the 1980s — including GPS, music player, camera, map, flashlight and books. But this is not all. During my research I came across an interesting quote from Apple CEO Tim Cook. Cook says: “I believe, if you zoom out into the future, and you look back, and you ask the question, ‘What was Apple’s greatest contribution to mankind,’ it will be about health”. This gives us the opportunity to take a look into the future. Today, Apple’s Apple Watch enables its users to record their heart rhythm via an ECG and examine it for disorders. The fact that this is more than just a nice toy is shown by the excellent quality assessment by heart specialists. Future smartphones, especially if you think of them as extensions integrated into our bodies rather than as physical products, will contain a large number of these sensors, for which we now arrange expensive examinations with doctors. This data can be shared with our doctors and become an important basis for consistent health care.
Example 3D-Printing
Dematerialization in 3D printing is turning our current production processes and factories upside down. While many products today are still made up of individual parts that must be manufactured at location A and assembled with all other parts at location B, 3D printing provides the unique opportunity to limit these processes to one. Everything can be printed on site. Many parts also no longer need to be assembled, but can be printed as one complete part. This dematerializes machines and processes.
Democratization
Exponential technologies are spreading rapidly. Their costs are falling to a mass market level due to increasing usage and competition. It is becoming the standard for many people.
Example Smartphone
61 percent of all people own a cell phone. But that’s not it! Since 2016, this number has grown by 40 percent. If you look at developing countries such as Africa in particular, “mobile first” is clearly visible. In these countries, the smartphone makes it possible to take out loans without having a bank account. It enables easy payment and thus builds up a previously existing trade. Connected to the Internet it will lead to a new growth in prosperity.
Example 3D-Printing
3D printing has not yet reached the mass market. But what would our world look like if every home had its own 3D printer? Companies could minimize both their manufacturing costs and production time. It’s already apparent that 3D-printed homes are cheaper and more environmentally friendly than our current ones. 3D-printed products with fewer parts are also less prone to failure. It is therefore only a matter of time before the cost-benefit calculation communicates transparently in the mass market and demand increases exponentially.
So much for the properties of exponential technologies. The 6Ds provide a good input to help you better understand the potential of a technology. Nevertheless, I often ask myself how far a technology actually has come in its growth cycle. When will we be able to use 3D printing in everyday life? To better understand this, a look at the hype cycle can help.
The Gartner Hype Cycle: The Emergence Process of Exponential Technologies
With the Hype Cycle, the market research company Gartner Inc. provides an explanation of how exponential technologies are created. This is super exciting, because exponential growth is not easy to understand for us linear thinking people. We tend to overestimate near events and underestimate the future.
Gartner divides the development of exponential technologies into five phases. Each of these phases has specific characteristics.
Innovation Trigger: Everything starts with a breakthrough in technology. First concepts and products are created. Start-ups enter their first financing rounds. The media and the public become aware and early adopters become enthusiastic about it. A hype develops.
Peak of Inflated Expectations: Expectations of the new technology are reaching their exaggerated peak. Progress is not happening fast enough for the press, and doubts about an actual disruption of the status quo are causing disappointment.
Trough of Disillusionment: The hype has died down, while start-ups have been busy raising new funding and continuing to work on the technology. Only a small target group is already using the technology.
Slope of Enlightenment: With improved products, more services and better plus cheaper hardware, expectations are rising again. Technology is slowly but surely finding its way into our everyday lives.
Plateau of Productivity: The technology is accepted by the mass market and is growing rapidly.
In his book “Bold”, Peter Diamandis summarizes the moment when a technology becomes suitable for the mass market as follows: “the most important telltale factor is the development of a simple and elegant user interface — a gateway of effortless interaction that plucks a technology from the hands of the geeks and deposits it with the entrepreneurs”.
Wait, there’s more! The Technology Adaptation Curve
With the Slope of Enlightenment and more practical customer benefits, a technology finds its way into our everyday life. To do so, however, it must bridge “the chasm”. According to Everett Rogers’ diffusion theory, it represents the border between the early and mainstream markets.
How exactly startups make the leap into the mass market with new products is a very special topic, which could probably be the subject of a new article. Therefore, I will content myself with the reference to it at this point.
Sources
- Diamandis, Peter: “Bold”, 2015, New York
- Diamandis, Peter: “The Future Is Faster Than You Think”, 2020, New York
- https://singularityhub.com/2016/11/22/the-6-ds-of-tech-disruption-a-guide-to-the-digital-economy/
- https://www.gartner.com/en/research/methodologies/gartner-hype-cycle
- https://creativehq.co.nz/blog/what-is-exponential-technology/
- https://www.tigermobiles.com/evolution/#fifthPhone
- https://www.techspot.com/news/78200-tim-cook-wants-apple-greatest-contribution-mankind-healthcare.html
- https://www.bankmycell.com/blog/how-many-phones-are-in-the-world
- https://www.helloiota.com/articles/technology-adoption
