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Comment by frgtpsswrdlame | Hacker News Reader

Tech startups get a sort of alternate financial analysis which is all about growth now, profit later because of network effects. But a lot of companies under the "tech startup" banner just don't seem like tech companies to me. Sprig isn't a tech company, its a food company, same for juicero and other food delivery apps. Uber shares similarities with tech companies and with taxi companies so why does it always get analyzed as a tech company and never as a taxi company? As this boom progresses we're at the point where basically any small company is labeled "startup" and then branded as somehow tech even if they just have a backend database and a flashy javascript website.

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It's because "tech" isn't an industry per say. Many of the industries that "tech" is disrupting have various operating models (and thus operating margins). I think we have another 20-30 years before we start re-categorizing businesses, but for now, people are taking advantage of the hype trains and just label their companies "tech".

Uber itself has a network effect.

The more riders there are, the more drivers you induce via price demand. With a large amount of drivers, you have quicker pickup times due to more drivers. With a large enough amount of demand, you make things like uberpool economically possible since the probability of another rider wanting a ride along your route is higher. With probability, you make it a near certainty over large numbers. It's kind of like insurance.

By having a large money stream available, you can create a tech advantage for things like uberpool to be better executed, where a city app competitor could not pool the income streams of many cities to make better tech.

Its due to the fact that VC's see "software eating the world" and they make a bunch of bets that push that mantra. Also, marketing the business to people and or investors follows the same pattern. News will eat up "this is uber for babies" and market it to people.

Uber for babies? The stork will finally be real!

Disrupting the fertility treatment industry? I wonder what Musk would do with that.

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