The AI Hype Cycle

The buzzword of 2024 is “AI” and like social, mobile, cloud, fintech, and blockchain, every startup is claiming to have it and every big startup fundraising is claiming to expand what can be done with it. Or in short, we’ve been here before.

A Grand Unified Theory of the AI Hype Cycle does a very good job explaining how this will play out in 13 steps, and how it already played out in the 50s, 60s, 80s, 90s, and 10s with previous versions of “AI”. Expert systems anyone? Fuzzy logic? Been there, done that.

And no, this time is not different.

There are so many lessons in startups, startup investing, and technology adoption that come from looking back a few decades. For example, I’m out of the 1970s nostalgic computing rabbit hole, but that journey has subsequently led to reviewing the technological progress of the late 1900s and early 2000s. This week, that was the rise of the RISC-based CPU, which was then obviously going to...

I’ve never been able to explain why I have so hard of a time believing consultants. What is it about their role that make their conclusions so often so wrong? None other than Steve Jobs explains… in less than two minutes. “I don’t think there is anything inherently evil in consulting” … but “You never really taste it.” – Steve Jobs Share...

The standard structure for private equity funds (and venture capital funds) is “2&20”, as in a 2% management fee (±1%) and 20% (±10%) of the profits, a.k.a. “carried interest“. Why 20% of the profits? Henry Kravis of KKR explains below, starting at 6:00. TL;DR: Necessity, as he and his partners had no capital to put at risk. Share this:Click to share on Twitter (Opens...

Other people, see things and . . . say ‘Why?’ . . . But I dream things that never were– and I say: ‘Why not?’ – George Bernard Shaw This has shown in my 30+ year career repeatedly. Most recently a few months ago, when pondering the “Missing Middle” of capital for startups in general, and SMEs in Africa specifically. Why? Why is it taking so long for...

Venture capital funds often tout cash-on-cash returns of 2x-3x over 10 years. That is the supposed “norm” for successful funds. But despite the industry being tracked investment by investment in detail, the industry as a whole is notoriously opaque when it comes to the returns of the funds. Thank you to Dan Gray (@credistick) who tweeted the following table, with data from 1981...