Reposting my blog on Attention Curves here since it is getting a fair amount of attention lately. It was just picked up by KLD here. I have my work cut out for me to evolve these attention curves as a valuable and consistent tool for the capital market for good.

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In a recent conversation with Tony Audino, a Seattle-based entrepreneur and VC friend of mine, we talked about the blended value market and its various market sectors, both old and new. At one point he said “you know you should develop a “hype curve” for this market.

Hype curves are most frequently associated with Gartner Group’s technology charts that measure market visibility and maturity ranging from an initial “technology trigger” to a “plateau of productivity” along a curve just like the one below. However the nomenclature utilized there is not appropriate for the blended value market. What you see below is an adaptation of the general hype curve idea that I call an “attention curve."

A “social trigger” occurs when some new way of creating both social and financial value is developed and begins to spread. New social enterprises are born and some level of acceptance of the idea emerges among a group of insiders. This initial success may or may not be driven by a new technology. In many cases such as microfinance or fair trade, a new bargain is struck and/or a new series of transactions are created or redefined. In any case this social trigger allows others to see and do things differently that result in the creation of both social and financial value. Attention follows and soon an emerging market sector is born.

Typically this attention follows a curve upward until a level of “peak attention” is reached, most recently exemplified by the way everything has gone “green” - from special popular magazine issues on the subject to the Oscars and Al Gore’s Inconvenient Truth.

Of course from this point there is no place to go but down in terms of attention. It is in this down cycle where the sector shows its mettle. While significant attention usually brings a flow of new money, these new ideas have to actually work or they slowly disappear off the radar. This is the period I call “market acceptance.” The idea either proves to be sustainable or it falls off the chart. If indeed it proves out, a more mature period of expansion and development occurs supported by smart money. In the case of clean technology for example, this has meant a quadrupling of venture investment in the last six years. Ultimately the acceptance of the idea becomes so commonplace that “market liquidity” develops as it has with the affordable housing market.

Admittedly, the positioning of certain sectors on the attention curve is somewhat subjective. To help guide my judgment I used Technorati’s charting tool that shows the number of hits on keywords over time from the 84.6 million blogs it tracks. Here is the Technorati chart on “green” for example.

Certainly there are other methods for determining positioning on the curve that we at Collective Intelligence intend to explore, but for this first pass, I offer it up as is. The attention chart points out that blended value has been around for a long time, with serious market successes to point to. It also says there is a lot more where that came from, a wave of new ideas, companies and non-profits, albeit at different stages of maturity, that are following on the heals of their predecessors. I’d love to hear your comments and suggestions.

Thanks Mark