Where do the opportunities lie? The Gartner Hype Curve may provide some interesting answers.

The curve was designed to identify the typical life cycle for a technology product. And while services are obviously quite different from technology products, this curve will give you an interesting way to view your marketplace. It’s a tool that will help determine where the opportunities are and what to expect in the future.

At first there is the idea that arises. It’s here that excitement builds.People explore, criticize, and champion. Visibility spikes because of the newness of the idea, but at some point it peaks. And then comes the inevitable dip. Perhaps the excitement simply waivers, unexpected challenges occur, or a growing resistance takes hold. Working through this critical period is often what separates the successful from the not so successful. But there is good news on the other side! If a product or service survives this dip it will see a healthy upswing in interest and adoption. It will have reached a critical perception and market penetration point where sustained growth takes place. And then finally, a product or service reaches maturity. It remains a viable business opportunity at this stage, but the growth is not as dramatic and the opportunities shift.

I have attempted to position four phenomenon within our profession along this curve: online therapy, social networking, coaching and traditional psychotherapy. Each one of these is at a different stage of maturity, and I am quite certain other more knowledgeable folks will have differing opinions as to where these four fall along the curve. Irregardless, I am using these four services to show how the curve works and how opportunity shifts depending on where something resides along the curve.

The Gartner Hype Curve

The newest kids on the block are technology focused (online therapy, social networking). You could make a case that both are at beginning stages of growth where there is much talk, deliberation and experimentation. As both the general population and professional community turn a critical eye to these two models, there will be needed criticism that will take place as these services move into the trough of disillusionment.From out of this stage, will come new found opportunity as issues will be resolved (e.g., ethical standards created), and the service or idea becomes more acceptable to the masses.

Professional Coaching, to a large degree, finds itself ahead of the two technology-based service models. I would argue that it can be found along the slope of enlightenment as credentialing is taking place, customers are demanding the service, and professional bodies are beginning to look for ways to integrate it into their professional models.

Traditional psychotherapy would no doubt fall in the plateau of productivity. Some 10 million Americans made 86 million visits to psychotherapists from 2006 and 2007. Nearly one out of three persons (80-90 million) have had some experience with psychotherapy. This is a critical mass of acceptance that cannot be ignored.

Three Factors To Consider Along the Curve

Along this continuum there are important factors to consider. They play a large role in understanding the nature of this cycle, and I would like to specifically address three.

1) The Critical Price or Perception Point

At some point in time, a product or service reaches an inflection point. It comes to the market and very few see the value or have the means to obtain the product/service.  However, as time moves forward, a shift in perception takes place. It is at this point that we begin to see steady or dramatic growth.

Consider the DVD player as an example. It was a technology vastly superior to videotape that was introduced in 1990. But it took until 1998 before it reached an inflection point where growth could be sustained. And in this case it had to do with reaching a critical price point families viewed as the psychological threshold to buy. That price point was $400. At that slope of enlightenment families began buying the dvd player until it reached a critical mass of 25% of households. Some companies and businesspeople were smart enough to forecast this progression. Reed Hastings, the founder of Netflix, saw that the dvd player was primed for growth. He saw the moment and in 1999 founded Netflix.

Online psychotherapy represents an opportunity at the beginning of the Gartner Hype Curve. And like the dvd player, it is a service that has some work to do. In spite of this fact, there will be opportunity for professionals both now and in the future. You can choose to help carve out the path, or you can wait until a critical perception point takes place. The opportunities change depending on when you choose to enter.

2) The Penetration Point

When penetration of a service, idea or product rises above a certain critical mass we know a tipping point has been created. The auto industry offers a great example with the evolution of the Hybrid car. It has now reached a critical mass in the marketplace of 2%, meaning sustained growth now has an opportunity to take hold. This opens up avenues for newer innovations such as the design and adoption of the electric car. Once the electric car idea reaches a perception point, and later an adoption point, it will change the entire auto industry as many limitations (design, fuel options) will disappear. Seemingly small changes lead to bigger transformative change.

Coaching is an industry primed for critical mass adoption. It has already become an accepted service within white collar businesses. Professional associations are also looking into this model closely, and many clinical professionals have become certified coaches as a way to expand their services. It will be interesting to see what opportunities arise as the coaching industry matures.

3) Maturity/Commoditization

In this space, value takes on new meaning and free plays an important role.

The telecom industry provides a great example of a mature business that has dramatically impacted growth and opportunity across a wide variety of industries.  With the rise of fiberoptic technology we have seen the price of a call to India fall from $2.20 per minute in 1990 to 7 cents in 2004. It is almost non-existent today.  This has led to the mass outsourcing of knowledge based tech talent.  This phenomenon is one of the main reasons why markets are fragmenting, and why power has shifted from the few to the many.

You can make an argument today that many psychotherapy services find themselves in a stage of maturity similar to the telecom industry. Psychotherapy has evolved and matured to the point that it can be difficult to distinguish oneself. There are still opportunities for growth and success, but you must look for them, you must market well, and you must recognize that sometimes – free is good.