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A company that uses software automation to increase efficiency and improve margins at scale (thereby scaling non-linearly). E.g. a company that uses people to
by pavas 5y ago
A company that uses software automation to increase efficiency and improve margins at scale (thereby scaling non-linearly).
E.g. a company that uses people to calculate taxes is not tech, whereas a company that uses people and software to calculate taxes is a tech company if their use of internally-developed software gives them a significant competitive advantage over other companies in that market.
EDIT: Thinking about it a little bit more, a vegetable growing company is not a tech company unless they use software to drive down expenses so they can compete better, allowing their investment in software to give them a greater rate of return than a comparable investment in additional people/other capital. Typically the automation system is also licensed for sale externally at sub-linear marginal cost. This means that tech companies benefit from a faster rate of growth than a traditional capital-intensive business, while driving up productivity in their market.
- treis 5y ago>A company that uses software automation to increase efficiency and improve margins at scale (thereby scaling non-linearly). WeWork probably qualifies then. With sufficient scale they could bring technology to bear in order to increase utilization of office space. Especially to global companies that have ever changing needs for office space around the world. Of course, WeWork hasn't (AFAICT) accomplished that but theoretically they could.
- gumby 5y agoWell theoretically any company could do anything, so I suppose they are all tech, and all train companies too.
- treis 5y agoOne of the FAANGs started as a bookstore. So yeah, pretty much anything can turn into a tech company.
- gumby 5y agoIt was a tech business from the beginning. The tech they had to develop back then is free and commonplace these days so someone doing the same today wouldn’t count as “tech” imho.
- 1vuio0pswjnm7 5y agoTwo things that have scaled "non-linearly" are the number of computer users and the number of internet users. That growth will eventually level off.
- pavas 5y agoI'm not talking about growth though, I'm talking about marginal cost per service rendered. To serve twice as many people in a restaurant you need roughly twice the servers. You don't need twice the amount of programmers (and other workers) to serve Netflix to twice as many people.
- 1vuio0pswjnm7 5y agoYou are talking about the internet, though, which has experienced non-linear growth and obviously allows for an new means of communication and distribution. (Eventually it will not be "new" anymore.) Feel free to provide an example of a "tech" company that uses software automation to decrease marginal cost without relying on the internet for communication/distribution.
- 1vuio0pswjnm7 5y ago"I'm not talking about growth though, ..." The definition you provided included this bit about "(thereby scaling non-linearly)". If actual growth does not matter and the only criteria are marginal cost reduction and automation that requires software, then why mention "scaling". "Tech" companies are like pyramid schemes.^1 Unless there is growth, the "business" does not "work". This might have something to do with the fact that most of these companies do not generate enough revenue to survive, and rely on investment rounds to pay peoples' salaries. 1. Every participant had to recruit six new participants for the scheme to see any return from their own investment. "Tech" companies are not self-sustaining, they cannot draw the requisite investment to survive, without "non-linear" growth.