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Chapter 3. Managing Technological Evolution > Understanding Technical Standards

Understanding Technical Standards

Many new technology products and services must adhere to a technical standard, or an agreed-upon basis on which a product or service operates. A good example of a technical standard is the electrical outlet. All electronic devices have plugs that fit exactly the same technical standard. This ensures that all electronic devices fit into all outlets.

Technical standards are important to you, as a technology entrepreneur, for several reasons. Companies that produce products that become a technical standard are often incredibly successful. Why? Because all other companies have to design complementary products to fit the technical standard. As a result, the company that controls the standard can earn high margins on its product. Take the Windows operating system as an example. Because 80 percent of the world’s computers use the Windows operating system, Microsoft can earn high margins on that system.


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