[_delirium]

Somewhat bucking the trend, I'd say it's a reason to at least consider what effects the existing competition has. May not be a reason to abandon it, but if, for example, you were considering offering freemium webmail, it'd be worth considering to what extent existing offerings like Gmail and Hotmail affect the landscape. Do they put so much downward pressure on prices that you can't realistically hope to charge enough to be profitable? Is there scope for offering better enough services, to at least some non-zero-sized niche of potential customers, to overcome that? Etc. I think you definitely can't assume they don't exist: if you just make a Gmail, even a somewhat better Gmail, you will have a lot of trouble competing with Google on Google's terms, and against their cash pile.