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>Here’s a question: If Uber or Instacart or Fiverr are really tech companies, what technology have they created? It’s not the GPS or smartphones they rely on to

by jasode 6y ago

>Here’s a question: If Uber or Instacart or Fiverr are really tech companies, what technology have they created? It’s not the GPS or smartphones they rely on to connect workers and consumers: GPS got started back in 1973 and the iPhone appeared in 2007 (and that, itself, was preceded by the internet-connected BlackBerry). App-based service-delivery companies aren’t developing silicon chips like Intel or AMD, creating consumer software like Adobe, or making networking switches like Cisco. They don’t get money from inventing new tech, but from venture capital and by taking a slice of every transaction made by their contingent labor force. Yes, I understand that the paper's author is only using a narrow definition of "tech" to mean non-software non-programming products such as silicon or lasers. It may irritate the author but if a word has enough shared agreement by others, it won't matter if he disagrees with it -- because _others_ will still use it. To copy & paste a previous comment, 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". EDIT to reply: yes I agree that the "What “tech” communities understand from tech is high growth low capital businesses" ... is often included in the mental taxonomy of "tech" but there are exceptions. Youtube/Amazon are considered "tech companies" even though they are highly capital intensive. Datacenters with petabytes of harddrives to store videos and logistics warehouses consume a lot of capital. [1] https://acquiredby.co/uber-acquisitions/ https://acquiredby.co/uber-acquisitions/

mrtksn 6y ago
What “tech” communities understand from tech is high growth low capital businesses. What the author argues in the paragraph is that many of those business don’t actually invent technology but only do business using internet technologies. For example, somehow Uber is a tech startup but WeWork is not. Realistically, they’re about the same from technology perspective but WeWork happens to have capital intensive business model that is not suitable for the high growth that is expected from “tech” companies despite that both essentially use the same level of technology - software to organize a business model with an UI to integrate the participants.
- Animats 6y ago
  Yes, I understand that the paper's author is only using a narrow definition of "tech" to mean non-software non-programming products such as silicon or lasers. It may irritate the author but if a word has enough shared agreement by others, it won't matter if he disagrees with it -- because _others_ will still use it. Being identified as a "tech" company feeds into valuation. Uber, on the merits, ought to have a negative valuation. They bought growth by spending money from Softbank, funded by the Saudi sovereign wealth front. They subsidize every ride with investor capital. There is no plausible scenario in which the investors see a return on their investment.
908B64B197 6y ago
I have one simple rule to determine if a company is a tech company or not: Do they view tech (especially software) as a profit center or a cost center. That's it.

by jasode 6y ago

mrtksn 6y ago

What “tech” communities understand from tech is high growth low capital businesses. What the author argues in the paragraph is that many of those business don’t actually invent technology but only do business using internet technologies. For example, somehow Uber is a tech startup but WeWork is not. Realistically, they’re about the same from technology perspective but WeWork happens to have capital intensive business model that is not suitable for the high growth that is expected from “tech” companies despite that both essentially use the same level of technology - software to organize a business model with an UI to integrate the participants.

Animats 6y ago
Yes, I understand that the paper's author is only using a narrow definition of "tech" to mean non-software non-programming products such as silicon or lasers. It may irritate the author but if a word has enough shared agreement by others, it won't matter if he disagrees with it -- because _others_ will still use it. Being identified as a "tech" company feeds into valuation. Uber, on the merits, ought to have a negative valuation. They bought growth by spending money from Softbank, funded by the Saudi sovereign wealth front. They subsidize every ride with investor capital. There is no plausible scenario in which the investors see a return on their investment.

908B64B197 6y ago

I have one simple rule to determine if a company is a tech company or not: Do they view tech (especially software) as a profit center or a cost center. That's it.