Hacker News Reader

Comment by legitster | Hacker News Reader

If anyone is ever pitching a non-tech product as a "tech" product, don't touch it with a 100 foot pole.

For companies we traditional would consider "tech", the product margins (the cost for each unit of X you sell) needs to be non-linear, and approaching zero.

It's clear that existing real estate and service industry investors laughed their heads off at WeWork's valuation. Adam Neumann's trick was to market his business to naive investors as "tech" and ride the rest as a speculative bubble. But fleecing the initial investors was tantamount to legalized fraud.

Other famous businesses that are also "not-tech" include Spotify, Tesla, SpaceX, and Apple's hardware division.

View on HN

Totally. And my favourite: Netflix. They spent so much time and effort with the whole microservices architecture and being a "tech business" that they forgot that companies like PornHub do a much larger scale of video and networking than they do without any of that complex nonsense.

What makes Netflix not a tech business?

Do you have any sources for that claim that MindGeek uses a much more boring setup vs. what Netflix is doing?

PH has the advantage that it's only browser based and doesn't have to be available on a massive number of (legacy) devices, tv platforms, game consoles, phones etc.

Their product is TV shows, not "tech". Same as Spotify with audio. Walmart has a ton of tech underpinning their supply chain...should they be valued as a tech company too?

Netflix is like 10% of all internet traffic. Pornhub doesn't move nearly as many bits.

https://inform.tmforum.org/features-and-opinion/six-companie...

Is Netflix a tech company today? Probably not. They're more of a media company. They focus so much on original content these days. I'd say back when they were pretty much creating the movie streaming industry they were though.

>Netflix is like 10% of all internet traffic. Pornhub doesn't move nearly as many bits.

On the other hand they serve more people/visitors

Also Netflix uses edge/ISP-level CDNs more heavily because e.g they have way, way, way less content than PH

https://about.netflix.com/en/news/how-netflix-works-with-isp...

>We also give qualifying ISPs the same Open Connect Appliances (OCAs) that we use in our internet interconnection locations. After these appliances are installed in an ISP’s data center, almost all Netflix content is served from the local OCAs rather than “upstream” from the internet. Many ISPs take advantage of this option, in addition to local network interconnection, because it reduces the amount of capacity they need to build to the rest of the internet since Netflix is no longer a significant factor in that capacity. This has the dual benefit of reducing the ISP’s cost of operation and ensuring the best possible Netflix experience for their subscribers.

How is even Netflix 10% of all traffic with those "CDNs" at ISP's server room?

How is it even accounted in your statistics, I do wonder.

Netflix is a also a low margin business because most of their content now has per-view licensing fees associated with it.

But at least they are transparent with themselves and investors about their margins and are not promising huge future windfalls!

I agree with what you're saying, but terminology needs to be clarified.

"Tech" nowadays means the more-narrow "information tech".

There are other industries that have technology (for example aircraft) but the pace of development is so slow nobody considers it tech anymore.

Well that's kind of my point that "tech" is an ill defined word, but people use it to "heavily imply" a certain kind of business model.

It would also be silly to call an aircraft company a "technology" company - I think most investors should consider them a manufacturing concern.

True nowadays but if you're living in the year 1920, aircraft is much more of a tech company.

They made their money manufacturing planes, not developing the technology. In the year 1920 they would have called themselves manufacturers and described themselves to investors as manufacturers. And investors would have cared about things like unit economics.

I understand what you are saying, but when we describe a company as a "tech company" we are talking about something specific about their business model - not necessarily how innovative their products are.

Well if my Tesla, SpaceX and Apple isn't technology I don't know what is...

We're talking about "tech" as a stock market categorization. Tesla and SpaceX should flatly be compared to other manufacturing companies when evaluating their fundamentals.

And I was pretty clear when I said Apple's hardware. Their real cash-cow is their app store.

well for their definition of tech "approaching zero cost", the only tech companies are pure software ones, the cost of manifacturing a rocket can hardly approach zero

Reply on news.ycombinator.com