We need better phrasing than “tech IPOs.”
Here comes a rant, motivated by this TechCrunch article:
A Recipe Site Goes IPO, In Japan (Cookpad)
It seems that even in this downturn, there is still room for tech IPOs, at least in Japan. Cookpad [JP], the nation’s biggest site for sharing recipes . . .
SolarWinds was a true-blue “tech IPO” — they make software for enterprise network management.
But Cookpad, which is about to IPO in Japan, and OpenTable, which IPO’d on the NASDAQ last month, are actually consumer IPOs that do business via the Web.
This isn’t a nitpicky distinction. It’s a call for an end to sloppy thinking and reportage about non-technology-oriented companies that happen to do business online.
An easy example: Hoover’s has been doing business online for 15 years, and today we do the vast bulk of our business that way. That doesn’t make us a “tech company” like Cisco or HP or Symantec. We (and our parent company, Dun & Bradstreet) are a business information provider, and our peer group includes companies like Thomson Reuters and Dow Jones. The companies in our sector are increasingly technologically savvy, but that doesn’t make them “tech companies,” any more than Dell is a “financial company” because it’s long been savvy about investing its free cash flow.
Some companies — Amazon.com springs to mind — bridge consumer orientation and serious technology orientation, so it makes sense to talk about them in both contexts. But companies like Cookpad aren’t “tech companies” in any meaningful sense, and the fact that Cookpad — a profitable little outfit, from the looks of it — had a successful IPO doesn’t particularly speak to the prospects of the next SolarWinds or Rackspace to come down the pike.
Mind you: this isn’t to single out or pick on Serkan Toto, who wrote the TechCrunch piece that kicked off this rant. But Toto’s use of “tech IPO” reflects a broader anachronism that’s all too common in press coverage of the IPO market. This isn’t 1998, when the mere fact that a company did its business online was remarkable — and we need to get past that way of thinking if we want to take a clear-eyed look at the IPO market.
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Related:
- Hoover’s IPO Central
- A (relative) flurry of activity in the IPO market.
- Silicon Valley, the IPO drought, and the culture of innovation.
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Photo by Jacob Bøtter, used under a Creative Commons license.
Category: IPOs,Internet,The language of businessIf you liked this post, please consider subscribing to the RSS feed so you can receive future articles delivered to your feed reader.
3 Comments so far
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Tim, you raise an interesting distinction that I had never really considered. It boils down to companies who create technology vs. those that leverage technology doing their business. If we called every business that leverages technology “tech”, then where would it stop?
After reading this, I will never think of “tech” the same way again. I won’t be a bit surprised to find myself watching financial news, subliminally counting how many errant tech references pop up an hour.
Yes! — “companies who create technology vs. those that leverage technology doing their business” — that’s exactly what I was trying to say!
Glad if I’ve shifted your worldview on this. Now if only the major business media would catch on . . .
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