You should compete against what someone else could be doing, not just what you can see people doing. A corollary is that you shouldn't relax just because you have no visible competitors yet.
No matter what your idea, there's someone else out there working on the same thing.
If your product is only half as good as your competitor's, you don't get half as many customers. You get no customers, and you go out of business.
@paulg
Would you rather make $100,000 a year with a spouse who loves you, children who admire you, good friends, good health, and a clear conscience, or make $1,000,000 and have none of those things?