We appear to be in the midst of a trend where companies are claiming to be “tech companies” when they’re anything but. One might wonder why it matters? So the guy selling peaches on the side of the road is claiming to be a tech company because he uses his phone to accept credit cards. Who cares, right? Let’s find out why it matters.
As I write this, the WeWork IPO is in trouble. They were touted as the next “tech unicorn”. But why were they ever called a “tech” anything? Looking at their business model, they rented out space to companies. Sure, they offered their locations to technology companies all the time but that doesn’t make them a technology company. They used technology to manage scheduling, network access (insecurely, I might add), etc… but does that make them a tech company? No more than the guy selling peaches. Their core business is real estate, plain and simple. One of their differentiators, however, is that they have positioned themselves as this sexy technology company solving world problems and moving humanity forward. In reality, they’re a room with a desk where you can do business for a monthly fee. Also known as an office. I don’t know enough about pricing public companies to say for certain but it seems to me their IPO troubles stem from the fact that they’re a real estate company selling their stock as if it was a technology offering and the investors aren’t buying it.
So, again, no big deal right? The only people who are apt to be harmed are their investors. Now let’s take a look at how insidious this trend is becoming.
Take a minute to ask a medical provider about Juul. My better half is a Family Nurse Practitioner and what she has told me is astonishing. She regularly sees teenage patients with the lungs of a 55 year old who has smoked most of their life. All because of a company that is touting themselves as a “tech company”. Such a claim is specious at best. They took what someone else invented, modified the formula to contain more nicotine than two packs of cigarettes, slapped stylish marketing on it, and started targeting kids. If that’s what it means to be a tech company now, I want no part of it.
Part of the problem here comes from a saying going around these days that asserts, “Every company is a tech company.” To the degree that it may be true, what it really means is that you have to use technology to do business. That part is unavoidable.
Using technology doesn’t make you a technology company any more than driving a fast car makes you a race car driver. Farmers use computers and technology on an ever increasing basis. Even the workers in the worlds oldest profession make use of technology to find “clients”. But none of them, from Joe Farmer to, well, we’ll call her “Candy”, are hiring a team of software developers to help them manage their products or services.
If at any point after asking yourself the question, “Is it a tech company? Is it, really?” you have to contort your face while you ponder the answer then, no, it probably isn’t. To paraphrase Supreme Court Justice Potter Stewart; you know a tech company when you see it.
Courtesy of Darrell Brogdon, CIO of Raika Technologies and GotAnAppIdea.com.