Products & services

We’re discussing tech companies, not charities, so we know they exist to make money. Using our fairly broad definition of “tech company”, we can see there are a range of products and services they bring to the market.

Digital Electronics

In many ways, these were the original tech companies.

Digital electronics companies build the electronic devices you use throughout your day, including the device you’re using to view this guide now.

Modern digital electronics manufacturing is incredibly complex so most companies don’t actually build the components or devices themselves; they contract out the production to specialized manufacturers in Asia. These companies are huge in their own right, like Foxconn, who make devices like Apple’s iPhone and Amazon’s Kindle, and TSMC, who make the processors for companies like Apple, Intel, AMD and Nvidia.

Software

While digital electronics companies may have been the ‘OGs’ of the tech world, when most people hear the words “tech” or “startup,” they probably think of software companies.

Surprisingly enough, software companies build and sell software products. This includes our work applications, like Microsoft’s Office products, entertainment-focused apps like TikTok or Netflix, or search engines like Google. How each of these software companies makes money varies quite dramatically, so we’ll explore their revenue models in more detail later.

Internet-related (tech-enabled) services

These companies make heavy use of technology to power the services they offer to their customers.

One example is Doordash, which has built software systems to manage the complex logistics involved in its food delivery business. This includes:

• offering customers a wide range of food choices via their app
• supplying the customer’s order to the restaurant
• receiving payments from customers
• managing payouts to restaurants
• finding available workers to deliver food
• providing delivery staff with efficient routes to the customer’s address
• handling fraud issues and customer disputes when something inevitably goes wrong

As you can see, it’s a far more complex process than “phone the pizza shop, then pay the delivery driver in cash”.

E-commerce

Electronic commerce (or E-commerce) is the name given to companies that sell products over the Internet.

Amazon was an early pioneer in e-commerce, originally founded in 1995 by Jeff Bezos as an online bookstore, and it is now offering millions of products to people in markets worldwide.

More recently, platforms like Shopify have made it significantly easier for people to start selling products online, helping fuel huge growth in the e-commerce industry. Many ecommerce companies also benefited during the early days of Covid, as people worldwide switched from buying goods in stores to ordering online and getting them delivered at home.

E) All of the above

Of course, we also have the tech companies that are so large and wide-ranging in their product offerings that they effectively offer products within each category.

A great example is Apple: they sell electronic devices (iPhones, MacBooks, Apple Watches), software (the operating systems used on each device, like iOS, but also professional software like the video editing suite Final Cut Pro), internet-related services (Apple Music subscriptions or iCloud storage), and e-commerce (you can buy their products in their Apple.com website).

This all-around product strength is a key reason why Apple are one of the most valuable publicly traded companies in the entire world.

As mentioned earlier, we will continue to focus on the software, internet-related services and e-commerce tech areas for simplicity.