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Competition is a good thing. It proves there is a market for the product. If the competition is big, they are doing part of your marketing for you, letting people know they have a problem that needs solving. You can also use their product as a way to position your own product. There are some markets that are saturated and difficult to stand out, but it sounds this may not be the case.

The only thing that worries me in your post is "But I am concerned about trying to convince investors of this." I've chased funding before and its not a fun position to be in. Better to boot strap and have total control. In most cases you are going to need a product, active customers and some revenue to get a foot in the door for investors and even then, the odds are not in your favor.