Other startup got there before me. Stop or continue?

It may be a lost cause, or not. See if they mess up. Regardless, forget features-at-large and focus on the best features, which are:

1. It works. 2. It's easy to use.

You can always one-up in those categories.

Keep going.

Although, if your disposition is such that you get discouraged from a press release, you should stop and assess if you really have the personality and disposition for such a marketplace. Rarely ever do you see a successful marketplace with only enough room for a single product/solution.

There is no free lunch, and an "overnight success" takes an average of 3 years to build. Along way will be many roadblocks, distractions and false alarms.

Good luck.

Few months isn't that hard to sacrifice, remember sunk-costs and don't get burnt out.

Edit: the bright side is that you know iPhone inside-out and seeing an opportunity can start on something else pretty fast

Are you working on it full time? If it's just a side project while you work a day job, it doesn't hurt to soldier on a release you app anyway. If you can implement the same features without the overhead of a 20 person team, you could probably undercut their price.

Can you launch before they do? It doesn't matter if they have more people or better funding if you can.

Or, do you think you can execute the idea better than they can? There are plenty of apps on the the app store released by big companies that are garbage...if you can do it better, you'll take away some of their unsatisfied customers.

If you can't do either of those, then I'd either try to find another angle to beat them on, or recognize that I was going to be wasting time if I kept pouring time and money into the project and move on to my next idea.

Its not the idea of the product that counts, its what your vision is for how you want to solve the problem in your own unique way. If you're tapping into a real market, there will be tons of products that promise to solve the problem; you have to believe that your way is the best way to solve the problem.

If you don't believe the above, then don't bother. Go get a normal 9-5 job.

I say keep going. For sure your app is different enough that there are people who'll prefer your app.

I am in a similar situation. I thought of an idea about a year ago, 4 months ago someone else implemented it. Still going to finish and release...

I wrote a blog post about this a few weeks ago: http://blog.opportunitycloud.com/2009/12/21/stealth-disease-...

Summary: "The cure for the First Mover Paranoia is to not view competitors as impassable roadblocks but as a verification that the idea actually works and has a market. That is in fact great news! Now the challenge becomes to find holes in the existing market (geographic, pricing, quality etc.) or to improve on what the competitor is doing."

Keep pushing - the first mover has an advantage that depends on their own abilities. I mean, Friendster still dominates, right?

If there is no competition, there is no market. So go for it.

Keep pushing on. You should be encouraged that the idea has competition, I think that gives it merit.

Also - their large team and funding could actually limit them. You will have a lot more freedom to build what you want.

Even if you never get a single user (doubtful), following an idea through to completion is valuable experience. And as noted in other comments, you gain cred.

Push on! ...Keep an eye on the other startup and modify your app. Differentiate your app to leverage their weaknesses and your strengths!

It is easy to say "just go for it". In reality, it is quite risky.

Theoretically, it is possible to unseat a competitor like Google in search, or Facebook in social networking, but you really have to know what you are doing.

In your case, a better approach is to do some customer development first. Speak to potential users of your product. Find out if they are dissatisfied with your competitor's offering. What will it take to switch.

After that exercise, you should be in a better position to make an informed decision.

I would say keep going. But take a close look at their app. Surely there are differences between yours and theirs, or at least in the ideas you have for yours. Competition can be good and this should not be viewed as a roadblock to developing your app. As Erik points out in his comment, you should look for the differences and how you can fill voids in the market for this app. Does your app appeal to a different demographic, market, is the pricing better, is the overall quality better, etc...? Capitalize on your competition's weaknesses. You obviously have long term plans for your app, whereas your competition may have just thrown it together and have no plans to upgrade or just minimal plans to upgrade. They may be just testing the market with this particular app. Capitalize on their market research and build a better product. Set up Google Alerts for the app name to keep track of what is going on with their product, but DO NOT let yourself get distracted by any chatter at the same time. Use that chatter though to build the better app.

Keep working on it. If they launch before you, read the comments in the store and see how it's doing, what are its shortcomings, etc. I think this type of thing easily happens all the time. Rarely is there an idea that someone else hasn't thought of.

Difficult to say. If you feel confident that you can do better job and compete with them, keep going. Otherwise don't waste your talent and move on. On the other side, someone already said it - they may mess up.

Nobody should work for months on an iPhone app. The platform is not friendly to that style of app. Work for weeks, launch and test.

It depends on how close you are to completion. How much of your codebase can be repurposed to a less populated niche?

Do you have a good way to differentiate yourself? You say "all the features I was working on". Do you have a vision for something neat that they haven't done? That would be the factor I'd worry about.

If not -- if they've really done everything you intended to do -- I'd drop it, and take up a different project. If they're not scratching your itch, or not doing it quite right, then there's room in the market, because somebody else probably also has that itch.

To put it another way, would you rather use the product you've been working on (when finished) or the one they just released? If you'd rather use theirs than yours, then they got it right and you're doomed. Quit. If yours would be noticeably better, there's room. Continue.

I would say it depends on the type of tech and solution you're dealing with.. If it's an interactive children's book for example then the tech or resources required are minimal and it's more about your unique spin on the product than what's behind it.

If you're talking about creating the next iTunes, something that requires tremendous resources, or bleeding edge tech like Google Wave then you're probably right - you just won't have the resources to compete. Those are the kinds of products that a well funded company will always have a clear and definite advantage in producing.

Somewhere in between the two extremes is a large grey area where with a little bit of luck and determination anything is possible..

I would stay the course unless the financial burden is too great.. It's often the case that when you keep working towards a project goal you find new and interesting ways to tweak your product offering so that it becomes something entirely different and unique in the marketplace..

As long as you think there will be real demand for your product then there is always a chance to spin the marketing in such a way that makes your solution stand out from the rest. Feedback is critical as well.. So don't be shy about asking friends and family.

Your first concern should always be product/market fit not potential competitors.

If the pie is big enough, then you'll have your share. It's unreasonable to expect you to own 100% of your market. So if the market is big, there can be many players. Even the idea/product is same, you can still have your own presence.

Having competition just makes you work even smarter and harder than before. So go for it.

As a matter of fact, I'm in the same boat as yours, and I'm not giving up!

What is the functionality of your app? Get the MAIN functionality finished and release, don't worry about the "other functionality" right now. Release in small iterations, in amounts that a single person can handle. Follow this process and continually release features and improvements based on user suggestions.

It's ultimately up to how you feel with taking a risk, no one can tell you what to do. If you believe in the product, other people believe in it and you feel comfortable then go for it.

More resources on MVP:

http://www.startuplessonslearned.com/search/label/minimum%20... http://venturehacks.com/articles/minimum-viable-product-exam...

Thank you for the great comments everyone. I spent a few minutes playing with their app. It's already on the app store and it's free (so much for undercutting). While they've created a great app, I have a few ideas that may give my version a good shot. I'm going to sit down and have a think, put some more ideas together. Thanks again for the great input.