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Is Competition a Catalyst for Innovation? The products of rival firms can prompt and motivate a company to differentiate its offerings and invent new solutions.

By Jason Johnson Edited by Dan Bova

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

For hundreds of years of human history, innovation and discovery have occurred simultaneously, by different parties, all over the globe. In fact, it is difficult to find a major technological breakthrough of the last 200 years that didn't have multiple inventors, perhaps working thousands of miles apart, claiming that a particular discovery was theirs.

The lightbulb, most often attributed to Thomas Edison, had 20 individuals claiming responsibility for its technology. The development of the telephone can be attributed to the work of 10 great minds over 50 years, even though it is commonly credited to Alexander Graham Bell. In the 20th century, one of the most fascinating discoveries in physics, the theory of quantum electrodynamics, was developed by Richard Feynman, Sin-Itiro Tomonaga and Julian Schwinger, all independently of one another and across continents. While all three won the Nobel Prize for the discovery, a silent competitiveness ensued between Feynman and Schwinger as they seemed to race to publish their findings.

But to me, these are examples of an innovation Zeitgeist or spirit of the time that in many ways has been fueled by competition.

Related: Radicals & Visionaries: Invention vs. Innovation

The early stages. In most instances a technological innovation, when first discovered, is not ready for the consumer. Often t innovator doesn't fully understand the implications of what he or she has discovered. That's because at the moment of discovery the technology exists in a form that's may be very different from what a person needs. For the widespread commercial success of any innovation, two crucial discovery moments should be recognized: the discovery of the technology and the consumer's discovery of products containing this technology.

At the core of the product-discovery moment for a consumer is awareness. Usually in order for this awareness to arise, the product has to be mentioned in a conversation between consumers. More often than not this dialogue takes place during a debate or as a comparison is made between two competing products. For the modern consumer, who is often inundated by product-marketing impressions and an abundance of choice, a product that can't be incorporated in a side-by-side comparison with a competing product may be invisible. That's because competition increases category awareness, which in turn drives demand for a product category.

With low barriers to entry, and more and more affordable development resources, competition is a key component of the technology Zeitgeist we're in today. Competing products help fuel and articulate the value proposition of each device and force companies to innovate through differentiation.

Related: What Really Fosters Innovation (Infographic)

The adoption factor. Within the tech community, people often talk about "adoption" without pausing to take in what the word really means. We simply speak of early and late adopters as elements on Everett Rogers' innovation-adoption curve. What gets missed is that adoption is about recognizing that something has a place in one's life. Competition can then be seen as a positive force that shapes technology into form factors and feature sets that better and better meet the needs of people.

Today we are seeing innovation folded into products that become a part of our daily lives at a much faster rate than in previous generations. We are witnessing this now with the Internet of Things, as an increasing number of connected devices become available to the ordinary consumer and people adopt these devices as permanent fixtures in their homes.

One of the most exciting things for me as an entrepreneur is helping bring innovation to people. Watching people develop close interactions with innovative products is extremely satisfying. This is because, when it is done right, interaction with a product can be seen as a form of human expression. When a product is fully adopted, it plays a vital role in fleshing out who the customer is as a person. And competition brings products closer to truly fulfilling the needs of people.

At the end of the day, the often unspoken truth is that companies like Apple need Google, Box needs Dropbox just as Thomas Edison needed Joseph Swan and Alexander Graham Bell needed Elisha Gray. Competition is fundamentally necessary to educate consumers and force companies to be innovative with their product offerings and business model. Microsoft finds itself in its current position because of having been too many years without strong competition and pressure to stay nimble with its business model. So, as an entrepreneur, when asked how I feel about my competitors, my answer is very simple: I need them.

Related: How Strong Networks Create Strong Companies

Jason Johnson is the CEO and co-founder of August, the home automation company behind the August Smart Lock, based in San Francisco. Jason is also a managing partner of startup incubator Founders Den and the chairman of the Internet of Things Consortium. Prior to August, he co-founded mobile security software company AirCover (acquired by M Dream, HK:8100) and ebook software startup BookShout!. He also previously served as vice president of Dolby Laboratories, vice president of Global IP Solutions (acquired by Google) and was the co-founder and CEO of InterQuest (acquired by Darwin Networks).

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