I have put a lot of thought into this. I was going to apply to the next YC class, and have had much encouragement to do so from my friends at google, however, I just got accepted to law school, and plan on continuing my project from there, maximizing the free legal advice I get from peers / professors.
Basically, from what I have read / researched / been told by people who-know-what-they-are-talking-about, competition in this field is actually a good sign:
1. It means that someone else has decided your product/service is worthwhile enough to actually spend the time and energy to develop it. 'No competition' is very often a good indicator of 'Bad idea' or 'No market.'
2. The market -- the internet market, anyway -- is vast.
Facebook has 15M users, myspace 35M, linkedin 12.5, bebo 12.5... (plus or minus, who can even keep track anymore?). There is plenty of room for companies with competing services, especially if their products are marked by substantially different features and/or payment methods (or lack thereof).
3. Motivation: if I found out tomorrow that a YC company was doing exactly what I was doing, I would probably sleep less and try to get my product to market faster. Currently, there are a few competitors, but their services are either targed outside my demo or are, well, crappy. It is precisely the lack of the service that I am trying to provide that is my main motivation for working to bring it to market: I want to use it! Competition would validate that other people are thinking like me, and would also go a long way -- by using their product -- of understanding exactly what it is I am getting myself into.
Basically, from what I have read / researched / been told by people who-know-what-they-are-talking-about, competition in this field is actually a good sign:
1. It means that someone else has decided your product/service is worthwhile enough to actually spend the time and energy to develop it. 'No competition' is very often a good indicator of 'Bad idea' or 'No market.'
2. The market -- the internet market, anyway -- is vast. Facebook has 15M users, myspace 35M, linkedin 12.5, bebo 12.5... (plus or minus, who can even keep track anymore?). There is plenty of room for companies with competing services, especially if their products are marked by substantially different features and/or payment methods (or lack thereof).
3. Motivation: if I found out tomorrow that a YC company was doing exactly what I was doing, I would probably sleep less and try to get my product to market faster. Currently, there are a few competitors, but their services are either targed outside my demo or are, well, crappy. It is precisely the lack of the service that I am trying to provide that is my main motivation for working to bring it to market: I want to use it! Competition would validate that other people are thinking like me, and would also go a long way -- by using their product -- of understanding exactly what it is I am getting myself into.