Speculation-to-Utility Trend Cycle
Wait through the hype and crash, then build on the surviving utility
- Difficulty
- Easy
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 94%
The Speculation-to-Utility Trend Cycle models emerging technology adoption as a progression from novelty to excess and then practical rebuilding. A new capability first attracts attention because it is genuinely interesting. Imitation, hype, and speculation then dominate the conversation, often producing simplistic projects and inflated prices. When those weak expressions crash, attention can return to the underlying technology. Builders then develop utilities that were difficult to see while everyone focused on trading. The framework advises separating price activity from evidence of useful behavior, preserving conviction only in the core capability, and waiting for post-hype conditions to expose durable needs. It also accepts that early observers cannot enumerate every future use case. The output is a disciplined building thesis based on surviving utility rather than peak-cycle excitement.
Origin
Kieran Flanagan summarized the pattern as interesting innovation becoming stupid, crashing, and producing real utility from the aftermath. Extracted from Marketing Against The Grain.
Core principles
- 01Early attention does not prove durable value
- 02Speculation can obscure the underlying technology
- 03A crash removes weak imitations and incentives
- 04Builders should return focus to practical utility
- 05Future use cases cannot all be predicted at inception
How to run it
- 1
Isolate the novel capability
Describe what the technology newly enables without referring to prices, celebrity adoption, or market excitement.
Pro tip If the capability cannot be stated plainly, the thesis may be mostly hype.
Watch out Do not confuse novelty with usefulness.
- 2
Separate use from speculation
Distinguish people using the technology for a job from people purchasing assets because they expect prices to rise.
Pro tip Track repeat behavior and outcomes rather than transaction volume alone.
Watch out High trading volume can conceal low practical adoption.
- 3
Recognize the distortion phase
Watch for copycat projects, inflated promises, and attention concentrating on the easiest speculative format.
Pro tip Document overlooked non-speculative experiments during this phase.
Watch out Do not assume the distorted public image represents every use case.
- 4
Survive the correction
Reduce dependence on speculative revenue and observe which capabilities, communities, and needs persist after prices and attention fall.
Pro tip Treat declining hype as an opportunity for clearer customer research.
Watch out A crash does not automatically validate the underlying technology.
- 5
Build surviving utility
Develop products around persistent needs and newly visible use cases rather than recreating the previous speculative cycle.
Pro tip Use post-crash user behavior to prioritize what to build.
Watch out Avoid adding tradability when it does not improve the core job.
- 6
Keep the use-case map open
Continue experimenting because important applications may emerge only after infrastructure and access improve.
Pro tip Run small pilots instead of trying to predict the entire future market.
Watch out Uncertainty is not permission to promise infinite potential without evidence.
In the wild
Profile-picture collections and marketplace trading create the first large wave of NFT awareness. As volume declines, builders focus on ticketing, credentials, access, audience activation, and token-gated communities rather than reproducing speculative art collections.
→ The market shifts from trading-centered attention toward practical applications of token ownership.
Common mistakes
Mistaking price for adoption
Rising asset prices show demand for the asset but do not establish that the underlying technology solves a durable problem.
Rejecting the core after the crash
Weak projects can fail while the foundational capability remains useful for different applications.
Predicting every use case upfront
Demanding a complete use-case map too early ignores how infrastructure and experimentation reveal new applications.
Is it for you?
Best for
Entrepreneurs, investors, and product teams evaluating technologies that have attracted hype before clear use cases are established.
Not ideal for
Short-term traders whose objective is to profit from price movements rather than build durable products.
From the transcript
“I think all trends start with like something interesting, and then it more morphs into something stupid, and then that something stupid crashes, and out…”
“We've only just got this, right? We can't think of all the use cases, but there's going to be some amazing things that I think…”
“And I think the speculation part is a drain on the industry at times.”
From the episode
How You Can Use NFTs For Your Business with Katie Chen
Katie Chen