An ordinary business using technology well can be more interesting than an exciting technology still searching for a practical use.

In today’s technology boom, much of the attention goes towards artificial intelligence, automation, and the next big digital platform. Investors naturally want to identify who will build the winning technology. But we should also ask: which businesses will use it well?

Technology creates commercial value when it solves a genuine problem. It could help a customer save time, reduce mistakes, improve service or complete a purchase more conveniently. Without a useful application, technological potential does not necessarily translate into stronger earnings or cash flow.

 

Source: Image generated by Perplexity

 

Take a traditional distributor. Its business involves sourcing products, maintaining inventory, and supplying customers. There is nothing particularly glamorous about it. However, if digital tools help customers find the correct product, prepare quotations, and place orders easily, that same business can become more useful and harder to replace.

This is where seemingly boring businesses become interesting. They do not necessarily need to invent the next breakthrough. They need to apply technology sensibly to problems their customers already face.

Nassim Nicholas Taleb’s idea of antifragility adds another dimension. In Antifragile: Things That Gain from Disorder, he distinguishes between systems that merely withstand shocks and those that benefit from uncertainty and stress.

For investors, the question should therefore go beyond whether a business can survive difficult conditions. Can it come out stronger?

A financially disciplined company may be able to acquire a competitor during a downturn. A decentralised business may learn through small experiments without putting the entire organisation at risk. Useful technology may help it adapt while competitors struggle. These are possible routes towards antifragility — not evidence that every well-run business qualifies.

Equally, essential demand does not automatically make a company antifragile. Neither does spending heavily on software. A business needs room to adapt. It needs financial flexibility and protection against losses that could threaten its survival.

This is why I find the combination of traditional businesses and practical technology worth researching. The opportunity is not simply to own something fashionable. It is to identify businesses using technology to strengthen customer relationships and improve their economics.

The final test remains financial. Are customers staying longer? Are margins improving? Is the business generating cash? And does the share price leave enough room for things to go wrong?

The company research that follows examines these questions through a business that looks ordinary on the surface — but may have more going for it than first meets the eye…

 

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