Is WeWork Really a Tech Company? The Answer Matters—Data Sheet

It has become a hackneyed assertion that every company is a technology company these days. (I grudgingly may have written it once or twice myself.) It also isn’t true.

Leave it to the estimable and long-winded Ben Thompson, who this time justifies his word count, to explain why. In a post exploring the question of the day—are WeWork, Peloton, and the like tech companies?—Thompson brilliantly explicates the nuances of the answer. Tech companies, he writes, use software to create ecosystems, have low marginal costs, improve over time, profit from their innovation for eons, and incur low transaction costs. By his measure WeWork absolutely is not a technology company, while Airbnb, Netflix, Uber, and Peloton mostly are.

If tech-industry history interests you, I encourage you to read Thompson’s erudite essay. He explains the progression from IBM to Microsoft to Salesforce to Atlassian to where we are today in a way that goes far deeper than the traditional mainframe-to-client-server-to-Internet-to-app-economy analysis.

What Thompson doesn’t do is finish his argument to explain what it means to valuations. That debate is playing out in real time. As investors recognize that WeWork actually is a real estate company, its perceived valuation is shrinking. Investors reward tech companies for two reasons: They tend to grow quickly and, when they work, gush profits. Or, as a banker friend told me, investors will pay up for “leverageable growth.” Mere “linear growth” doesn’t matter.

This is all reminiscent of the dot-com days, when companies literally slapped a “dot-com” on their name and asked for—and often received—higher valuations. Says my banker pal: “The similarities to Pets.com are overwhelming.”

The lesson is clear, whether the topic is valuation or strategy. Sprinkling some A.I. pixie dust or, more seriously, even intelligently deploying the latest innovations do not make every company a technology company. If you need convincing, keep watching WeWork’s public flogging for its crimes of hubris and excessive cheerfulness.

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I never knew Condé Nast was an actual person. This book review explains who he was and how he innovated a thrilling industry of his time, magazines, which have become a very tough business.

Adam Lashinsky

On Twitter: @adamlashinsky

Email: adam_lashinsky@fortune.com

NEWSWORTHY

Can we always be this close? Forget about rumors for next week's iPhone event from Apple, what about the 2020 iPhones? Apple is working on bringing back fingerprint scanning with an under-glass identification feature, Bloomberg reports. And there's possibly going to be a replacement for Apple's formerly cheapest phone, the iPhone SE, which wasn't upgraded after its 2016 introduction and was discontinued a year ago. Back in the real world, Apple debuted a portal for Apple Music on the web–no mobile app required.

There's a dazzling haze. Also in the real world, Facebook brought its dating service, heretofore offered in other countries, back to the USA. Creatively named "Dating," the new app tries to stay less creepy by allowing only text messaging, no sending photos or videos, to your would-be romantic pals. Separately, that state attorneys general antitrust investigation of Google that's coming is also going to cover Facebook, according to The Wall Street Journal.

This is our place, we make the rules. Cable company Altice USA is entering the wireless market with a bang. The company's new unlimited mobile plan will cost just $20 per month for cable customers, $30 for everyone else. Altice doesn't actually own its own wireless network but leases airwaves from AT&T and Sprint. Also big caveat: it's only available to people living in Altice's 21-state cable service areas, mainly New York, Connecticut, and New Jersey and including parts of West Virginia, North Carolina, Missouri, Arkansas, Louisiana, Oklahoma, Texas, Arizona, and Idaho.

Take me out and take me home. I have been waiting for this one forever, as you well know. Google says the next bit of the world's information that it plans to organize for us is the mess of TV shows and movies split across so many different streaming services. The new feature coming to Google's mobile search will show you where a program is actually available (like on Netflix, Hulu, or wherever) and make suggestions to watch shows you might like.

Ladies and gentlemen, will you please stand. A New York cryptocurrency company called Paxos has been selling a so-called stablecoin digital token backed by actual, you know, U.S. dollars. Now it's expanding with a token called PAX Gold to be backed by one troy ounce of gold held in a London vault. In other fintech news, still-private payments startup Stripe says it's branching out into small business lending.

Swear to be overdramatic and true. Most Americans favor law enforcement using facial recognition technology, but not corporations, according to a new survey. Law enforcers won the trust of 56% of respondents in a Pew Research Center poll released on Thursday. And 59% said it was acceptable for police to use the technology to assess security threats in public. But only 36% said they trust tech companies to use it responsibly while a minuscule 17% said they trust advertisers.

Can I go where you go? Our new newsletter focused on the business of sustainability, The Loop, came to life this week. Sign up for future issues to stay on top of all of the relevant news in that area.

(You don't need this headline reference explainer video, do you?)

FOR YOUR WEEKEND READING PLEASURE

A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:

The Silicon Valley Heavyweights Who Want to Settle the Moon
(Bloomberg Businessweek)
There’s a new entrant in this new space race, a nonprofit organization called the Open Lunar Foundation. Based in San Francisco, it’s a group made up of tech executives and engineers—many of them with former ties to NASA—who have serious ambitions to create a lunar settlement.

Please, My Digital Archive. It’s Very Sick. (Lapham's Quarterly)
Our past on the internet is disappearing before we can make it history.

Are We All Wrong About Black Holes? (Quanta)
Playing the role of the Socratic gadfly in the foundations of physics is sometimes important. In this case, looking back invites a bit of skepticism that may be useful going forward.

The worst sales promotion in history (The Hustle)
Twenty seven years ago, Hoover offered two free international flights with any £100 purchase. Today, it’s remembered as the worst sales promotion in history.

FOOD FOR THOUGHT

The credit for finding that giant security hole–actually multiple holes–in the iPhone's operating system software recently goes to Google's Project Zero, the long-running effort to make all of tech more secure. The project is overseen by Parisa Tabriz, a Google director of engineering, who also has a slightly larger other role: heading the Chrome web browser project. Tabriz shared an entertaining and enlightening day-in-the-life style diary, actually a whole week in her life, with The New York Times. It's a great read. And, turns out, she's platform agnostic:

Wednesday
7:30 a.m. Grab my iPhone and Windows laptop for the day. Neither is my primary device, but I like to use them on Wednesdays. Thursdays, I try to mostly use my Mac, and the rest of the week I’m on my Chromebook or my Pixel Android phone. I’m responsible for Chrome across every operating system, so I try to use all the different Chromes each week to catch the subtle and important differences, and give feedback or file bugs if something isn’t working right.

IN CASE YOU MISSED IT

WeWork Is Only Making its Image Problems Worse by Trying to Control the Narrative, Say Critics By Erik Sherman

How Consumers Are Pushing the Global Fashion Industry Toward Greater Sustainability By Fortune Editors

8chan Tells Congress It’s ‘Voluntarily’ Offline. What’s Next for the Message Board Favored by Mass Shooters By Alyssa Newcomb

Alarmed By Deepfake Videos, Facebook Creates Contest to Detect Them By Jeremy Kahn

How the Energy Industry Is Using Data to Decarbonize Itself By Fortune Editors

Which NFL Stadiums Will Get 5G Connections Next By Aaron Pressman

Box CEO Aaron Levie Weighs In On Starboard Value’s Shakeup Effort By Jonathan Vanian

BEFORE YOU GO

You didn't think billionaire/Bond super-villain/Tesla CEO Elon Musk was going to let this whole Porsche electric car thing pass without at least a tweet, did you? Porsche kind of made Musk's task easier with the bizarre naming scheme for the new top-of-the-line Taycan Turbo S. "Um @Porsche, this word Turbo does not mean what you think it does," he wrote. Touché.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.