It's time to stop calling every firm that uses technology a tech company

Defining a company begins by looking at what it produces and sells, not at what enables it to do so.

- Thomas A. Stewart and Patricia O’Connell

Online cycling-class provider Peloton isn’t a tech company. Nor are ride-sharing services Uber and Lyft, work-space provider WeWork, online fashion stylist Stitch Fix, meal delivery service Blue Apron, or content creator and curator Netflix, to name just a few that have been given that moniker.

The overuse of tech as the modifier du jour recalls the Internet-bubble age. In the late 1990s, companies that weren’t centered on clicks or whose online-oriented business was founded in vain added .com to their names to get Wall Street cred and attract venture capital. Now, it seems, tech is — or wants to be — a similarly magic word.

To be sure, digital technology is an enabler, maybe the most powerful one since electric power. Technology’s capabilities have grown to the degree that it not only has become essential to doing business but has transformed entire industries and sectors. For example, with Amazon in the vanguard, technology transformed retail. But Amazon is a retailer, not a tech company. Peloton, with its 21st-century, Internet-connected bikes, isn’t exactly Schwinn. Nor is it the cycling class at your local gym. Nevertheless, Peloton is a fitness company — a tech-enabled one, but a fitness company all the same.

It’s important to draw a distinction between what a tech company is and isn’t not only because mislabeling could portend another stock market bubble, but because management’s attention, like other resources, is limited. A tech-bedazzled management is liable to spend too much time, money, and energy on the underlying technology, or the touting of it, rather than on what will ultimately determine whether the company can grow, scale, and prosper.