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I wonder when this trend of calling companies "tech companies" — just because they happen to use technology — will end. WeWork clearly is a real estate company

I wonder when this trend of calling companies "tech companies" — just because they happen to use technology — will end. WeWork clearly is a real estate company; Uber is a taxi company with an app; etc.

rolltiide 7y ago
Yeah its mostly a factor of what VCs they tap and their portfolio companies coupled with how a company spends. High burn high growth Draper Capital? Tech company.
pcora 7y ago
A hell of a taxi company with that many engineers and research and development areas. But I agree on WeWork as a real estate company. They are not creating anything.
chasing 7y ago
When it stops making someone money.
Jestar342 7y ago
I think it's the trend of bringing tech to an existing market. When that stops, we'll probably stop calling it tech companies. Uber is the perfect example of a "tech company" - they brought technology (and in this context "tech", arguably, means "the internet") to an industry that was previously dominated by standing on a street and waving down a cab/taxi. However I think it is rather pithy to just call them a taxi company with an app, right? There's a lot of tech "magic" involved in Uber from the real-time connections on a such a massive scale, to the geo-fencing, price/route estimations, and the massive amounts of infrastructure management and maintenance needed to bring that to however many millions of people use the service.
- lotsofpulp 7y ago
  In my mind, the main feature of a tech company is the ability to scale due to almost zero marginal costs, compared to other companies which need much more time and resources, which is also why tech companies can have such huge profit per employee numbers.
  - ghaff 7y ago
    That's very specific to software that doesn't need much support. I think Intel is probably considered a tech company and they certainly can't scale at near-zero marginal cost.
- jcranberry 7y ago
  >However I think it is rather pithy to just call them a taxi company with an app, right? Perhaps you mean reductive? A pithy statement would be one which has identified the core of something or is very meaningful despite being terse. It is very positive.
- pdonis 7y ago
  > There's a lot of tech "magic" involved in Uber I agree this is true of Uber, but is it true of WeWork? It seems like the comparison with Uber just makes WeWork look even less like a tech company.
  - autokad 7y ago
    I agree, I don't see how wework is a tech company other then the fact they probably service mostly tech companies. I was stationed at wework for a while, I liked it. But I don't see how tech is involved
    - CydeWeys 7y ago
      WeWork to me seems similar to a chain gym. Both have shared physical facilities and manage a membership database that allows you to get in (and also provide WiFi). Yes, there's computer systems involved, but any company of any reasonable size is using computers these days.
- TazeTSchnitzel 7y ago
  But we don't call, say, banks tech companies. A huge portion of their business requires sophisticated technical infrastructure they create themselves, but we just call them banks. And there are plenty of normal taxi companies with similar systems to Uber's.
  - afarrell 7y ago
    People call Monzo a tech company.
    - novok 7y ago
      'fintech' specifically. It's almost a style designator.
  - ulfw 7y ago
    There's a ton of tech involved in all kinds of companies: hotels, airlines, hospitals, insurance companies, anything really. None of them are "tech companies". Neither is Uber/Lyft/Grab
  - jasode 7y ago
    >But we don't call, say, banks tech companies. A huge portion of their business requires sophisticated technical infrastructure they create themselves, but we just call them banks. I understand your criteria for classification but I'll attempt to explain why others think of Uber as a "tech company". Others' viewpoint: Yes, virtually every company uses technology but not every company is birthed by technology: - the Uber founders (Travis K and Garrett C) were software programmers, not taxicab owners. - the product they worked on was a smartphone app instead of buying a car with a taxi medallion and driving around for fares. - the type of investors that funded them (e.g. Benchmark Capital) were VCs that specialize in the tech sector. - the type of companies Uber has acquired[1] so far are tech focused (e.g. machine learning, geospatial, etc). Yes, 100-year-old banks always have ongoing modernization with evolving technology (e.g. Citi and Chase have developed smartphone apps) but Uber's birth was programmers playing around with smartphones. Another example of the perception difference is eBay vs Sotheby's/Christie's. eBay is typically called a "tech company" but Sotheby's/Christie's are called "auction houses". If eBay brings together buyers & sellers in a marketplace... and Sotheby's/Christie's also has an auctions marketplace... why is "tech company" more often attached to eBay rather than Sotheby's/Christie's? (Both Sotheyby's & Christie's have websites for users to place bids so they develop technology as well.) Probably because eBay was born on the internet by a software programmer named Pierre Omidyar. I'm not saying you have to agree with all that but just trying to explain the "hidden taxonomy" that some of the others (including the news media) use to label certain companies as "tech company". [1] https://acquiredby.co/uber-acquisitions/ https://acquiredby.co/uber-acquisitions/
- dcolkitt 7y ago
  Definitely agree with you about Uber. Here's one clear way to see that Uber is a tech company. Imagine the senior management was all abducted by aliens tomorrow, and you had to replace them very quickly. Who would you rather bring in. A bunch of senior execs from Google or a bunch of former Taxi company managers? Which group do you think could run Uber better? Well I think the obvious answer makes it pretty clear that Uber is a company with tech at the very foundation of its DNA.
situational87 7y ago
It's a logical extension of the ponzi scheme that exists in the venture capital/startup world in tech. The fact that so many startups fail is irrelevant to the early investors in these companies, as long as you get in at or before Series A you have a good exit 90% of the time. Just force some artificial growth and wait for the next round of investors. Everyone who comes later... not so much. Very few good outcomes. So they're now just adding some more levels to the pyramid to try and push the scam down the line to the IPO market. It should be illegal, and would be if we had a functional SEC instead of what is effectively an empty building.
- woah 7y ago
  Do you have any numbers or anything concrete to back up that argument?
  - simplecomplex 7y ago
    VCs get management fees typically 2% of fund size. VC incentives are misaligned with LPs. Very similar to hedge funds. As long as they keep raising the money keeps flowing and they can delay showing a return. Whether the fund fails is irrelevant. There’s an endless supply of rich LPs like there’s an endless supply of kids with a “startup”.
rootusrootus 7y ago
I agree on WeWork, but Uber is clearly not a taxi company. They're closer to being a mobile app developer, though that still feels like it falls short of an accurate description.
- btown 7y ago
  Uber made the right call in that it's asset-light; they don't long-term lease medallions or have long-term contracts with landlords (any more than a similarly sized technology company would). The We subsidiaries, on the other hand, are dreadfully asset-heavy. They can't just pack up and move out of a city that's underperforming. And as we all know, agile is as much about knowing when/how to stop doing something as it is about moving fast in doing new things. My only sadness is that this is so apparent that it will be immediately reflected in We's price, and there's likely not much opportunity to short these guys.
- browningstreet 7y ago
  I mostly agree with you, but I think what's happening here is reminiscent of the e-commerce vs brick&mortar debates from years ago. Ultimately, Amazon started as an e-commerce business that has a whole ton of brick and mortar capital and infrastructure. For a long time, tech companies wanted to do everything virtually (apps, cloud, etc) and people NOT from the tech industry had an understanding of the brick & mortar world and harnessed tech to create a boom of some kind. I think Uber is like that, in that the level of tech needed -- not just an app, but a global infrastructure that has to stay up and takes payments in a lot of countries -- when married with the real world, created a kind of behemoth. They're also financial structure jockeys, and We is more contracts & funding and not really all that much tech.
  - OJFord 7y ago
    > but a global infrastructure that has to stay up and takes payments in a lot of countries To play devil's advocate though, that's just the 'back office' updated to replace manual book keeping with automatic software. (Well, 'just'.) I think we can usefully describe companies as both 'tech-heavy company in the <domain>' and '<domain> company that uses tech' depending where the emphasis should be for a particular sentence. It just doesn't really mean anything to me alone.
OJFord 7y ago
Can you define it (as opposed to giving examples) in a way that calls any non-hardware-producing company a tech company though? I sort of want to agree, but it seems like any software manufacturer is 'a <domain> company that uses tech, not a tech company' if you keep going. WeWork, absolutely though. Honestly, the news to me here is that anyone thought it was or called it a tech company.
- wolco 7y ago
  Garmin makes the tech. Strava provides a tech service on top. Ubiome - software for lab results
- notatoad 7y ago
  If your revenue isn't driven by your technology, then you aren't a tech company. If it is, then you are. There's tons of software companies that make money by selling (directly, or by charging licensing, usage fees, etc) for their software. WeWork isn't selling software, or any other form of technology. They're renting property.
  - OJFord 7y ago
    So if Uber's model was subscription-only software that enabled ~unlimited~ fair usage many rides, it would be a tech company, but as it is it isn't? I'm not disagreeing with the conclusions about WeWork and Uber, I just think it's hard or not possible to define what it is, and what does it really mean anyway: to varying degrees any company in any sector is enabled by 'tech'.
    - notatoad 7y ago
      >if Uber's model was subscription-only software that enabled ~unlimited~ fair usage many rides I have no idea what this sentence means. But if Uber was a company that sold software to taxi companies then they'd be a tech company. As it is they sell car rides, not software, and so are a taxi company more than they are a tech company.
gooseus 7y ago
I think the question is, if you removed their tech, would they still have a product? For WeWork, yes, absolutely. Uber, not so much. Of course, being dependent on tech doesn't make you a tech company, but I think it's a simple heuristic to quickly falsify the WeWork cases.
- Agathos 7y ago
  Are banks, airlines, hospitals, or big retailers not named Amazon tech companies? If you took their tech away now, could they stay in business?
SkyPuncher 7y ago
It will end when the regulation catches up. I worked in the gig economy space for two years. Literally, the only reason to be a "tech company" is to claim you simply provide the technology and aren't responsible for how people use it (aka employment law)
nabnob 7y ago
It's a property company that's planning tracking everything people do in their buildings. >WeWork's latest acquisition is a small software company with 24 employees. Euclid is a spatial analytics platform...Euclid's website says the company is "focused on redefining the workplace experience of the future." Translation: optimizing every aspect of the physical workplace so workers are their most productive. Euclid does this by tracking how people move around physical spaces. Its technology can track how many people showed up to a meeting or to that after-work happy hour. The company can see where employees tend to congregate and for how long. It's all done over Wi-Fi. https://www.inc.com/betsy-mikel/wework-is-trying-a-creepy-new-strategy-it-just-might-signal-end-of-workplace-as-we-know-it.html https://www.inc.com/betsy-mikel/wework-is-trying-a-creepy-ne...
- novok 7y ago
  It's a physical workspace analytics company! /s
odiroot 7y ago
Yep, at some point in the past every business started to use cars to bring supplies or delivery products. Are they all car companies? And before were all companies horse companies?

rolltiide 7y ago

Yeah its mostly a factor of what VCs they tap and their portfolio companies coupled with how a company spends. High burn high growth Draper Capital? Tech company.

pcora 7y ago

A hell of a taxi company with that many engineers and research and development areas. But I agree on WeWork as a real estate company. They are not creating anything.

chasing 7y ago

When it stops making someone money.

Jestar342 7y ago

I think it's the trend of bringing tech to an existing market. When that stops, we'll probably stop calling it tech companies. Uber is the perfect example of a "tech company" - they brought technology (and in this context "tech", arguably, means "the internet") to an industry that was previously dominated by standing on a street and waving down a cab/taxi. However I think it is rather pithy to just call them a taxi company with an app, right? There's a lot of tech "magic" involved in Uber from the real-time connections on a such a massive scale, to the geo-fencing, price/route estimations, and the massive amounts of infrastructure management and maintenance needed to bring that to however many millions of people use the service.

lotsofpulp 7y ago
In my mind, the main feature of a tech company is the ability to scale due to almost zero marginal costs, compared to other companies which need much more time and resources, which is also why tech companies can have such huge profit per employee numbers.
- ghaff 7y ago
  That's very specific to software that doesn't need much support. I think Intel is probably considered a tech company and they certainly can't scale at near-zero marginal cost.
jcranberry 7y ago
>However I think it is rather pithy to just call them a taxi company with an app, right? Perhaps you mean reductive? A pithy statement would be one which has identified the core of something or is very meaningful despite being terse. It is very positive.
pdonis 7y ago
> There's a lot of tech "magic" involved in Uber I agree this is true of Uber, but is it true of WeWork? It seems like the comparison with Uber just makes WeWork look even less like a tech company.
- autokad 7y ago
  I agree, I don't see how wework is a tech company other then the fact they probably service mostly tech companies. I was stationed at wework for a while, I liked it. But I don't see how tech is involved
  - CydeWeys 7y ago
    WeWork to me seems similar to a chain gym. Both have shared physical facilities and manage a membership database that allows you to get in (and also provide WiFi). Yes, there's computer systems involved, but any company of any reasonable size is using computers these days.
TazeTSchnitzel 7y ago
But we don't call, say, banks tech companies. A huge portion of their business requires sophisticated technical infrastructure they create themselves, but we just call them banks. And there are plenty of normal taxi companies with similar systems to Uber's.
- afarrell 7y ago
  People call Monzo a tech company.
  - novok 7y ago
    'fintech' specifically. It's almost a style designator.
- ulfw 7y ago
  There's a ton of tech involved in all kinds of companies: hotels, airlines, hospitals, insurance companies, anything really. None of them are "tech companies". Neither is Uber/Lyft/Grab
- jasode 7y ago
  >But we don't call, say, banks tech companies. A huge portion of their business requires sophisticated technical infrastructure they create themselves, but we just call them banks. I understand your criteria for classification but I'll attempt to explain why others think of Uber as a "tech company". Others' viewpoint: Yes, virtually every company uses technology but not every company is birthed by technology: - the Uber founders (Travis K and Garrett C) were software programmers, not taxicab owners. - the product they worked on was a smartphone app instead of buying a car with a taxi medallion and driving around for fares. - the type of investors that funded them (e.g. Benchmark Capital) were VCs that specialize in the tech sector. - the type of companies Uber has acquired[1] so far are tech focused (e.g. machine learning, geospatial, etc). Yes, 100-year-old banks always have ongoing modernization with evolving technology (e.g. Citi and Chase have developed smartphone apps) but Uber's birth was programmers playing around with smartphones. Another example of the perception difference is eBay vs Sotheby's/Christie's. eBay is typically called a "tech company" but Sotheby's/Christie's are called "auction houses". If eBay brings together buyers & sellers in a marketplace... and Sotheby's/Christie's also has an auctions marketplace... why is "tech company" more often attached to eBay rather than Sotheby's/Christie's? (Both Sotheyby's & Christie's have websites for users to place bids so they develop technology as well.) Probably because eBay was born on the internet by a software programmer named Pierre Omidyar. I'm not saying you have to agree with all that but just trying to explain the "hidden taxonomy" that some of the others (including the news media) use to label certain companies as "tech company". [1] https://acquiredby.co/uber-acquisitions/ https://acquiredby.co/uber-acquisitions/
dcolkitt 7y ago
Definitely agree with you about Uber. Here's one clear way to see that Uber is a tech company. Imagine the senior management was all abducted by aliens tomorrow, and you had to replace them very quickly. Who would you rather bring in. A bunch of senior execs from Google or a bunch of former Taxi company managers? Which group do you think could run Uber better? Well I think the obvious answer makes it pretty clear that Uber is a company with tech at the very foundation of its DNA.

situational87 7y ago

It's a logical extension of the ponzi scheme that exists in the venture capital/startup world in tech. The fact that so many startups fail is irrelevant to the early investors in these companies, as long as you get in at or before Series A you have a good exit 90% of the time. Just force some artificial growth and wait for the next round of investors. Everyone who comes later... not so much. Very few good outcomes. So they're now just adding some more levels to the pyramid to try and push the scam down the line to the IPO market. It should be illegal, and would be if we had a functional SEC instead of what is effectively an empty building.

woah 7y ago
Do you have any numbers or anything concrete to back up that argument?
- simplecomplex 7y ago
  VCs get management fees typically 2% of fund size. VC incentives are misaligned with LPs. Very similar to hedge funds. As long as they keep raising the money keeps flowing and they can delay showing a return. Whether the fund fails is irrelevant. There’s an endless supply of rich LPs like there’s an endless supply of kids with a “startup”.

rootusrootus 7y ago

I agree on WeWork, but Uber is clearly not a taxi company. They're closer to being a mobile app developer, though that still feels like it falls short of an accurate description.

btown 7y ago
Uber made the right call in that it's asset-light; they don't long-term lease medallions or have long-term contracts with landlords (any more than a similarly sized technology company would). The We subsidiaries, on the other hand, are dreadfully asset-heavy. They can't just pack up and move out of a city that's underperforming. And as we all know, agile is as much about knowing when/how to stop doing something as it is about moving fast in doing new things. My only sadness is that this is so apparent that it will be immediately reflected in We's price, and there's likely not much opportunity to short these guys.
browningstreet 7y ago
I mostly agree with you, but I think what's happening here is reminiscent of the e-commerce vs brick&mortar debates from years ago. Ultimately, Amazon started as an e-commerce business that has a whole ton of brick and mortar capital and infrastructure. For a long time, tech companies wanted to do everything virtually (apps, cloud, etc) and people NOT from the tech industry had an understanding of the brick & mortar world and harnessed tech to create a boom of some kind. I think Uber is like that, in that the level of tech needed -- not just an app, but a global infrastructure that has to stay up and takes payments in a lot of countries -- when married with the real world, created a kind of behemoth. They're also financial structure jockeys, and We is more contracts & funding and not really all that much tech.
- OJFord 7y ago
  > but a global infrastructure that has to stay up and takes payments in a lot of countries To play devil's advocate though, that's just the 'back office' updated to replace manual book keeping with automatic software. (Well, 'just'.) I think we can usefully describe companies as both 'tech-heavy company in the <domain>' and '<domain> company that uses tech' depending where the emphasis should be for a particular sentence. It just doesn't really mean anything to me alone.

OJFord 7y ago

Can you define it (as opposed to giving examples) in a way that calls any non-hardware-producing company a tech company though? I sort of want to agree, but it seems like any software manufacturer is 'a <domain> company that uses tech, not a tech company' if you keep going. WeWork, absolutely though. Honestly, the news to me here is that anyone thought it was or called it a tech company.

wolco 7y ago
Garmin makes the tech. Strava provides a tech service on top. Ubiome - software for lab results
notatoad 7y ago
If your revenue isn't driven by your technology, then you aren't a tech company. If it is, then you are. There's tons of software companies that make money by selling (directly, or by charging licensing, usage fees, etc) for their software. WeWork isn't selling software, or any other form of technology. They're renting property.
- OJFord 7y ago
  So if Uber's model was subscription-only software that enabled ~unlimited~ fair usage many rides, it would be a tech company, but as it is it isn't? I'm not disagreeing with the conclusions about WeWork and Uber, I just think it's hard or not possible to define what it is, and what does it really mean anyway: to varying degrees any company in any sector is enabled by 'tech'.
  - notatoad 7y ago
    >if Uber's model was subscription-only software that enabled ~unlimited~ fair usage many rides I have no idea what this sentence means. But if Uber was a company that sold software to taxi companies then they'd be a tech company. As it is they sell car rides, not software, and so are a taxi company more than they are a tech company.

gooseus 7y ago

I think the question is, if you removed their tech, would they still have a product? For WeWork, yes, absolutely. Uber, not so much. Of course, being dependent on tech doesn't make you a tech company, but I think it's a simple heuristic to quickly falsify the WeWork cases.

Agathos 7y ago
Are banks, airlines, hospitals, or big retailers not named Amazon tech companies? If you took their tech away now, could they stay in business?

SkyPuncher 7y ago

It will end when the regulation catches up. I worked in the gig economy space for two years. Literally, the only reason to be a "tech company" is to claim you simply provide the technology and aren't responsible for how people use it (aka employment law)

nabnob 7y ago

It's a property company that's planning tracking everything people do in their buildings. >WeWork's latest acquisition is a small software company with 24 employees. Euclid is a spatial analytics platform...Euclid's website says the company is "focused on redefining the workplace experience of the future." Translation: optimizing every aspect of the physical workplace so workers are their most productive. Euclid does this by tracking how people move around physical spaces. Its technology can track how many people showed up to a meeting or to that after-work happy hour. The company can see where employees tend to congregate and for how long. It's all done over Wi-Fi. https://www.inc.com/betsy-mikel/wework-is-trying-a-creepy-new-strategy-it-just-might-signal-end-of-workplace-as-we-know-it.html https://www.inc.com/betsy-mikel/wework-is-trying-a-creepy-ne...

novok 7y ago
It's a physical workspace analytics company! /s

odiroot 7y ago

Yep, at some point in the past every business started to use cars to bring supplies or delivery products. Are they all car companies? And before were all companies horse companies?