When to Copy Ideas, When to Steal Ideas
There's even more to this.   davnicwil says just use the same sponge cake and excel in your area of expertise: the icing.  Good advice.Alternatively, if you are a "fast follower": after the other company has evangelized the new feature (sponge cake) and started to build an audience for it, you can see what features seem to really matter and either make a simplified one or one that addresses the limitations of it.A great example is the iPod, the famously lame latecomer ("no wifi, less space than a nomad.  Lame").  Apple launched into a market which was already developing (tiny MP3 players), and not only put their own "icing" on it (e.g. design) but addressed a couple of the fundamental problems with the existing ones (the complexity of getting music into them and navigating to find what you want).  So they weren't even really competing with the other players.