4.1 Product Companies
The IT industry has a ton of various companies, and there are no clear boundaries. Big companies often do a whole bunch of stuff, some of which is definitely IT, and some is definitely not. A company is considered an IT company if it gets most of its revenue from IT products, or simply owns several major well-known IT products.
Fun Fact: in the US, IT is referred to not as Information Technology, but as High Tech — high technology. And IT companies are accordingly high-tech companies, or briefly tech companies.
In the IT field, thousands of companies appear, grow, and (let's be honest) die every year. The goal of the founders is to keep the company alive and grow it big enough so that its stocks can be traded on the stock exchange. Why is this important?
If a company goes public through an IPO, the founders can avoid selling stocks (and paying hefty taxes) by, for example, getting a loan with stocks as collateral, keeping the stocks. Or they could pay employees part of their salary in cash and another part in stocks.
Top management can be rewarded with stocks for excellent results. You can even buy out competitors with stocks — a very profitable way to absorb dangerous yet small competitors.
For employees, getting paid in stocks is also really advantageous. Firstly, it saves on taxes, and secondly, you can become very wealthy.
Fun Fact: when Facebook moved to its first office in San Francisco, Mark Zuckerberg offered a local street artist to paint their office. He could choose to get $20k for the job or stocks worth the same amount. Now those stocks are worth $200 million! P.S. The artist chose the stocks.
4.2 Modern Products
IT companies grow fast on investor funds. Investors just love it when companies grow quickly. “You can even not earn money — just grow” ©. “Get 100M users, and then we’ll figure out how to make money off them”.
As they say: “A person + technology will beat a person without technology,” and “A businessman + investments will beat a businessman without investments.” The main thing is growth. Very rapid growth.
4.3 Modern Development
Companies need to grow fast, products need to quickly gain users, and the team? The team needs to keep adding new features to the product.
50 years ago, when software development was just emerging, it was treated like construction. First came the phase of requirements evaluation, then design, then development, testing, and only after that was the product delivered to clients. From the start of development to the first client, it could take 5 years. Now, things are different.
Modern development is all about constant experiments. Big companies constantly test new features. New versions of products are released every month, every week, or even every day.
Fun Fact. A feature — new functionality, often a small one.
Facebook takes the cake, releasing dozens of new “features” every day. Each feature is shown to 1% of users, and then the user's reaction to it is automatically studied. If users like the feature, it's shown to 10% and so on.
Of course, this approach to adding new features requires a completely different approach to software development than it was before.
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