I started working on a location based game for smartphones this past august (www.tuzo.ca). At the time, competitors included Foursquare, Gowalla, and some smaller players but i felt like I could handle taking them on and was excited about making a killer product to execute better than they did.
Since that time, Facebook Places, Google Latitude, SCVNGR and many others have either entered this space or grown exponentially. All players seem to have the same model of focusing on location based marketing as their revenue model.
I released my product in Toronto as a market test in January, but have since felt deflated in competing with such large competitors, plus i have yet to acquire funding.
A general question people ask me (including angels/VCs) is how i'll be different from all the other players, and i want to focus not just on the social act of checking in, but more on competing against others around you, creating a social-gaming environment in the real world.
I've already read the other questions regarding competition and the "800lb gorilla", but i'd love to hear some advice on whether i should continue in such a challenging space?
Any advice would be great!