Digital is NOT Tech

The two terms are increasingly being used interchangeably but they are very different.

Web based applications are digital and the companies using them may or may not be “digital” and may or may not be “tech”. Most companies have a web presence even organizations like the DWP, so by that definition just about all companies are digital.

Companies that help companies sell on the web – e.g. marketing agencies can be described as digital.

The core distinction between digital and tech is whether companies produce defensible tech IP (see later) that other companies would want to buy e.g. “product”.

Ecommerce companies – companies that sell products online are, by definition, digital but most are not tech companies because they do not produce tech IP. Boohoo is a good example. If you ask them, they will tell you that they are a fashion company – a very good disruptive one. They make extensive use of technology produced by tech companies (ecommerce front-ends, warehouse management systems, distribution, payment systems etc. and use tech to integrate it into a seamless offering) but they are not themselves a tech company.

Ecommerce systems are produced by companies like SAP, Oracle, IBM, Amazon, Salesforce. These are tech companies. Amazon and Google have made huge investments in technology – they own the IP.

Venture Capitalists look to invest in companies that have defensible IP. Either that, or those that have a business model that is “disruptive” (e.g. Uber, Airbnb) or which otherwise provides a sustainable competitive advantage. I’d say that LadBible falls into the last category.

Digital and tech companies require different skills. Boohoo for example has a relatively small core of technical people 90% of the company is in other functions. Ecommerce systems are quite simple from a user’s perspective. Companies developing tech IP need a high percentage of very skilled software developers or a high level of computing skills.

These tech skills are not quickly and simply acquired. Malcolm Gladwell (Outliers) posited a 5-10k BoK hours (Body of Knowledge) to become an expert. This is not unrealistic. Many computing problems require a good knowledge of fairly advanced mathematics e.g. routing of vehicles, which is why the majority of computer scientists/programmers come from a STEM background. A STEM background isn’t 100% essential, there are some good people that don’t but my team working in Artificial Intelligence (AI) had an average of 2.8 degrees. You don’t acquire that level of knowledge on a 10-week course at the local Technical College.

Computing is a very broad subject and complex. Google for example has a team of 500+ working just on computer security. Computer Security requires a huge range of skills – no-one has them all, well over 10k hours BoK is required.

TechNorth bleats about there being a skills shortage. There are 5 straightforward things that companies can do to mitigate this. If they have done these and still have a problem, I am happy to assist – via @m2m_johnlewis in the first instance.

Another important issue is “women in tech”. First, it is mainly a supply-chain issue. Only 25% of STEM undergraduates are women. One solution is to make STEM subject free at university (see Labour Party manifesto) but it goes back to not enough women studying STEM at A Level. Our universities are failing us.

Short conversion courses will lead to relatively low-level jobs for women. Universities and companies need a bolder solution to increase tech skills. I refuse to believe that digital and tech CEOs will discriminate against women. If discrimination does exist, I will introduce them to my daughters.

So, in summary a shortage of digital skills can be solved quickly – short courses and in-house training/mentoring. Increasing tech skills is a longer haul but we already have a lot in the North and we can easily attract more. Top developers are £300k p.a. in San Francisco (many are £1m+ p.a.) and I’d expect to pay £100k here.

______________

Image – the cave where the dragons live at Tintagel

DWP claimed they wanted to be “Digital First” which is wrong-headed so whilst they may claim to be a Digital organisation they are not a Tech one because they have no defensible IP and no VC would want to invest in them. 

There is too much bullshit around “unicorns” – http://fortune.com/2016/06/20/europe-unicorns-gp-bullhound/

 

 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s