A company whose revenue is primarily derived from a technology characterized by high margin, high scalability and low fixed costs. One could also say that such a technology should be the primary differentiator for the product. The products therefore tend towards software and hardware as applied to a pre-existing market, but that's not an ironclad rule.
So for example not Tesla (high fixed costs, low margin), not Uber (negative margin), and not Amazon (the retail part is low margin; AWS actually fits).
And things like Wish clearly only if we're talking gross margin, not operating margins. The amount of ads they're running is crazy.
Know this mostly isn't looking for an answer, but I think HN typically means something along the lines of:
"one with a significant development arm of their employees/business that is crucial to the company's success"
So any company run off an app or website that's complex and well made is probably a "tech company" even if it's in the business of cars, e-commerce, or widgets. There's no hard and fast rule here of course, but we don't need to pretend we don't know the gist of what people actually mean, even if "tech company" is a misnomer in many ways.
And what's the use of that point? If people say X and many understand it means Y, even though by a dictionary/older meaning it can mean Z, being pedantic and trying to fight the natural language shift doesn't really help anyone.
> Do you know of any publicly traded companies that split out IT in their financials?
No, you'd have to be familiar with their internal practices. But let's be honest, you're just being pedantic now. It's fairly obvious from the outside which companies are "tech" companies.
> Do you consider Apple, which builds consumer electronics (e.g. hardware engineering) a tech company?
First of all, about 25% of their revenue comes from software services, and iPhone is the only segment with more sales. More than 1/2 of their profit (because the gross margins are much higher) come from software services, so Apple is probably a bad example.
But yes, of course they are a tech company. One of the first.
> It's fairly obvious from the outside which companies are "tech" companies.
It it though? You'll find a bunch of replies here with disagreements about what "tech" companies actually are, so how is that obvious?
> But let's be honest, you're just being pedantic now.
And I think you're being too obtuse. It's one thing to refer to "tech companies" as a general colloquialism (I do), but if you're going to try to start counting them, I think the distinction is important. You'll find pretty quickly that many companies started in the last 10 years will just call themselves tech companies (Nikola, WeWork, Palantir, etc. come to mind) but have slight variations on revenue generated from software services.
My bigger point here, as I've pointed out in other threads is that "tech" isn't a market - its an operating model. It's one to thing colloquially say "this is a tech company", but then when someone says "how do we count how many tech companies do X" then we start to get into a whole bunch of grey areas about how to measure something...hence my original comment.
> But yes, of course they are a tech company. One of the first.
It's a bad example, but it's still a tech company? I think you just proved my point :)
> It it though? You'll find a bunch of replies here with disagreements about what "tech" companies actually are, so how is that obvious?
I see a bunch of posts with definitions that are not well thought out and counterexamples. I haven't seen any counterexamples from my definition. Tesla, Uber, and Amazon all fall under tech in my definition. Starbucks does not, because their dev team is part of IT. They still do great tech work, but they aren't a tech company.
> It's a bad example, but it's still a tech company? I think you just proved my point :)
It was only a bad example because you were misinformed on their revenue model. I was saying it was a bad choice for you to use as an example because it is so obviously a tech company.
> but then when someone says "how do we count how many tech companies do X" then we start to get into a whole bunch of grey areas about how to measure something
There are many unmeasurable things, but we still measure them and look for trends. If I dump a pile of sand on your desk, and then another pile of sand that takes more space, the number of grains of sand is effectively immeasurable but it doesn't matter, we can still see the trend of bigger piles of sand.
You don't need a precise definition to look for trends, and we are talking about trends here. More tech IPOs than last year. We don't need a precise definition of what a tech IPO is to see a trend.
If every human stopped working at the company for a day the product would still work (not a meatspace product). The company will typically have a high GAAP gross margin.
Yes, this is exactly what I meant.
It’s just missing the fact that the popularity of posting S-1’s in general might be changing so charting the # of posts may be different than the real # of “tech ipos”