The concept of diverging paths—one representing technical solutions leading to repeated failures, and another showing human infrastructure leading to sustainable growth—represents more than a contemporary business phenomenon.

This pattern has persisted across six decades of technological innovation, from the industrial automation of the 1960s through the dot-com bubble, Web2 platform failures, and now the spectacular collapses of Web3 and cryptocurrency projects [1][2][3]. Despite each new technological era promising revolutionary change, the fundamental dynamic remains unchanged: organizations that prioritize technology over people consistently encounter obstacles, while those that invest in human infrastructure achieve lasting prosperity and resilience [4][5].

What makes this pattern particularly striking is how each generation of technologists and business leaders appears convinced that their particular innovation represents a genuine departure from previous failures [3][6][7]. Web3 advocates champion "decentralization" and "trustless systems" as solutions to Web2's centralized control problems, yet the underlying organizational approaches mirror the same technology-first thinking that has produced failures for over half a century [2][8][9].

The Historical Pattern: Technology-First Failures Across Eras

The Industrial Era Foundation (1960s-1980s)

The roots of technology-first organizational thinking trace back to Frederick Taylor's Scientific Management theory, which treated workers as components in a mechanical system [10][11]. Taylor's approach emphasized efficiency and standardization while explicitly dismissing human factors, leading to widespread worker exploitation, union resistance, and organizational dysfunction [11]. This mechanical approach considered workers as robots that could speed up work at any cost, completely ignoring human motivation and social needs [11].

The first major technology mega-project failure occurred with IBM's OS-360 mainframe operating system in the early-to-mid 1960s [10][12]. When finally introduced in 1967, the project was a year late with a budget that had skyrocketed to more than $500 million—over four times the original $125 million estimate [10]. Frederick Brooks, the project manager, noted that "the product was late, it took more memory than planned, the costs were several times the estimate, and it did not perform very well until several releases after the first" [10]. This description could have been written yesterday, not 50 years ago, highlighting the persistent nature of IT project failures rooted in technology-first approaches [10].

The Early Computing Era (1990s-2000s): Dot-Com Delusions

The dot-com bubble of the late 1990s represented a massive experiment in technology-first thinking, with billions of dollars poured into companies that prioritized technical capabilities over sustainable business models [13][14]. The pattern was consistent: companies received hundreds of millions through venture capital and initial public offerings, burned through funds via rapid expansion and technology spending, then collapsed when revenues failed to meet projections [14].

Pets.com exemplified this approach, raising $82.5 million and creating sophisticated marketing campaigns around technical infrastructure for online pet supply delivery [13]. Despite impressive technology and a memorable sock puppet mascot, the company failed because it couldn't convince pet owners to abandon in-store purchasing for online delivery [13]. The fundamental flaw was assuming technology could override human behavior and preferences without addressing underlying human needs [13].

Webvan followed a similar trajectory, raising over $1 billion to build high-tech warehouses and automated delivery systems for online grocery shopping [13]. The company's technology-first expansion plan targeted 26 cities simultaneously, but collapsed after just two years because it failed to understand customer behavior and market dynamics [13]. Despite having a business model that seems obvious today, Webvan's technology-focused approach ignored the human factors necessary for customer adoption [13].

The failure rate during this era was staggering, with hundreds of technology companies disappearing when the bubble burst in March 2000 [14]. More attention was paid to technical hype than solid business planning, and those who didn't exit early were left with nothing but shattered dreams [14].

Web2 Era (2010s): Social Platforms and Digital Transformation Failures

The Web2 era brought new technological capabilities but repeated the same fundamental patterns [2][15][16]. Major technology companies continued launching products that prioritized technical innovation over human needs, resulting in spectacular failures despite substantial resources [15][17].

Google's repeated failures exemplify this pattern. Google Wave, launched in 2009, promised to revolutionize communication through sophisticated technical capabilities but struggled with complexity and user adoption [15][17]. Google Buzz, introduced in 2010, faced privacy issues that led to its closure [15][17]. Both projects demonstrated technical competence but failed to address fundamental human needs for simple, intuitive communication [15][17].

Social media platforms that gained initial traction often collapsed due to inadequate attention to human factors [15]. Friendster, once the leading social network in Asia with massive traffic, gradually lost users and officially closed in 2018 despite evolving into a social gaming platform [15]. Vine, the beloved short-form video app, failed to adapt to evolving social media landscapes and closed in 2016 [15]. Yik Yak's anonymous messaging platform gained popularity among young adults but shuttered in 2017 due to cyberbullying and threats that emerged from its unmoderated, technology-first approach [15].

Perhaps most significantly, the corporate world's adoption of Web2 technologies revealed a persistent gap between technological capability and organizational reality [16]. Research showed that almost one-third of organizations used Web2 technologies, but the primary barrier to broader adoption was senior management's lack of understanding of business benefits [16]. This reflected a fundamental disconnect between technical capabilities and human-centered implementation [16].

Digital transformation initiatives during this era experienced a 70% failure rate, not due to technical limitations but because organizations treated transformation as pure technology implementation rather than human-centered organizational change [18][4]. The pattern remained consistent: companies that viewed technology as the solution rather than as a tool to empower people consistently failed to achieve their objectives [18].

Web3 and Cryptocurrency: The Latest Iteration of Ancient Patterns

The Promise of Revolutionary Change

Web3 advocates positioned blockchain technology and decentralized systems as fundamentally different from previous technological approaches [6][7][19]. The rhetoric emphasized "trustless systems," "decentralized autonomous organizations," and "community governance" as solutions to Web2's centralized control and data ownership problems [20][6][7]. Proponents argued that Web3 represented a cultural shift toward user empowerment and ownership, moving beyond the technical limitations of previous eras [7][6].

This positioning echoed the promises made during every previous technological wave: that this time would be different, that the new technology would solve fundamental organizational and social problems through technical innovation alone [3][21][22]. The language changed—"decentralization" replaced "automation," "smart contracts" replaced "expert systems"—but the underlying assumption remained that technical solutions could address complex human and organizational challenges [6][7].

Spectacular Failures Repeating Historical Patterns

The reality of Web3 implementation has demonstrated the same technology-first failure patterns that have persisted for six decades [8][23][9][24]. The scale of failures has been unprecedented, with over $125 billion in value destroyed across major cryptocurrency and Web3 projects [8][23][25].

FTX Exchange: Governance Catastrophes

The collapse of FTX, once valued at $32 billion, epitomized technology-first thinking taken to its logical extreme [26][27][28]. Sam Bankman-Fried and his team created sophisticated technical infrastructure for cryptocurrency trading while completely ignoring fundamental organizational governance [27][28]. The company's board consisted of only two members, with no meeting minutes for major transactions [27]. FTX lacked key executive roles, a cybersecurity department, and basic processes for detecting security risks [28].

Internal culture reflected the same human factor negligence seen in historical technology failures [29][28]. Management "expressed little interest in instituting appropriate oversight or a control framework" and consisted of a small group that "stifled dissent, commingled and misused corporate and customer funds, lied to third parties about their business, and joked internally about their tendency to lose track of millions of dollars in assets" [28]. The parallels to Taylor's scientific management—treating human elements as obstacles to efficient technical operation—are unmistakable [11][28].

Bankman-Fried himself acknowledged the failure in human terms: "I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash" [30]. This represents a classic technology-first failure: sophisticated technical systems operating without human oversight, understanding, or governance [30].

Terra Luna: Algorithmic Hubris

The Terra Luna ecosystem collapse demonstrated how algorithmic solutions can fail spectacularly when they ignore fundamental human behavior patterns [24][31][32]. The project aimed to create a "fully decentralized stablecoin" where monetary policy was automated by smart contracts, eliminating human intervention entirely [31][32].

The algorithmic stablecoin UST and its backing token Luna crashed from $1 and $80 respectively to nearly zero in a matter of days, erasing almost $40 billion in market capitalization [24][31][32]. The collapse occurred because the system's design ignored basic human psychology around bank runs and market panic [31][32]. When faced with uncertainty, people behaved as humans always have—seeking safety and liquidity—rather than trusting algorithmic mechanisms [31][32].

Research into the collapse revealed that "restriction on UST redemptions at par value of $1 was the main factor that impeded the price stabilization of UST in the first days of the collapse" [32]. This represents a classic case of technical constraints failing to account for human behavioral realities during crisis situations [32].

NFT and Web3 Gaming: Hype Over Utility

The NFT market explosion and subsequent collapse followed familiar patterns of technology-first thinking prioritizing technical capabilities over human value creation [33]. Many NFT projects offered "nothing more than generic artwork with no real-world use case or clear path to future value creation" [33]. Promises of "exclusive communities" and "lucrative future benefits" created frenzies but failed to deliver substantive human value [33].

Web3 gaming has experienced even more dramatic failures, with 75.5% of games launched from 2018 to 2023 not succeeding [9]. The average annual failure rate stands at 80.8%, with 2022 seeing a record 742 game failures [9]. These failures occurred despite sophisticated blockchain technology and substantial funding, demonstrating that technical innovation alone cannot create engaging human experiences [9].

The pattern mirrors the dot-com era's focus on technical infrastructure over user needs [13][9]. Projects focused on blockchain integration and token economics while neglecting fundamental game design, community building, and player experience [9][33].

Decentralized Autonomous Organizations: New Technology, Old Problems

DAOs represent perhaps the most direct attempt to solve organizational problems through technical means [34][35]. The concept promises to eliminate human management hierarchies through smart contract governance, allowing communities to make decisions without traditional organizational structures [34][35].

Early DAO failures have revealed the same human factor challenges that have plagued technology-first approaches throughout history [34]. The original "The DAO" hack in 2016 demonstrated how technical vulnerabilities combined with poor governance structures to create catastrophic failures [34]. The hack drained over $70 million due to inadequate code testing and auditing practices, revealing that human oversight remains essential even in "autonomous" systems [34].

More fundamentally, successful DAOs have discovered that human coordination and community building remain central to their effectiveness [35][36]. Projects like Uniswap, MakerDAO, and successful community-driven crypto initiatives succeed not because they eliminate human factors, but because they create effective frameworks for human collaboration and decision-making [35][36].

The Persistent Success of Human Infrastructure Approaches

Historical Examples Across Eras

While technology-first approaches have consistently failed across decades, organizations that prioritized human infrastructure have demonstrated remarkable resilience and success [37][4][38][39]. The Hawthorne Studies of the 1920s established that "an organization's undocumented social system—what workers felt about their work and about their colleagues—was a powerful motivator of employee behavior, perhaps much more powerful than any 'rational engineering' program could be" [39].

Toyota's Production System exemplifies how human-centered approaches can leverage technology effectively while maintaining focus on people [38][40]. The company inherited its human-centered manufacturing approach from founder Kiichiro Toyoda's philosophy: "we make things for the benefit of others" [38][40]. The Toyota Production System maximizes human resources to shorten lead-times and constantly refine jidoka ("automation with a human touch") [38][40].

Toyota's approach has led to measurable results: reduced equipment investment and production preparation lead time by 50% while increasing productivity by 20% [38]. The company continues to employ highly skilled Takumi professionals whose tacit hands-on knowledge forms the foundation of quality manufacturing [38][40]. This demonstrates how human expertise can guide and enhance technological capabilities rather than being replaced by them [38][40].

Contemporary Human-Centered Success Stories

Modern organizations that prioritize human infrastructure continue to outperform technology-first competitors across multiple dimensions [4][5]. Research by EY and Oxford University found that organizations putting humans at the center of transformation efforts are 2.6 times more likely to succeed than those that don't [4]. Companies that focus on human factors can increase transformation success probability to more than 70% [4].

Google's success with "20% time" policy, Netflix's "freedom and responsibility" culture, and Apple's human-centered design thinking all demonstrate how prioritizing human needs and capabilities can drive innovation and market success [1][21]. These companies understand that technology amplifies human capabilities rather than replacing them [41][21].

Patagonia represents a particularly powerful example of human-centered business success [1][42]. The company's employee empowerment philosophy allows workers to make decisions and pursue passions while maintaining accountability [42]. This people-first culture has created a dedicated and innovative workforce, enabling Patagonia to remain an industry leader while building exceptional employee loyalty [42].

Web3 Success Stories: When Human Factors Lead

Even within the Web3 space, projects that prioritize human-centered design and community building have achieved greater success and sustainability [6][19][43][44]. Successful crypto projects distinguish themselves through strong community engagement, transparent governance, and user-centered design rather than just technical innovation [43][36].

Community-driven projects like Ethereum Name Service (ENS), which simplifies wallet interactions by replacing complex addresses with human-readable domain names, succeed because they address genuine human needs [43]. Cardano's approach of putting "research by experts and community participation first" creates an ecosystem where ADA token owners participate in protocol decisions [43].

The most successful Web3 projects recognize that "the strength of a community decides if a blockchain project remains relevant over time" [36]. They succeed because they use "community-guided systems along with developer teams and active discussion forums" rather than relying solely on technical capabilities [36].

User-centered Web3 design practices acknowledge that "many users find themselves on the frontier of this innovation, unequipped with a deep understanding of blockchain technology" [19]. Successful projects focus on making "blockchain technology more approachable and easier to understand, enabling users to effectively interact with Web3" [19].

The Strategic Imperative: Breaking the Cycle

Understanding Why the Pattern Persists

The persistence of technology-first failure patterns across six decades suggests deeper structural issues beyond simple management mistakes [10][4]. Each technological era attracts optimistic innovators who believe their particular technology can solve fundamental human and organizational challenges [3][22][6]. This creates a recurring cycle where technical capabilities are overestimated while human factors are undervalued [10][4].

The pattern persists because technology-first approaches offer appealing narratives of control, efficiency, and scalability [11][6][7]. Automation promises to eliminate human variability and error, algorithmic systems promise objective decision-making, and decentralized technologies promise to eliminate organizational politics [6][7][31]. These promises resonate with leaders seeking simple solutions to complex human challenges [11][6].

However, as demonstrated across decades of failures, technology amplifies existing organizational strengths and weaknesses rather than eliminating them [10][41][4]. Organizations with poor governance, inadequate risk management, or weak cultures will not solve these problems by implementing more sophisticated technology [10][4][28].

The Path Forward: Human Infrastructure as Foundation

Organizations standing at technological inflection points must recognize that sustainable success requires building human infrastructure as the foundation for technological capability [4][5][44]. This means developing organizational cultures that support continuous learning, transparent communication, and collaborative decision-making [4][5].

The evidence overwhelmingly demonstrates that technology effectiveness ultimately depends on the people who implement, manage, and use it [9][4][19]. Human infrastructure creates the organizational capabilities that continue generating value long after initial technology investments [24][33].

Successful transformation requires treating the human element "not as a single workstream, but as a focal point underpinning and enabling the entire transformation" [4]. This approach recognizes that people, culture, and systems operate as an integrated system supporting organizational success [8][4].

Implications for Web3 and Future Technologies

For Web3 projects and future technological innovations, the historical evidence provides clear guidance [6][19][44]. Projects should prioritize community building, user experience, and governance structures over pure technical capabilities [19][43][44]. Success requires understanding that "Web3 is a cultural shift, even more than a technology shift" [7].

The most promising Web3 approaches recognize that decentralization should empower human collaboration rather than eliminate human factors entirely [7][44][36]. This means designing systems that make complex blockchain technology accessible to users while maintaining the human relationships and community dynamics that drive adoption [19][44].

Organizations adopting any new technology should learn from six decades of failure patterns by inverting the traditional approach: start with human needs and organizational capabilities, then select technologies that amplify these strengths [4][5][19]. Technology should serve human purposes rather than dictating organizational structure [21][4].

Conclusion: The Eternal Choice

The diverging paths metaphor captures a fundamental truth that transcends any particular technological era: organizations must choose between pursuing technical solutions that lead to repeated failures or investing in human infrastructure that enables sustainable growth [1][2][3]. Six decades of evidence, from industrial automation failures through Web3 collapses, consistently demonstrate which path leads to lasting success [2][10][4].

What makes this pattern particularly relevant today is how Web3 and cryptocurrency advocates have positioned their technologies as revolutionary departures from previous approaches, yet the failure modes remain remarkably consistent [2][8][6]. The specific technologies change—smart contracts replace expert systems, DAOs replace hierarchical management, blockchain replaces centralized databases—but the underlying organizational dynamics remain constant [8][34][6].

The most successful organizations across all technological eras understand that their competitive advantages come from human capabilities: creativity, adaptation, collaboration, and wisdom [33][4][5]. These capabilities cannot be automated away or replaced by algorithmic systems; they can only be amplified by thoughtful technology implementation [21][41][4].

As new technologies continue to emerge, the fundamental choice remains the same: will organizations prioritize technical capabilities while treating human factors as obstacles to overcome, or will they build human infrastructure as the foundation for technological success? The evidence from six decades of organizational evolution provides an unambiguous answer [1][2][4][5].

The eternal divergence is not about rejecting technology, but about understanding its proper role in human organizations [41][4][19]. Technology should amplify human potential, not replace it; enable human collaboration, not eliminate it; and serve human purposes, not dictate them [21][4][19]. Organizations that embrace this understanding position themselves to benefit from technological innovation while avoiding the repeated failures that have plagued technology-first approaches for over half a century [4][5].

⁂

1. https://cointelegrap

   https://beincrypto.com/web3-games-failure-coin

   https://www.w

   http

   https://www.snb.ch/

   https:/

   h

   https://worldnewswire.net/2025/02/03/the-future-of-crypto-top-community-driven-projects-to-watch/

   tps://cointelegraph.com/news/defi-protocols-declare-losses-as-attackers-exploit-luna-price-feed-discrepancy

   www.cbsnews.com/news/business-history-revisiting-the-hawthorne-studies/

Crafting the Future: A User-Centric Web3 Ecosystem for Mass Adoption | SKALE

Despite Web3's promise of unprecedented user control and privacy, its mass adoption hinges on overcoming a critical challenge - creating a UX that is as intuitive and seamless as that of Web2.

https://skale.space