Aside from the business itself – improving the product / service, cutting costs, or marketing to acquire more customers – there are other ways to gain an advantage for your startup.

For instance, maybe you can out-brand your competitor. If you're cooler, more memorable, seem more trustworthy, or give the impression of being more cutting edge or even more established, then customers will gravitate to you. I don't mean that success is automatic, but your efforts in other areas might pay off more quickly because the brand glides smoothly and sticks more reliably than the competition.

Part of this branding is visual – graphics and UX. Part of it is verbal – writeup and naming. Professionally, I only work on the verbal part.

Additionally, you might be able to gain a permanent advantage over the competition by identifying and securing the best domain name(s) for your sector. Can't say whether this applies to you or not. But, by way of example, it hasn't hurt Barnes & Noble to own Books.com, nor Bank of America with Loans.com. Conversely, owning Loan.com or Condos.com has helped smaller players gain a foothold. Premium domains can only be owned by 1 company in any industry; so they're an advantage competitors cannot replicate.

I don't want to push expensive domains on everybody. Really it depends on the individual case. But if I were a latecomer to some market niche, I might want to leapfrog the more established players. As a professional domain consultant and buyer's broker, I often help clients assess opportunities like these.