Traditionally, we associate tech companies with the likes of Silicon Valley giants like Apple, Google, and Microsoft, but the reality is that being a ‘tech company’ goes beyond the products one sells. It’s about how a business uses technology to power its operations and drive innovation.
Defining a tech company
At its core, being a tech company isn’t defined by the products a company offers, but by its strategic approach to technology. Take Tesla, for instance. While they are undoubtedly known for their electric cars, what truly sets them apart is their relentless focus on technological innovation. Tesla’s integration of cutting-edge software, like Autopilot and over-the-air updates, into their vehicles demonstrates how technology is undeniably part of their larger business model.
Similarly, Netflix, originally perceived as a streaming service, has evolved into a tech powerhouse. Its recommendation algorithms, content optimization, and personalized user experiences all rely on sophisticated technology.
The relevance of a product operating model
The product operating model can be a blueprint for success that applies across diverse industries. Businesses that make the best use of technology in their operations can significantly benefit from adopting this model. Whether healthcare, finance, logistics, or manufacturing, technology plays a pivotal role in greatly improving processes.
Digital vs. non-digital products
One common misconception is the binary division between digital and non-digital products. Many companies believe that the model is only relevant to digital offerings, like software or apps. However, this oversimplified perspective fails to grasp the true potential of technology integration.
For a fitness equipment manufacturer. Traditionally, their products were purely physical – treadmills, dumbbells, and resistance bands. However, by incorporating IoT sensors, mobile apps, and real-time data analytics, they’ve increased and improved their offerings. Now, customers can track their workouts, receive personalized coaching, and measure progress digitally. This blend of physical and digital elements epitomizes the product operating model in action.
Disruption and tech integration
Companies that get on board with new technologies tend to be more innovative and less susceptible to disruption. They continuously learn new market demands and deliver superior customer experiences. In contrast, businesses that limit the application of technology find themselves at risk of falling behind in an increasingly tech-driven world.