Imagine this - You launch first. This competitor of yours launches the next day. If they still kick your ass by having a better product or marketing, then it doesn't matter if you launched first.
If the thought of a competitor entering the market makes you want to run, then you need to toughen up.
It's better to focus on your users anyway. The only way to think about competitors is to learn how to serve your users better. Competitors exist to do free market research for you.
Sorry to invoke a cliche, but at the stage you are, execution is all that matters.