Ask YC: What to do when someone beats you to the punch?

I posted almost the same question here about a week ago (see: http://news.ycombinator.com/item?id=301853). There may be some more insight in that thread for you.

From the responses I got I have decided to continue with my project, infact, I am going to be leaving my job in a few weeks to concentrate on it full time.

The world (and the internet) is a vast place, there is more than enough room for healthy competition in most fields. The way I ended up looking at it is that the worst case scenario would be that you don't sell many copies (if your competitors can sell it, so can you), but will have gained so much more experience in trying. Even if it doesnt make it big and just gets a small amount of sales, it is better than nothing. If it under performs and I have to go back to work, any sales that continue to come in will supplement my income.

If you enjoy the project you are doing and think you can improve on even just 1 part of your competitors solution its worth sticking with it. You can also watch your competitors and learn how they work, let them do the experimenting for you, see how they are spending their marketing budget etc.

I would say keep going. It's more important that you focus on delivering a better product. The customer doesn't care who was first. Personally I think the "impact of a launch" is a bit overrated.

Besides, who's to say that the same thing won't happen to you again if you abandon this and try another project?

it depends too much on the situation. if you can solve the problem better or cheaper, why wouldn't you at least give it a go? at the very least, if you could release SOMEthing, it could be a portfolio booster or fodder for acquisition.

having said that, i had a startup in your situation, but i decided to ditch it. i couldn't compete with the new competition on price or initial quality. just working on the startup required overhead costs that were racking up and was too long from market to really use it as portfolio fodder.

If you think your market is too small for two companies doing (roughly) the same thing, why go after that market at all? You will have competitors, if there is a market for something, at all. Your job is to move faster or better or both. If you can't do that, you won't win anyway...a competitor would spring up six months, or a year, later and eat your lunch.

Hell, the market we started with has had major contenders in it for nine years...and many more companies have come and gone in the space than currently exist.

Continue. But it might be helpful for your morale to get into the habit of referring to the other company as "friendster"..

Hit back harder?

Box.net and Dropbox weren't the first in a crowded market but they flourish nevertheless.

So keep going.

Learn from the mistakes they make and Capitalize.