Kyle Harrison
concept

Hype Cycles

Hype Cycles

A hype cycle is the recurring pattern in which a new technology draws a wave of enthusiasm and capital ahead of its real results, then a correction. In this corpus the term covers venture-era cases (SaaS, NFTs, the metaverse) and the current AI buildout, and it overlaps with Market Bubbles.

How it shows up

  • A frenzy followed by deployment. Our 2Q Letter to LPs (Slow Ventures) describes every horizontal technology as following one arc: euphoric money builds the infrastructure, the bubble bursts (railways, utilities, fiber, crypto), and the leftovers support “newly possible companies.” It places AI in “The Frenzy,” using Carlota Perez’s surge cycle. Its claim that “the cycle of diffusion is slow, even if its onset is sudden” is the deployment half of the pattern.
  • Forecasts as hype. RIP Metaverse collects the numbers issued for a product nobody had defined (a $5 trillion and a $13 trillion market among them) and puts the blame on the press and consultancies that priced it.
  • Paper returns that felt like a new paradigm. I’ve Been in SaaS from… (tweet) (Jason Lemkin, May 2022) describes 20 months in which everyone seemed to have three to six “fund returners” on paper, and concludes “the rules didn’t change.”
  • Concentrated attention. Heard From LPs This Week… (tweet) (Meghan Reynolds, March 2026) reports LP conversations dominated by a very small set of deals, with a “fever pitch” to access rounds of OpenAI and Anthropic.
  • Substance versus feeling. From The Archive We Chatted… (tweet) quotes Marc Andreessen on a disconnect between how technology is actually improving and how people feel about it.
  • Speculation that catches disciplined readers. NFTs is cited as an example of hype-snipe risk. Updating The Hype Cycle applies the euphoria-then-hangover pattern to venture and AI.

Where this appears

Essays and concepts

Long-reads

Tweets

Referenced in