4 ms·

Just curious, how do you define what a tech company is?

philipov 7y ago
It's a really strange label. I think most people define it as "Whatever those crazy guys in Silicon Valley are doing/funding," because I can't imagine a world where there exists automotive manufacturing that isn't considered technology.
- systemvoltage 7y ago
  In addition, I think the definition of the term "Technology" is quite broad. According to the Oxford dictionary, Technology: The application of scientific knowledge for practical purposes, especially in industry. In the formal terms, tech industry is all industry that relies on scientific knowledge to gain leverage. What large industry today doesn't involve using science in some form or the other? Perhaps the industry of religion. It is hard to find one and there is a gradual curve between least scientifically based industry to the most.
  - philipov 7y ago
    Exactly. It feels like the term was invented by people who think that Information Technology is the only technology worth mentioning, and that's a bit perverse.
cerved 7y ago
Tech companies often spend most of their money on R&D. Manufacturing typically instead has high capital expenditure.
- philipov 7y ago
  While I agree that one would expect a tech company to spend a lot on R&D, I'm not sure how accurately this definition corresponds with what people mean when they say those words. Alphabet only had about 20% of its expenditures going to R&D in 2019, so does that mean it's not a tech company? Meanwhile, Tesla have had close to 50% of their expenditures going towards R&D year after year. Ford had less than 5% of expenditures go to R&D in 2019. By this measure, Tesla is definitely a tech company, but Alphabet might not be. I might... actually want to agree with that, but again, I don't think people who use the phrase would.
  - castratikron 7y ago
    To be fair R&D at 50% of revenue is massive. They are basically a university.
    - philipov 7y ago
      Actually, I looked at the wrong numbers. Their R&D is a lot more in line with other automotive manufacturers at 6.6% of total expenditures (for 2018). The majority of their expenditures go into Cost of Revenues (building and delivering the cars), with Operating Expenses being a distant second.
  - xiphias2 7y ago
    Actually Google was earlier a tech company, but it was reclassified into communications sector in 2018. https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKBN1F037G https://www.google.com/amp/s/mobile.reuters.com/article/amp/...
    - philipov 7y ago
      Facebook is also classified as Communications, and Amazon is Consumer. In fact, of all the FAANG companies, the only tech company is Apple. Microsoft and IBM, too, if you include them.
      - xkjkls 7y ago
        Why would IBM and Microsoft be in FAANG?
  - xkjkls 7y ago
    When people say tech company they mean tech margins. There is no indication that Tesla will ever be able to achieve that.
tonyedgecombe 7y ago
A company whose product is technology rather than something like advertising, media or hotel booking.

It's a really strange label. I think most people define it as "Whatever those crazy guys in Silicon Valley are doing/funding," because I can't imagine a world where there exists automotive manufacturing that isn't considered technology.

systemvoltage 7y ago
In addition, I think the definition of the term "Technology" is quite broad. According to the Oxford dictionary, Technology: The application of scientific knowledge for practical purposes, especially in industry. In the formal terms, tech industry is all industry that relies on scientific knowledge to gain leverage. What large industry today doesn't involve using science in some form or the other? Perhaps the industry of religion. It is hard to find one and there is a gradual curve between least scientifically based industry to the most.
- philipov 7y ago
  Exactly. It feels like the term was invented by people who think that Information Technology is the only technology worth mentioning, and that's a bit perverse.

cerved 7y ago

Tech companies often spend most of their money on R&D. Manufacturing typically instead has high capital expenditure.

philipov 7y ago
While I agree that one would expect a tech company to spend a lot on R&D, I'm not sure how accurately this definition corresponds with what people mean when they say those words. Alphabet only had about 20% of its expenditures going to R&D in 2019, so does that mean it's not a tech company? Meanwhile, Tesla have had close to 50% of their expenditures going towards R&D year after year. Ford had less than 5% of expenditures go to R&D in 2019. By this measure, Tesla is definitely a tech company, but Alphabet might not be. I might... actually want to agree with that, but again, I don't think people who use the phrase would.
- castratikron 7y ago
  To be fair R&D at 50% of revenue is massive. They are basically a university.
  - philipov 7y ago
    Actually, I looked at the wrong numbers. Their R&D is a lot more in line with other automotive manufacturers at 6.6% of total expenditures (for 2018). The majority of their expenditures go into Cost of Revenues (building and delivering the cars), with Operating Expenses being a distant second.
- xiphias2 7y ago
  Actually Google was earlier a tech company, but it was reclassified into communications sector in 2018. https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSKBN1F037G https://www.google.com/amp/s/mobile.reuters.com/article/amp/...
  - philipov 7y ago
    Facebook is also classified as Communications, and Amazon is Consumer. In fact, of all the FAANG companies, the only tech company is Apple. Microsoft and IBM, too, if you include them.
    - xkjkls 7y ago
      Why would IBM and Microsoft be in FAANG?
- xkjkls 7y ago
  When people say tech company they mean tech margins. There is no indication that Tesla will ever be able to achieve that.

tonyedgecombe 7y ago

A company whose product is technology rather than something like advertising, media or hotel booking.