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There are 2 Worlds in the Tech Industry
Understanding the Bits and Atoms that Make Up Dominant Markets
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The tech industry is fundamentally a world of bits and atoms. There is software, and there is hardware.
While businesses can utilize both software and hardware, it’s best to identify the overarching strategy of a business through either of these paradigms. Understanding the tradeoffs between the world of bits and atoms is paramount to growing a business in the tech industry.
Weighing the Tradeoffs
The biggest factor is the cost-of-goods-sold.
Hardware companies spend a lot of money on operating, manufacturing, and shipping costs to produce hardware products. Corollary to these costs, there is a more stringent focus on contribution margins (gross margins per-unit sold) and price points.
While this may seem daunting, it creates a higher barrier-of-entry for potential…
