[mortenjorck]

Yes and yes. The biggest part that's often overlooked in a product that does something new is how well it does it.

Don't worry about matching them feature for feature because they've got 20 people and you've got 2. Use your size and the fact that you don't have to pass ideas through a meeting to your advantage. Study their product. Find the weaknesses in their UI. Isolate the pain points. Make your product a breeze to use precisely where theirs is kludgy.

Ultimately, people will prefer the better experience to the more feature-rich one. If you can deliver the former, it doesn't matter how long they've been in the market.