Somewhere along the way I think we got it flipped around. No one was calling Sears a tech company in 1969 just because they bought an IBM 370 to computerize their accounting and inventory. By probably 1975, if you were Fortune 500 and still doing your books by hand you were probably just a dinosaur rather than your computerized competitors being so advanced.
Uber, Tesla, okay, maybe there is an argument to be made for them to be "tech companies". Like the referenced investors, I fail to see how WeWork is anything but a real estate play, and consequentially having to work from that rulebook. Oh, you have computer systems involved? Welcome to the 21st! Where everyone else does, too.
In summary, I don't think simply using a phone app to do some form of collaboration or logistical deployment using assets owned or contracted by the company qualifies one as a "tech company" anymore. I think they're still a traditional company doing what everyone else ought to (and eventually will) be doing to begin with.
"IMHO the idea that companies are either "tech" or "not tech" has been peddled by VC's to convince buyers that all companies considered "tech" either have or will potentially have high gross margins regardless of current state and thus high valuations."
"When working with my clients (investors/acquirers) we generally consider businesses in three distinctions, IT Supported, Heavily Tech Enabled and Software Businesses. There are then varying degrees in between those distinctions."
I work in tech, I think how people work is a key advantage. But the concepts underpinning agility and leanness can be traced back as far as you please. We didn't invent them and we don't own them.
A book that really made me understand this early on was "Fortune's Formula" in that it illustrated how technology transformed the speed of information arbitrage, but the real human problem was getting information as quickly as possible from point A to B.
Having a website in 1997 to sell goods was a better means to reach customers unable to visit a store location than a mail catalog due to better inventory management, personalization, etc.
One blog I've enjoyed reading is Chick-fil-a's technical blog as it really demonstrates how a company in the restaurant business is leveraging technology to make its customer experience or operations more efficient, much in the same way, Mcdonald's used milkshake machines to be more efficient. But, Chick-fil-a is willing to admit it is a restaurant!
Similar I have issues with Compass Real Estate getting 440M in funding to basically buy traditional real estate companies with some sort of mythical special tech to make
home buying “better”
Apparently, they spent the 440M on signing bonuses for top realtors, who brought listings with them. I can't speak to the economics, but as an active buyer right now, I'm seeing Compass listings all over Streeteasy, where the other firms barely acknowledge that SE has upended the search process, and still try to peddle "buyer agent" services, like I can't just find listings online. Compass.com at least has "coming soon" listings.
Agreed. Valuation is based on sum of future profits - so essentially how profitable the business can be AND how big it can be. If
1) Ratio of fixed to marginal costs is high you have economies of scale, and will get much more profitable as you grow (software vs consulting)
2) You can capture revenue quickly because it's operationally simple to add customers (e.g don't need to hire with each dollar of revenue) you are more likely to reach that profitable scale faster.
If your company uses tech to achieve (1) and (2) then they should have high valuations. If you happen to use cool tech but don't have economies of scale or easy operational growth than how you brand the company shouldn't really matter.
Uber, Tesla, okay, maybe there is an argument to be made for them to be "tech companies". Like the referenced investors, I fail to see how WeWork is anything but a real estate play, and consequentially having to work from that rulebook. Oh, you have computer systems involved? Welcome to the 21st! Where everyone else does, too.
In summary, I don't think simply using a phone app to do some form of collaboration or logistical deployment using assets owned or contracted by the company qualifies one as a "tech company" anymore. I think they're still a traditional company doing what everyone else ought to (and eventually will) be doing to begin with.