What is a tech business/startup?

technology

Why would anyone ask such a question? One would think that everyone understands what a tech company is. Apparently not. It seems these days that any business in which the founder uses a laptop is a tech business/startup. It looks like everyone who uses technology to enhance their business in any way is a tech business. Apparently, it is now fashionable to be called a tech business or startup. Once you have used technology in any way to enhance or deliver your goods and services, you qualify to be labelled a “tech” business/startup.

Something Is Wrong
But something is wrong with that concept. Something is wrong because almost everyone today uses technology in one way or the other to enhance their business. From doctors to teachers to entertainers, technology is everywhere! Every business then becomes a tech business. Not.

A technology business, by definition, is one that offers technology as a product or service. The business either creates technology as a product or as a service. That is a technology business. Nothing else qualifies. Microsoft is a technology business. Apple is a technology business. Samsung is a technology business. Nissan is a technology business. Web4Africa is a technology business.

A business that merely uses technology to sell or scale is not a tech business. Same goes for a startup that merely uses technology. Technology businesses create and/or offer technology, be it hardware or software. They don’t just use it. Technology is the product or service that they sell. When next you hear that a business is “tech”, ask yourself this: What technology (service, software or hardware) does this business sell? If the answer is none, it isn’t a tech business. Simple.

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But Even More Is Amiss
The fallout of the above clarification is that many so-called “tech” blogs are writing stories about companies and startups that are not actually “tech”. Most of the businesses and startups hailed as “tech” businesses by many “tech blogs” are not technology companies at all. Not by a long stretch. Some of them are entertainment businesses. Some are online stores. These businesses use technology to create, process or sell, but do not sell technology. They are not tech businesses. Similarly, some “tech” blogs barely report or publish anything about tech.

See? See how the picture instantly changes? The tech ecosystem in Nigeria is actually much smaller than you probably thought it was. Many of the startups and businesses that are labelled as tech businesses and so touted everywhere we turn are not at all tech businesses. What do we have left then? Only a handful of businesses that qualify to be called “tech”. A small handful.

It isn’t compulsory to be a “tech” business in today’s age. Business owners, bloggers and reporters need to get this sorted out and stop confusing people. A business that uses technology to sell entertainment is not a tech business. A business that runs an online store selling shoes, bags, food and clothing items is not a tech business. These are all valid businesses and there is nothing wrong with that. There is also nothing wrong in the fact that they are technology users like everyone else. However, to call them tech businesses? Please spare me the crap.

Mister Mobility

I started blogging about mobile in 2004 as a fun way to share my passion for gadgets and mobile services. My other interests include digital media, speaking and teaching, photography, travelling, and dancing.

23 thoughts on “What is a tech business/startup?

  • May 10, 2013 at 9:30 am
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    Mr Mo, wa gbayi jare! I think it’s the “tech” bloggers that are messing with our heads. The idea that every business that uses technology is a tech biz is too simplistic because by that definition every business that has online presence will then be a tech biz. I was genuinely confused when I started reading about Jumia, Konga and ndani as tech biz on most tech blogs. Most of the discussion around these 3 should be under an enterpreneurship or business blog or simply a start-up blog and not a tech blog. And by the way why is there no unique start-up blog in Nigeria just dedicated to start-up advice, help etc or is there and I’m missing it? Everyone just want to blog “tech” and ends up mumbling everything together.

    • May 10, 2013 at 10:50 am
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      tosin_lua, you said:

      I was genuinely confused when I started reading about Jumia, Konga and ndani as tech biz on most tech blogs. Most of the discussion around these 3 should be under an enterpreneurship or business blog or simply a start-up blog and not a tech blog.

      That is only part of the problem. There is also a lot of reference to those entities you listed, especially Jumia and Konga, as startups. Apart from the fact that they are not “tech”, they are also not “startups”. They run on a well established business model. I am not sure why anyone refers to them as both tech and startup. They are neither.

      Our tech blogs keep muddling everything up, but then again, the issue of startup is beyond the focus of this blog post.

  • May 10, 2013 at 10:03 am
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    I disagree with your definition of a startup. The word “startup” doesnt necessarily belong to the technology ecosystem. Going by the definition wikipedia “A startup company or startup is a company, a partnership or temporary organization designed to search for a repeatable and scalable business model.” Lets go a bit further and take the definition from an authority technology blog Mashable “Startups are companies set up to test business models developed around new ideas.” The fact that the first set of startups were core technology companies doesnt mean an entertainment company, online store, or even Educational Tutorial service company can’t be startup.

    • May 10, 2013 at 10:09 am
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      Henry, you said:

      I disagree with your definition of a startup.

      Nowhere in my article did I define or attempt to define a startup. My focus was on the definition of what qualifies as “tech”. Cheers.

  • May 10, 2013 at 10:06 am
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    Nowhere in the definitions I cited was it mentioned that you have to sell a technology product or service to qualify as a Startup.

  • May 10, 2013 at 10:17 am
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    You didn’t define anything explicitly. But you described what a Startup is in your article. You related your argument about technology businesses to Startups. I can point you to those in the article if you want me to.
    I had to bring in definitions to show that you thoughts on what or who a startup should be isn’t correct.

    • May 10, 2013 at 10:35 am
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      Henry,

      Again, I didn’t define a startup. A startup is a business, and every business offers or sells something – a service, software or hardware, whether or not it is in startup stage and so still exploring a model for operations. I know what a startup is. Nowhere in my article did I focus on describing what a startup is. Focus on the subject at hand please. This distraction is unnecessary. The question is: What qualifies as a “tech” business or startup?

      Thanks.

  • May 10, 2013 at 10:38 am
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    Let me leave other readers to critique your article, seems you will rather express irritation than read through an article I am assuming you wrote yourself.

    • May 10, 2013 at 10:46 am
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      Let me leave other readers to critique your article, seems you will rather express irritation than read through an article I am assuming you wrote yourself.

      Henry, Splendid decision, dear sir. Cheers.

  • May 10, 2013 at 10:46 am
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    The first question to ask is ‘what is technology?’
    According to Word Web dictionary, technology is :

    ‘The practical application of science to commerce or industry.
    The discipline dealing with the art or science of applying scientific knowledge to practical problems.’

    Technology is not restricted to processors, semi conductors or writing codes.

    So I think the online stores creating a platform to solve shopping problems qualify to be called technology companies. If not, a company that creates an app to hail taxis should not feature in Tech crunch and other blogs.

    My 2 kobo.

    • May 10, 2013 at 11:00 am
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      Abimbola,

      A company that creates an app has applied scientific knowledge to create something to solve a problem or meet a need. That is a tech company. An online store has created nothing. Rather; it sells goods. The difference seems clear to me.

  • May 10, 2013 at 11:08 am
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    Honestly, I’m surprised at Henry’s response to this article. I had to go read the article again to be sure I understand it. I’m of the opinion that the article is about businesses that are erroneously called TECH business when they are not. So where did the argument about start-up or not come from? Perhaps you need to read the article again.

  • May 10, 2013 at 11:19 am
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    This debate has been going on for ages now. I think most definitions on this subject matter causes more trouble. We may do well to leave things the way they are. For instance you say Jumia and Konga aren’t tech companies/startup but uber the taxi company will be described as one. While essentially, both are same. One provides offline goods using technology, the other provides the usually offline cab ordering service using technology. Many more examples of these clashes.. We might as well leave these things… Again, I just saw that Konga and Jumia aren’t startups. Why aren’t they? Cos they got big funding and operate like big companies already? Or cos you said they have established business models? Fab.com for instance, is considered a a startup and they have about the same ‘established business model’ with every other ecommerce startup… The lines between these definitions are really blurred… We should leave definitions and concentrate oin building awesome products that will help us 😀

    • May 10, 2013 at 11:40 am
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      but uber the taxi company will be described as one

      Dikachim, I didn’t say anything about an “Uber the taxi company”. If Uber creates its own platform i.e. develops its own app, it is tech. If it is just using something created by someone else, it isn’t tech. Very easy, as far as I can see.

      Definitions are important to everything. If we “leave things as they are”, Linda Ikeji qualifies as a tech business, after all she is using tech just like Jumia, Konga and others. No?

  • May 10, 2013 at 11:20 am
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    Mr Mo, but an online store created a platform to solve the hassles of shopping.

    What does twitter sell?

    • May 10, 2013 at 11:37 am
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      Abimbola,

      If the store created the platform, yes; they are a tech business in addition to being an online store. If they are only using a platform created by others, they are just an online store. Twitter created and maintain the platform, and so are a tech company, in addition to being whatever else they are by virtue of social networking. Twitter sells usage of the platform that they created.

  • May 10, 2013 at 12:10 pm
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    No You didn’t mention any of those. I just used them as examples cos they’ve been mentioned as tech startups on Techcrunch and the likes…
    So, you’re now basically saying that if Konga and Jumia built there own ecommerce platforms, then they’re qualified to be tech startups?

    • May 10, 2013 at 12:25 pm
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      Dikachim,

      Yes; a software development company is a tech company. It creates tech. Facebook and Twitter, for example, are both tech and social.

      If the company is just a user of tech, it isn’t a tech business. Everyone uses tech.

  • May 10, 2013 at 12:36 pm
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    // A technology business, by definition, is one that offers technology as a product or service //

    // If the company is just a
    user of tech, it isn’t a tech
    business. Everyone uses
    tech. //

    Hmm…

    I think the NATURE of the final product or service is what determines if you are a Technology Company, or NOT.

    The final service offered by Twitter ain’t technical, it is SOCIAL.

    So, Twitter, Facebook, Konga , Jumia , are NOT tech companies.

    Like somebody said, what’s in a definition? What’s a tablet? What’s a smartphone? Who’s a…..

    My two kobold!

  • May 10, 2013 at 12:56 pm
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    Spot on Mr Mo. I was going to use linda ikeji earlier as reference in response to the guy who implied any company that uses existing technology for their business is automatically a tech company.

    Different offices/businesses/corporations make use of technology everyday to enhance their business. It doesn’t automatically make them tech companies. Take banks for example. Are they also tech companies because they use existing technology to make their services better?

  • May 10, 2013 at 4:05 pm
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    There is no business on earth that doesn’t deploy technology, even in Education and the porn industry! So does that imply all businesses are tech business? Definitely not. There certainly has to be a determinant for what is ‘tech business.’ And it is any business that offers technology product or service. Jumia, Konga and co sell clothes,electronics etc, NOT softwares!

    Uber the taxi company gives out its code-developed platform (not food, clothes etc) the user then uses the app to secure taxis. Developers give out/sell Twitter APPS (not perfumes, movies etc) but the user uses it for social networking! These latter two are tech companies. The former aren’t. It’s pretty clear!

  • May 11, 2013 at 11:41 pm
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    …and that, my friend, is why I don’t like definitions. You are limited to see the thing you defined within the confines of your definition, and hardly any definition is ever completely adequate, or ever captures the entire essence of the thing.

    Essence is what matters, not definition. The essence of Konga, Jumia and co are to sell products, day to day items. Whether they make their own apps in doing it or they make use of websites, the essence is good old buy and sell, and as such, I wouldn’t call them a tech company.

    Facebook, on the other hand, it is essentially an ad platform, it develops its own apps, uses tech in different ways, but it is still for ads.

    Google, for example is a mixed bit, but I would stiLl lean on calling them a tech company as they support and develop Operating Systems, design hardwqare etc..that falls into the realm of tech…

    So, my own view, look at the essence of each company/startup/venture, see their essence, the reason for their existence, and you’ll know what category to put it into

  • June 12, 2013 at 1:10 pm
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    While you are busy defining what makes a startup or a tech company or not, iroko, zappos, konga, reddit, hipmunk, square, jumia are building fortunes.

    Your business should be to solve a problem in a scalable. I don’t care if you consume technology, outsource it and reinvent the wheel yourself.

    Google Steve Blank’s definition of a startup or check out what Paul Graham thinks of a startup.

    I will rather you argue with the legends.
    Thank you.

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