startup-costs, online-toolIT Advisory firm Gartner has developed many methods and tools to view the development of a company. Hype Cycle is one of these tools. How correct is it in predicting future of startups (considering them to be technologies) ?
No, it can't. And it's not intended to.
Gartner's Hype Cycle methodology provides a graphical view of the maturity, adoption and business application of specific technologies. But it is not made to analyze the success probability of a startup.
If you're looking to improve your ability to predict startup future success, you should pay attention to Bill Gross research.
Bill Gross is the Founder of American incubator Idealab, which has in the past two decades been responsible for launching over 100 companies, including Citysearch, CarsDirect, GoTo, NetZero and Tickets.com, to name a few.
He has recently given a talk at TED where he explain, based in his experience, why TIMING is the single biggest reason why startups succeed.
The other (important) factors would be Idea, Team, Business Model and Funding. But from all, Timing is the most important one.
So maybe, somehow, you could use Gartner Hype Cycle to compare the timing between the launch of a startup and the "phase" the technology is in. But again, I don't think it would be a great tool to predict anything.
The Hype Cycle is a very general observation. It is roughly equivalent to saying that the majority of businesses will fail in the first year. All it gives you is a probability without telling you how to beat the odds. And cannot at all predict what will happen in an individual case.
Also, while the cycle describes a typical trend for new technologies, the length of each stage is different for each; and the amplitude, if measurable at all, differs for each new technology.
Now to address your question, “Can this be applied to individual start-up businesses?”
While the Hype Cycle can describe a macro-trend for all businesses and individuals promoting a new technology, it does not work at all to describe the behavior of the single entities that are part of that macro-environment.
To the contrary, most startups follow quite different trajectories including a sudden take off and a quick crash, a slow start that does a sudden hockey stick, a slow start and agonizing death, or a parabolic take-off growing beyond all probability. The few that do follow the trend are the exception not the rule.
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