Indeed. It replaces one challenge with another. When you're the first to market, your primary challenge is to prove your business model and product market fit. When you're later to market, your challenge is to build a better product and execute a strategy better than your competitors.
Different teams excel at different challenges.
Personally I'd prefer a market with competitors. That means the market exists.
The difference was that WhatsApp was about execution with a small team. The Atlanta way would have been to hire 2 engineers and then a army of marketing people to sell it.
It's a shame because there is a lot of potential, but the leaders concentrate on the marketing of the community instead of actually developing a better community. Lots of cargo culting with incubators etc., but not a lot of large wins. There are pockets of awesome in the town, but Atlanta is more about who you know and your image, not the substance that has made runaway successful tech startups.
There will always be an element of who you know in any community, but Atlanta goes a bit further than the norm to the point of ignoring/devaluing the pieces that are at the soul of successful tech startups.....namely the tech.
Whatsapp was not a "instant messaging" app in the way you put it. It was started specifically to get around high SMS carrier rates in countries around the world, hence their ultra-fast adoption in ROW.
Not trying to nitpick, just pointing out that Whatsapp didn't start in a crowded market. They actually did something unique that made messaging their friends & family way cheaper and easier.
Different teams excel at different challenges.
Personally I'd prefer a market with competitors. That means the market exists.