What makes a company a tech company?

question what makes a company a tech company

As a technology journalist and someone who receives hundreds of press releases every day, I can vouch for how difficult it is to define what makes a company a tech company.

By definition, a technology company is one that focuses primarily on the development and manufacturing of tech, but the line is becoming increasingly blurred.

Tech is no longer synonymous with just hardware or manufacturing (and rightly so!), but with digital becoming ever-present within the business environment, it’s never been more challenging to cut through the noise and distinguish hardcore tech from technology-enabled firms.

A digital strategy

Take Bloom & Wild, for example. You’d probably be forgiven for discounting a flower delivery service as a tech business in the first instance, but the London-based firm recently closed a £3.75m Series B round led by MMC Ventures, which incidentally solely invests in technology.

According to Bloom & Wild’s product director Sharon Anne Kean, being a tech company is about having an in-house technology team and every member of the company living and breathing digital.

“The vision needs to be firmly rooted in digital and the focus on how technology can simplify and solve problems,” she told Tech City News.

This is where it gets interesting. Many a company would argue that they are a technology business simply because they have a website or an online presence, but Kean doesn’t believe this suffices.

“Tech companies don’t put stuff on a website for people to see. They use a website to create a unique experience that is faster, easier and more memorable than any other,” she said.

Bloom & Wild, Kean added, is seeking to re-define the gifting experience through the use of technology; making it easier and more intuitive for consumers by leveraging tech across the business.

“We embody a tech culture, from design and development, to data analysis and customer delight. We approach problems with questions like: how do we automate our systems to make internal operations faster so we can focus on customers? Or, how can we quickly use dashboards to ensure we don’t waste any flowers in a week? We’re using tech to be more responsible with our resources and to create more time to be customer first, one of our key values,” Kean added.

Tech DNA

Colin Pyle, co-founder of CRU Kafe, a London-based startup that claims to produce compostable and organic coffee, agreed with Keane, stating that all businesses today use an element of tech: “Sometimes it’s at their core, sometimes it is a strand of their business that sits slightly outside their company ethos.”

“To us, tech is a mindset. It signifies an approach to business that is open to new ideas and change,” he added, claiming technology was in his company’s DNA.

People, he added, may have been running coffee companies for hundreds of years, but CRU Kafe couldn’t do what it does without tech.

Ultimately technology allows small companies such as CRU Kafe to communicate with consumers and provide them with a more ethical, and at times, more sustainable product.

“E-commerce has put the railroad tracks in place to access the market and tech undoubtedly enables us to grow, and ultimately do new things,” the co-founder explained.

Top to bottom

James Cox, CEO and co-founder of Simba Sleep, is perhaps too accustomed to defending the fact that he believes his company is a technology business.

“We see ourselves as a technology business and sleep company. On the surface, we get that it’s easy to think of us as selling mattresses, but the truth is it’s a combination,” he noted.

Cox said his business, which has raised £17.5m, is trying to transform the science and tech behind the whole bedroom and that creating the “world’s most advanced mattress” is just the start.

“We apply a holistic approach to technology from an organisational and product perspective,” Cox added. “It feeds through the business from the top to the bottom and it’s essential to how we operate.”

On the other hand, Cox highlighted how tech helps the brand scale for a lot less capital and challenged consumers’ perceptions of technology: “People don’t think of something as technological unless it has a switch or a screen.”

“It’s understandable how it [Simba’s mattress] may seem like just foam and springs but it’s actually an intricately balanced product and wouldn’t have been possible without technology. Many people don’t associate tech and textiles, yet innovation in the field is now incredibly advanced,” he concluded.

The legal perspective

But, what do the legal experts think? Peter Finnie, managing partner at Gill Jennings & Every, an intellectual property law firm, said the real test lies in seeing whether a firm obviously develops or manufactures technology.

Much of what traditional companies develop qualifies for R&D tax relief and is inherently patentable as there’s some technical innovation involved – whether this is a form of technology or a process.

“When evaluating online platforms and service providers, though, the mere use of a computer and the internet to deliver a service or commercial outcome – even if it requires some innovative programming or GUI design – does not a technology company make,” he added.

Interestingly, the lawyer posed the question of why YouTube and Facebook are often considered tech, while Expedia is not. The former, he said, have built and patented several novel technologies, while the latter simply uses tech to facilitate a business model.

“There are specific limitations and exclusions to patentability for computer programs. If the software merely implements a business method or game, it is not patentable. If it controls a technical process, it may well be patentable, and innovations that solve technical problems in the real world are also likely to be patentable,” Finnie explained.

So, although the definition of what makes a company a tech company is still unclear, one thing has become glaringly obvious: technology entrepreneurs and lawyers don’t always necessarily see eye-to-eye and there’s perhaps no reason why they should when it comes to this particular debate.

What do you think makes a company a tech company? Let us know in the comments section below or Tweet us @TechCityNews.