Deep Tech, High Tech and Low Tech. So what startup is better?
We are constantly talking about the development of technologies, innovations and inventions that will change the world. However, should the startup be high-tech? What exactly is Deep Tech? And whether Low Tech projects can be successful as well?
Low Tech are simple development technologies that are easy to be recreated by the tech team. They are inexpensive and most frequently used for practical purposes. Low Tech accounts for a significant percentage of the GDP and workplaces throughout the world. Most of the daily used helpful programs are precisely low tech - from electronic notebooks to websites of cafes or shops. The main essence of Low Tech startups is that their emphasis is not on technologies, but they may be highly successful and profitable.
Here are some pros and cons of Low Tech startups:
- Since the creation of Low Tech startups is not time-consuming, they enter the market rapidly, mainly up to 1 year.
- There are more sales and marketing departments than technologists. This is obvious, because the main focus is not on the technology industry, but on other advantages of the product.
- Low Tech startups work in the existing market, which increases competition, but is apparently less resource-intensive than the creation of a new market.
- Receiving the first income faster, profitability.
- There is a high risk for the technology product to be copied.
- There is a possibility to be outshined by more profitable competitors.
is a new innovation technology with advanced functions and opportunities, which commonly focuses on separate problems for businesses and industries. The Hi-Tech industry is rethinking the main processes, business models and changing the public behaviour regarding existing services, products and, accordingly, lifestyle. Hi-Tech startups have a great inflow of direct investment and have made a crucial contribution to the economy. Hi-Tech startups take less time in order to enter the market in comparison with Deep tech, but more time compared to Low tech. They focus on capturing market shares, so this is a favourable venture capital investment.
Hi-tech startup pros and cons:
- Have a longer time of market entry in comparison with Low tech.
- Focus on technologies and therefore hire high-level technical experts.
- Require significant investments and, consequently, time for their return.
- There is less risk of new product development copying.
Deep tech is focused on solving the problems of humanity. Deep tech is revolutionary, but takes a long time to reach the market. It also requires large capital investment and only works if there are technical and business experts who can support the significant amount of required research and development process. Deep techs are difficult to be replicated and their patented technology is typically confidential. The main fields are usually artificial intelligence, aerospace industry, chemicals, and . Frequently, these kinds of technologies are so revolutionary that they cover several areas at once.
Deep Tech start up pros and cons:
- The main emphasis is on complex, revolutionary technologies.
- Have Technical director and a well-formed technical department with high quality specialists.
- They own patents and keep information about their inventions as secret as possible.
- A lot of time is spent on researches and testing in laboratories before the technology is ready to be introduced to the market.
- Require significant long-term investments.
- Frequently requires the creation of a new market for their own product.
- Absence or a very small number of competitors.
- It is difficult or even impossible to repeat the technology.
- There is a risk that it will not be possible to return the investment and commercialise the Deep tech startup, but in case of success, it predicts significant profits.
Sometimes you can hear one more term - Shallow Tech. It is not a widely accepted or commonly used term in the technical community, so we will explain it separately. However, some experts and commentators use this term to describe technologies that are not as advanced or revolutionary as Deep Tech or High Tech, but still more complex than traditional Low Tech solutions. Considering this, there are several potential advantages that Shallow Tech startups can offer compared to Low Tech startups:
Higher potential for scalability: Shallow Tech solutions are easier to expand than Low Tech solutions. This is because Shallow Tech can use more advanced technologies to automate development processes, optimise software operations, and reach a wider audience.
Greater differentiation from competitors: Shallow Tech solutions differ more from other technology companies on the market as they include more advanced or unique features in comparison with Low Tech solutions.
Ability to disrupt existing markets: Shallow Tech startups may have the potential to disrupt existing markets by offering new or improved tech solutions that are currently unavailable.
Ability to attract larger investments: Startups with Shallow technologies may have greater potential to attract higher levels of investment compared to startups with Low technologies. This is because investors may see greater prospects for growth and scalability in advanced technologies.
However, it should be noted that these promising advantages are not guaranteed and depend on the specific technology and market context. In addition, technology startups of any category may be successful or unsuccessful, and there are many factors beyond the level of technological complexity that determine success.
Why is it essential to determine whether a startup is Deep Tech, High Tech or Low Tech?
This is required in order to set priorities, determine advantages, place accents, and figure out the main highlight of the technical startup. Accordingly, a business plan is created on the basis of that, and the terms of entering the market are set. The risks and opportunities that can be calculated should not be forgotten as well. For instance, to what extent the idea is innovative and whether it requires a high level of protection. And most significantly - the creation of the development team. Depending on the kind of startup you choose in terms of technology, it will affect what kind of people you need to succeed - is it a team of engineers who are well-versed in the technologies that are needed in the market, or is it the team of researchers who are eager to solve a global problem.
So which type of startups is better?
It depends on available resources, needs, ideas and opportunities. Each of these types of startups can be both successful and unsuccessful. Each has both advantages and disadvantages. They differ in the level of technological complexity, accordingly, either the founder or the team must be of this level. The higher the level, the more difficult it is to find relevant experts. The human factor has always been and is a priority.