Companies like Goldman Sachs and General Electric have made it their slogan to say they are more technology companies than they are financial or industrial companies, respectively. So are they?
No. No, they are not.
While it’s catchy and a good recruiting tool to try to pry talent from going to Silicon Valley, these companies are financial and industrial companies that use technology. If you were a farmer who decided to use a tractor rather than horses, you didn’t become a tractor company. Or a technology company. You were a farmer that embraced technology and used it in your business.
It’s slightly different today as companies are using engineers to build applications that will enhance their business. But at the end of the day, these companies generate revenues from areas that are not classified as technology. Today, every company wants to be a tech company. It will drive up their stock due to higher price multiples. It will attract more campus hires from Stanford and Harvard. For management of companies that aren’t in tech, but want to be part of the ride, it makes a ton of sense.
Tech has been on an incredible run do to companies like the FAANGs, start-up unicorns like Uber and AirBNB, among others. Tech is a huge category. First, it was social then it was sharing and now it’s cloud. All are here to stay, but which will be at the top of the heap is impossible to know. Give it time and in the next cycle, Goldman Sachs may say they are a biotech company.
So are all companies tech companies? No, it just feels that way.