On Unicorns and Hype Cycles

If you think about late stage investing valuations in the context of a Gartner Hype Cycle chart it seems we are starting the glide down the chart post the ‘Peak of Inflated Expectations’ phase. Taking a look at the crowded slide done by CB Insights demonstrates how rapidly the industry has climbed the hype cycle.

A good indicator for getting to the peak is the increasing negative press about the phenomena, and it indeed feels like we have started the slide down the slope towards the ’Trough of disillusionment’.

No one can predict how this will play out. We can only hope that this slide down will be brief, and not in ‘crash’ mode as happened last time around. It sure feels like it is time we move on to the ‘Productivity’ phase of the Hype Cycle with a healthy late stage investing environment based on business fundamentals.

That is, until the next cycle comes around ...