Someone has launched the same niche website idea as me. Do I abandon the idea?

Hi all, I'm a long time reader, but first time poster.

I have spent the last few months developing a website which fills a specific niche market. It isn't unique by any stretch of the imagination, and there are similar sites all through the US and Canada. It is an interesting concept as it focuses on your local community, so I invested a lot of time developing the idea and am at a point where my site is almost finished and ready to "launch".

Last night I discovered that someone has had an almost identical idea and has already launched; my competitor has already had television and radio coverage. Our services and revenue model are almost identical.

I guess I am at a loss as to where to go next, and would like the suggestions from the HN community. Do I

* Ignore the other site and launch... Full steam ahead!

* Wait a month or so and see how the small niche market responds to the competitor to see if it's worth while me launching (essentially having him be my guinea pig)

* Abandon the idea. The sites are similar and the market is small.

Any comments, suggestions, or ideas welcome.

I would ask yourself a few (perhaps obvious) questions:

1) Can you differentiate yourself easily? Better looking site, smoother UI, and better performance are potentially low-hanging fruit. Better customer service (if it applies) can also help set you apart.

2) Were you planning to add features, or just go with what you've got? Your Same Niche Idea can become niche plus X, Y, and Z, making it no longer Same Niche Idea. Harder than #1, but worth considering. Evaluate, and perhaps go through another iteration of features (or two.)

3) Final one: can you simply outmarket them? Perhaps they're just as good, but you have a larger marketing budget, have better SEO, a stronger professional network, whatever. They've had some coverage, but that's not the end, obviously.

HTH.

Ignore the other site and launch... Full steam ahead! You never know what may happen, and two companies are never exactly the same. Maybe you'll appeal to a different set of customers. I think it's too early to give up especially since you haven't launched.

Thanks for the feedback. I know that my product is better than my competitors; both from an aesthetic and functional point of view. This is the first "real" website I've started that I've run like a proper business.

My primary concern is that the idea up until now has cost me only a few hundred dollars for registrations as my business partner and I have done the coding and UI ourselves. Obviously the next step is the big jump into marketing which isn't going to be cheap.

I'm happy to spend the money on marketing (paper based primarily), however having someone else enter the market in the same space has made me a little nervous about how this could impact me.

We're actually based in Australia, so our market is much smaller than the US market.

LAUNCH IT! Because if you don't, you just don't know what might have happened. The same thing happened to me one week before I lauched my site. Had two days to get over it. I wish I can get those two days back! You spent all your time working on it and now let the world see it. There are always some people who will try out your product if you think you've built a good one!