I’m proposing a new term—HyphenTech—to describe much of the tech landscape, in order encourage a better understanding of our current era of tech. Thinking of every new company as a “tech company” is too generic to be useful, but going just one level deeper is helpful.

Everybody wants to be a tech company. It’s a proven path to trillion dollar market caps. However, that path has also proven extremely narrow, only admitting a few companies into the cuatro comas club. Have we had 15 years of bad startups, or is something else going on?

I argue that many of the name-brand startups of recent years are fundamentally different from the tech giants, and that the expectations of these companies should be different. For companies, workers and investors alike, it’s important to understand the business landscape we actually live in, not a fantasy world where the next Facebook is just around the corner.

CoreTech and HyphenTech

I propose a division of the tech landscape into CoreTech and HyphenTech companies. CoreTech companies make their money by creating products and services that couldn’t exist before, by productizing research and development. The most familiar tech giants are CoreTech companies. By contrast, HyphenTech companies find their edge in existing markets by aggressively applying software solutions to existing problems. The focus of this piece is HyphenTech.

I’m coining HyphenTech to encourage a complementary way of thinking about tech businesses. Companies I would consider HyphenTech are usually described by the industries they are trying to disrupt, resulting in categories like FinTech, PropTech, and MusicTech. This perspective is useful, but I argue that it is also interesting to think about the commonalities that exist across these categories.

HyphenTech exists in markets where it is difficult to deliver a service as a pure technology solution.

HyphenTech market characteristics

Generally, HyphenTech companies have to deal with offline complexity, which cannot easily be digitized:

• Physical goods or supply chains
• Financial markets infrastructure
• Highly regulated markets
• Markets with government components
• Complex contractual infrastructure
• Value chain fragmented across companies

The hard part of HyphenTech is that technology can only revolutionize legacy industries incrementally. Legacy and non-technical parts of the value chain must be interfaced with technology. Adoption of new technology often requires the cooperation of multiple companies, with interests or capabilities that may not be fully aligned.

On the positive side, HyphenTech companies do not typically need to create entirely new markets or customer behaviors. The market opportunities can be quantified and analyzed with far less uncertainty than CoreTech opportunities.

A different kind of worker

Honestly, the HyphenTech idea came out of my self-interest, as I attempted to make sense of my own career. Every job I have taken is in a completely new industry, and yet, I’ve found success. Either I’m just a super adaptable genius, or there’s actually a common thread to these jobs.

In my experience, people who are successful in HyphenTech share some characteristics, that may be different from the ideal CoreTech employee:

• They enjoy going deep into subject matter expertise that may have decades of history.
• They do not get easily frustrated by problems that can’t be immediately fully solved by technology.
• They are able to communicate and collaborate well with people who don’t have a deep software background.
• They can figure out how to add incremental value.
• They can think strategically, in terms of the likely return-on-investment of solving a problem with technology.
• They know how to make build vs. buy decisions and avoid “not invented here syndrome”, applying preexisting technology where possible.
• They know how to build integrations with partners and vendors.

It would be useful for HyphenTech companies to know what skillsets make for successful employees and for workers to have a clearer idea of what skills to cultivate, aside from purely technical capabilities.

What does HyphenTech mean to you?

I could say more, but the goal of this piece is simply to introduce the concept and I’m really interested to hear whether it resonates with other people. Does the HyphenTech framing give you a new perspective?