Assessing the True Nature of a Business

Investors should avoid confusing the true nature of a business, such as mistaking a tech-enabled business for a technology company or misclassifying a traditional business with a software layer as a tech-enabled business. It is crucial to listen to experienced investors in specific sectors and assess whether the business truly belongs to that industry. For instance, a real estate business with a minimal software layer should be evaluated as a real estate business, not a tech company. Similarly, a traditional restaurant utilizing technology for efficiency is still fundamentally a restaurant, not a tech-enabled business. Clear assessment of the true nature of a business is essential for making informed investment decisions.