What comes to mind for you when you say or hear the phrase “tech company”? For many in the general public, many might see images conjure in their minds of nap pods, daycares, beautiful offices with exposed brick, and so on. To outsiders, work practices in these companies are often seen to be very “contemporary,” where employees are given undue deference, and reports chat freely with managers as friends.
What’s more, many — including many of you — probably intuitively feel a certain kind of difference between some tech companies. It’s hard to quantify, but you might feel that some are more “hip,” “contemporary,” or “prestigious,” with some being more “stodgy” or “traditional” than others. With all this in mind, could there be said to be a quintessential tech company? What qualities would go into making a company a “tech company”?
Consider this question: which company feels more like a classic example of a “tech company” to you? Tata Consultancy Services, or Stripe?
…But why?
Despite that both of those companies listed above make software, I think we all know the answer to that question. It seems that there are traits about companies that would make some software companies “tech companies,” while other software companies are not. I think most people have a sense for this, but simply haven’t formalized these thoughts. Consider the following:
- All “tech companies” are software companies, but
- Not all software companies are “tech companies.”
This is best illustrated by the comparison above (between Tata Consultancy Services and Stripe) — both of these companies make software, but few people would say that Tata Consultancy Services is a “tech company” (more correctly, most would probably say something like it’s an “IT company”). But what is the source of this distinction we all seem to feel?
In my view, it’s work culture. More specifically: tech companies work in a certain, similar way — they tend to be very employee-centric, if you like. As Chandra Gnanasambandam, Janaki Palaniappan, and Jeremy Schneider write over at McKinsey:
[… B]uilding a software-centric business means building a software culture. This goes way beyond adding a few software veterans ... It requires building a culture that deeply values the creativity and artisanship of great engineering, elevates product leadership and a customer-first focus, and empowers a leadership team with a strong understanding of software business models and tech. [… C]ompanies might already accept the importance of software [but] they still tend to look at software as a capability that they can bolt onto their existing business. That just doesn’t work. Becoming a software business requires foundational change with different skill sets, practices, leadership, and organizational structures.
So, for example, at these companies, you might see things like “people ops” in place of “HR”; you might see these companies giving company-wide days off after big, political changes occur in the country, or sometimes for no real reason at all; you might see proclamations about commitments to “DEI” (Diversity, Equity, and Inclusion).
What’s more, there are product designers, and they work directly with software engineers and PMs; there is an expectation that their product(s) meet a certain quality bar, too. Consumers and their perception of one’s work is always felt in the air.
Regarding employee empowerment, you might hear “ask for forgiveness, not permission,” even from leadership at the company. Tech companies tend not to use the same words that other industries use, as well — for example: you might hear phrases like tech “company” (rather than tech “firm,” more common in other industries); words like “manager” are more common than “supervisor” or “boss.” After all, the IC/manager relationship is more akin to a player/coach relationship, rather than employee/boss.
There are visual and stylistic differences, too: people tend to wear street clothing at work; off-the-shelf, commercial tools are often used and demanded by ICs, rather than internally made tools by a centralized IT team (tech islands often have tooling made by internal product teams); I also notice that tech companies tend not to use any Microsoft products (e.g., use Slack when there’s no competition with Slack, and Gmail/Google Meet when there’s no competition with Google, etc. I’ve never used Teams, or Microsoft Office, or anything of the sort); and so on.
This is just a snapshot of tech companies of all sizes — from tech companies with eighty people, to tech companies that employ one hundred and fifty thousand. They can be publicly traded, or private. Regardless, they share a certain kind of way of working, talking, and building.
Why does this matter?
It probably doesn’t. But there is a clarification to be made here — I’ve chatted with people who work in IT customer support at places like private law practices, or at large IT consultancies, and many seem to believe that they work at tech companies. This is mainly because they work with technology. I don’t think this can be said to be correct, however, and my suspicion is the average person would agree. In the minds of the average person (and the average tech worker), there’s a large difference between working at Dell and working at Meta. I propose that that difference people feel in their minds is reflected in reality, as well.
Some examples to ponder
In an example that holds some real emotional value for designers this week, I propose that Adobe is a software company, while Figma is a tech company. I would also say that Disney+ is a software company (more accurately, a team that makes software inside of a media company), while Netflix is a tech company. Best Buy is a software company (they do actually make software!), but Amazon is a tech company. U-Haul is a software company (they also make software!), but Uber is a tech company.
I don’t mean to suggest that this is some kind of scientific system — there’s something inherently fuzzy about all this, as it requires one to consider a company’s internal culture and make judgments about it. That said, I think there is something to be said about general perception about what tech companies are, and those of us within — and without — the tech industry certainly do feel it. I don’t think that those perceptions are without merit, however, and I think they source from something real. But let me know what you think!
