Virgin on Business: What Constitutes a Tech Company, Anyway?

Who knows? Your business may qualify.

By Bill Virgin August 29, 2017


This article originally appeared in the March 2017 issue of Seattle magazine.

Its impossible to pinpoint the moment at which the phrase tech company ceased to have meaning. Its easy to detect that, wherever and whenever that point was, were well beyond it now.

As evidence, we cite a recent response from a San Francisco-based company, Postmates, to a state Labor & Industries query into its workers compensation payments, or, more specifically, the lack of them. As reported by GeekWire, an attorney for Postmates told L&I it did not understand the nature or business of the company. Postmates is a technology company, the lawyer wrote. It employs code writers, marketers and technical staff.

And what niche of the high-tech universe does Postmates occupy? Biotech? Aerospace? Advanced materials?

Its a delivery company. Or at least it appears to be from its website, billing itself as the best of your city delivered in minutes. The Seattle portal lists all sorts of prepared foods and groceries available via on-demand delivery from restaurants and stores, as well as some hard-goods outlets like REI and Ace Hardware.

But Postmates insists its not a delivery service. Says the attorney (quoted by GeekWire), It is not a delivery service. It does not provide courier services in Washington (or anywhere else). It employs no couriers. No couriers work out of Postmates offices in Washington. The delivery people who bring you that delicious dish of Vietnamese takeout are independent contractors, the argument goes, supplying their own equipment and providing a service to you, not Postmates.

The Postmates case serves as a milepost to mark how far down the road weve traveled toward boiling all meaning out of the term tech company. It used to be easy to distinguish what constituted technology, or true innovation for that matter. The application of science to invent new products and processes was a reliable marker. With the emergence of computers, the term expanded to encompass what was quaintly thought of as data automation. Same deal with the internet.

These days, though, computer technology is ubiquitous at home and in the workplace. Does Postmates service really represent a tech-driven innovation? No doubt theres computer programming involved in processing orders. But local delivery is not new. Readers of a certain age will recall Buckys, the document-delivery service; it involved the use of another once-wondrous technology the telephone. Similarly, Uber is just a taxi with an app.

What about Amazon? Is it really a tech company? Half of it is, but not the more visible retailing half. Thats nothing but a tweaked mail-order catalog. If this is the standard, then McDonalds, which isnt managing a vast and complex global supply chain with pencils and dial telephones, is one of the worlds biggest tech companies.

Semantics matter because in conjunction with adopting the term tech company comes an attitude that being a tech company means operating in another realm, above mundane details like workers comp bills that are the concern of nontech companies. Its as though theyve been pulled over by a cop for speeding on the information superhighway, only to be told, Sorry, sir. I didnt realize youre a tech company. Continue driving 105.

Whether Postmates and others win or lose their arguments on employee-contractor disputes is a matter for regulatory and judicial proceedings wrangling over the finer points of labor law. But winning the argument that they should be regarded as tech companies, and whether that gives them special status? The court of public opinion might yet have something to say about that.

Monthly columnist BILL VIRGIN is the founder and owner of Northwest Newsletter Group, which publishes Washington Manufacturing Alert and Pacific Northwest Rail News.

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