That said, being an entrepreneur brings with it a certain disadvantage in that you can become overly fond of an idea, so much so in fact that you will ignore all signs you shouldn't be working on it.

Everything in moderation!

So true! Thank you for your response.

Are there data to back this up?

Anyway, competition is a fact of life for pretty much every company. If you don't have it today, and your idea is good, you'll have it tomorrow, or next week, or whatever. More than likely, if your idea is really good, you have half a dozen competitors working away in their garages (or wherever) right now, that you've never even heard of.

My take? Keep moving forward. Keep a close eye on what your competitors do, and not just in terms of product features and technical stuff. Read Positioning - The Battle For Your Mind by Al Ries & Jack Trout, and All Marketers are Liars by Seth Godin, and think about what "lie" your competition are telling, (or what position they're trying to grab) and figure out if you can A. grab that position / lie before them, or B. establish a related but slightly different position, where you can still be the leader and still make a nice profit.

Trout and Ries talk a lot about "Cherchez le Creneau", a French expression that means "search for the hole". It's a great expression in marketing, in terms of "search for the hole in the market" and fill it.

Like you say... if LayerVault is more feature rich and pricier, then maybe you can grab a different chunk of the market. Do be wary of getting caught up competing on price though. That can lead to a "race to the bottom" scenario. See Thull's book Mastering The Complex Sale for a good discussion of that issue. If you go "down market" try to make it more than just "we're cheaper"... more like "Our product is simpler and easier to use" and if it also happens to be a bit cheaper, then so much the better. Better yet, make a simpler and easier to use product and then charge more than the competition! If you can convince people of the value you can provide, they'll pay for it. Again, see Thull for a lot on how to develop and communicate value.

FWIW, we find new competitors all the time... heck, one popped up in our backyard (almost literally) earlier this week, that we had somehow overlooked until a friend of mine interviewed with them. Yikes. But still, we keep moving forward.

I'm reminded too of what Bob Parsons (of GoDaddy fame) said once... paraphrasing slightly, it was basically "Don't be afraid to enter a crowded market. Just be better than everybody else".

Edit: Oh yeah, one last thing... call this a nitpick if you will, but I'm not really a fan of the name "Sception". "Why not?" you might ask. Well, because it sounds like a made up word, and it reminds me of famous "made up word" names like Inprise which sounded hideous and failed miserably. And it doesn't really fit the pattern of "short, easy to pronounce and easy to spell". Is it pronounced such that the first syllable is the same as the first syllable of "skeptic", or does it sound kinda like "inception"? And if somebody is telling somebody about it over the phone, or you run a radio ad, will it be obvious to somebody hearing the word, how it's spelled? Is it "skeption" or "sception" or something else?

More to the point, it isn't really evocative of anything meaningful (not to me anyway). A point that Trout & Ries emphasize in Positioning is how your names (company and product) should fit with your desired positioning and support the overall theme. Does "Sception" support a useful position ("lie" in Godin terms) that you want to establish?

Yeah, I honestly am still unsure of the name. I was going for something that had to do with "views" or "viewpoints". Thank you for your feedback on it.

I hear you loud and clear on the pricing issue.

Hell, I hear you loud and clear on all of it. This is very informative. Thanks again!

Looking back at it, thinking that I had come up with a tool that hadn’t really been built yet, in this day and age is kind of crazy, I guess?!

It helps to realize it's not being the only person working on an idea that makes the idea promising. Any idea that's promising will have several teams working in. So if what was deterring you is competition, don't let it deter you. And if there was no competition you should be alarmed.

what If I am supposed to put time, energy, and money into the other ideas?

Constrain yourself to not working on any specific idea until at least two weeks have passed. Not only is it OK for new ideas to surface in the meantime, but it's also something that you want. You don't want to stay stuck working for 6 months on a less valuable idea. And it's not a contradiction to have other ideas, but a healthy path forward. Plus, if you are not having enough stupid-sounding ideas you are probably being too conservative.

If I were to give you only one piece of advice, it would be: describe the whole idea in a short sentence, preferably under 5 words. If you can't do that, you don't know well what your idea is. And that's a much bigger source of concern than competition.