A business that carries on making money, even while you sleep. No, it’s not impossible.
Technology businesses find a niche and exploit it. They’re versatile and they implement disruptive ideas to stay relevant.
That’s according to David Lati, a Tec graduate and commercial director at LDM, a logistics, supply chain, and digitalization consultancy.
In an interview for Tec Review, he says that when data is given a purpose, it becomes a useful product for businesses that can improve people’s quality of life.
We also spoke to Osvaldo Mercado, team lead developer at MavTek Inc, who says that what makes a technology business different from one that applies technology is that the former generates profit on its own 24/7, i.e. even while you’re sleeping.
According to Osvaldo Mercado, who has 10 years of experience in technology companies, technology businesses are those that are automated, i.e. ones that satisfy people’s needs without having to interact with them, because most of their processes are resolved through technology.
He explains that people often confuse technology businesses with having a website or an Instagram profile. However, these require human intervention. Mercado points out that this is online representation, but not a technology business.
“One example of how a technology business works is if you click on a post on social media, a website, or an app and you can book a night at a hotel and pay with your credit card or via PayPal without speaking to anyone. You didn’t need an intermediary for such a purchase,” he explains.
Technology companies aren’t the same as companies that use technology.
David Lati, with his experience in implementing Big Data and Business Intelligence, says that the best example of what makes a technology company different from one that uses technology is the automotive sector. Although it relies on technology and almost all of its processes are being digitally transformed, it is not a technology business in itself.
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Platforms such as Amazon and Mercado Libre are examples of companies that use technology to generate trade.
Lati explains that these are technology businesses because of their strength in this field since their business model has an emphasis on technology.
Another example of technology businesses is that of FinTech companies, which are using their value to generate value and create their own business model.
“FinTech companies are redefining and restructuring an entire industry: the non-traditional banking or finance industry,” he says.
He adds that technology businesses are a growing trend in Mexico, mainly due to the challenges of access to banking services and the modernization of financial products whose technological model is being improved.
When that Big Data is given a name or a purpose, a technology company improves its processes and operates more strategically in the market.
David Lati says that technology businesses start to grow when we make way for Big Data, since it can give greater certainty and can predict trends, statistics, and probabilities for decision making.
Lati, who holds a degree in Computer Systems from the Tec, even says that other interesting businesses can be generated through Big Data, such as evaluating consumer patterns, preventing natural disasters, or extracting information for disease prevention and personalized treatments, aspects that can’t be seen, but that are right in front of us.
“Actuarial models in surveys, through predictive algorithms and with Big Data can all be cross-referenced with other data sources to generate improved predictions via the analysis of predictive and prescriptive algorithms,” he explains.
Osvaldo Mercado from MavTek Inc believes that if a company isn’t currently using Big Data, it’s lagging behind in business, regardless of whether you have a technology business or not.
“For example, if sales of fried chicken increase at a certain time, and here we have the data to confirm it, you produce more at that time, on that day, or in the season they’re sold the most. Another example that surprised me is that of zoos in the United States. Some are already using Big Data to know when they should increase ice cream production,” he says.
David Lati from LDM says that the profitability of technology companies depends on the goals they have.
In other words, although there may be very large companies whose financial results aren’t necessarily good, that doesn’t mean they’re not profitable, since they have another strategy: that of disruption.
“We have financial examples of very large companies such as Uber, which has taken very big financial risks, but its business model is more forward-thinking and disruptive,” he says.
Another example of disruption is that of e-sports. As video game competitions are beginning to grow exponentially, so is betting on them, and this technology business has found a niche that’s getting higher cash flow than some traditional sports.
Lati believes that the level of profitability of technology businesses, startups, or up-and-coming technology companies depends on the use of Agile methodology, which tests what works and what doesn’t and what consumers like and what they don’t like.