Are You Running a Tech Company or a Tech-Enabled One?

The economy loves tech-enabled companies right now, and -- let's face it -- the human brain has a lot left to offer beyond what algorithms and lines of code can produce. Here's how to own the success of your tech-enabled company.

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By Erik Huberman


Opinions expressed by Entrepreneur contributors are their own.

Think you're running a tech company? Maybe not. You might actually be running a tech-enabled company. So what's the difference, and why does it matter?

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We'll get to "why" in a bit. But first, the difference might just come down to this: clothes that fit versus a style that fits.

Hear me out: Consider This London-based startup can run you through a 3D body scanner that records your measurements and turns a host of online clothing retailers into virtual dressing rooms.

You want clothes that fit? built tech tools to help. And, because of that, it's a tech company.

On the other hand, The Chapar can find you clothes, but the website's promise goes beyond that by linking customers to stylists who can help create the look they're seeking. It's a website with a personal touch behind it. This is a tech-enabled company.

Co-founder Sam Middleton says he's just fine with that: "An algorithm alone could not produce the service our customers deserve," he's said. "Our use of technology is centered on the idea of helping the human interaction, not replacing it."

Wear the right clothes.

Clearly, Middleton is comfortable in his own skin -- or, in this case, his own clothing. He's dressed his company up by making it tech-enabled, but it's not a tech company. This is an important distinction because the two are very different animals. Success for one looks different from success for the other.

Tech-enabled companies are hotter than ever, and demand is booming. A survey of CEOs found that 37 percent prioritized investments in tech to help with customer engagement, 32 percent prioritized digital marketing and 28 percent categorized business analytics as their top investment priority.

That's the "why" we touched on earlier.

These issues extend beyond the United States; China's feeling the boom, too. Last year, industry watchers declared that country's "old economy" stalwarts to be suffering, while newer, tech-enabled businesses leveraging the internet, social media and mobile devices were seen as thriving.

Note the word "leveraging." Tech-enabled companies aren't building the internet, mobile devices or social media platforms; they're using those technologies. Tech companies build the hardware, software, algorithms and platforms. They have armies of developers gulping energy drinks and coding their little hearts out.

Tech-enabled companies use the tools those coders create to enhance their core businesses, and they measure success differently. An ecommerce company -- by definition, tech-enabled -- cares about measuring traffic, purchase rates and other ROI indicators. The tech company that built the ecommerce platform succeeds if the platform scales quickly, takes no time to update and generally makes life easier.

Related: Your Technology Initiative Failed, Here's 8 Reasons Why

Make technology your servant (instead of, well, you know).

Embrace the fact that yours is a tech-enabled company. The economy loves you right now, and -- let's face it -- the human brain has a lot left to offer beyond what algorithms and lines of code can produce. Here's what I mean:

First, acknowledge that tech doesn't create results -- people do. I run a tech-enabled marketing agency that uses Facebook Ads and digital media to boost our clients' campaigns. We outperform the average agency's ROI on this platform by 300 percent.

Why? Because we're not leaning entirely on Facebook algorithms. We lean on our staff because technology doesn't optimize -- people do.

That's reflected in research that's shown that small- and medium-sized businesses value technology but don't always use it. For example, only 30 percent of those surveyed said they'd adopted new tech such as cloud computing. They may watch the trends, but they're wary of the value.

So, yes, use technology, but make sure you're actually making improvements with it. Don't just throw tech at a problem.

Second, when you use tech as your servant, vet multiple technologies for the same solution. We manage projects, a lot of them. We tried Basecamp but found that it didn't fit our way of working because it was rooted in an overall project approach rather than one tracking individual tasks. So we decided to look elsewhere. We landed on Wrike and found that it fit our task-oriented approach better.

Another example: Slack is the darling of the "corporate social networking" space, providing internal communications tools to teams on desktop and mobile. It rocketed to a half-million users within a year of launching and has been valued at $1 billion. But it's not the only game in town.

Competitors such as Quip and HipChat provide other features and functionality that may fit your team's needs better -- such as the ability to switch to voice or video communication, as Cisco's Spark can do.

Finally, as you should do when you're doing Pilates, focus on your core. That means your core products and core values. We see too many tech-enabled companies weighing themselves down with huge development teams or a ton of software that has nothing to do with their core product offerings or services.

A giant company such as General Electric, which has taken to advertising job opportunities for developers, may have the overhead to cast itself as a tech company as it builds sensors on turbines and streets and makes other such innovations.

But that's not the case for startups or small businesses, which must be lean and nimble, relying on technology but not diluting the company's mission by focusing on it too much.

Related: Do You Know Your Ecommerce Business' Core Products?

The message here? Love technology, of course. Use it. Value it. Make it yours in the service of your products. Just don't elevate it beyond its station to a position of royalty within your company -- or you may find that the emperor has no clothes.

Erik Huberman

Entrepreneur Leadership Network Writer

Founder and CEO of Hawke Media

Erik Huberman is the founder and CEO of Hawke Media, a Los Angeles-area outsourced digital CMO agency for companies like Evite, Bally Total Fitness, Verizon Wireless, Eddie Bauer, Red Bull and many other brands. A serial entrepreneur and a brand and marketing consultant for eight years, Huberman previously founded, grew and sold Swag of the Month and grew’s sales to $1 million in four months. Huberman is available to be a keynote speaker.

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