If you are trying to build a new software or a web based application it is good if you have an idea that is totally unique. However, conceiving a unique idea is something extremely difficult. Of course, a unique idea is sometimes not necessary. You can build something that already exists in the market, but beat it in performance, usability and looks. After a while though, you will find yourself on the other side of the fence, with younger startups beating you in your own game. Ultimately the customers stand to benefit from this continuous competition, which is a good thing.
In reality though, things are not that gloomy from your perspective. While you may excel in certain features, your competition will probably excel in others and these otherwise similar products will cater to slightly different customers. However, it is necessary that you keep the competition up. Usually you will want to stay in most respects pretty close to your competition’s features, at least in terms of performance. A lag of 25% in terms of performance seems justified if you make up for this in other features. However, anything beyond this is not good in the long run. While it might take a while for your customers to figure out that you are lagging behind, they will surely figure this out someday and then getting these customers back, even if you outperform the competition in every respect, might be an extremely difficult task.
