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Wednesday, September 23, 2009

Dilbert

This is a classic case on self-interest. I have been involved in many
standard setting meetings and always the financial aspects of the argument
take centre stage.

Business history for technological firms is full of this. A world famous
example is the fight between VHS and Betamax video standards. In terms of
technology, Betamax is the clear winner. However, because the technology of
VHS is simpler, more manufactures decided to go with VHS because to retool
the manufacturing lines is much cheaper. In the end, it is because the sheer
numbers of the manufacturers that VHS won the battle.

The moral of the story is that discussions will not make it easier. Once the
battle line is drawn, the winner takes all and the loser dies. There is no
win-win situation.

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