My direct competitor is growing fast, my start-up is still at an early stage. Do I need to cancel the initiative and try something new?

How is this "risky"?
The market has been demonstrated: there are buyers for this offering.
Execution is the name of the game, and it sounds like while your competitor has been executing, you've been waiting and seeing.
The fact that people are buying whatever this is should be impelling you onward! Yes, people are trading money for it! No need to prove the concept--just get in there and execute!

Figure out your competitive advantage. Maybe it's in the branding. Try to stay away from using price (live by price, die by price). Maybe it's in a better avatar.

You don't need 6000 clients to be successful. Figure out what you do need, and stop comparing yourself to others. You have a goldmine here: someone else has already done the heavy lifting of proving the concept, developing marketing you could copy, and figuring out what people will pay for the thing. Get moving.

The fact that your competitor is growing shows there is room for growth. Study your competitor and do what they're doing and improve where they're failing

The fact that you say "he can quickly imitate what I could differentiate myself" shows me you don't understand business. Product differentiation is but one way to differentiate yourself. The others include customer relationships and operational efficiency. I suggest you read "The Discipline of Market Leaders" to better understand differentiation. https://www.amazon.com/Discipline-Market-Leaders-Customers-Dominate/dp/0201407191

Does IBM have the best products? Does McKinsey have the best consultants? Well, they are pretty good, but not the absolute best. These two companies differentiate themselves by how they manage customer relationships.

Does McDonalds have the best hamburgers? Does Acer have the best PCs? No, they differentiate themselves through their operational efficiency which translates to low cost.

Do Apple and Lexus have the best products? Maybe, maybe not, but they have that perception in the marketplace. They choose to compete on product superiority.

I have clients with me-too products who are leaders in their space because they know how to manage relationships for the long term..

We often view competitors as a bad thing, when in actuality, they can be very valuable assets. They are a source of business intelligence and much can be learned from their successes and failures (at their cost). Markets can be better understood as well as how to market to them by studying how your competitors reach them. Competition keeps us sharp and lean and combats complacency.

Sometimes, we can even turn competitors into strategic partners...

Consider these points and please let me know if you have any questions.

Thanks,
Daryl

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.

You make no mention of the bare bones information that someone would need to know in order to assist you.

A competitor may have all these 1st mover advantages. The answer depends on if you have a differentiation advantage, more brand reputation strength, and how compelling your ad copy is to targeted personas.

How do you know he has 6000 clients? It also depends on how negligible switching costs may be to switch to your service or product as a substitution for what he has.

A situation analysis is imperative as a first action to determine if what he sells is what the market wants exactly. If not, a slight tweak to your offer, brand, product, and message may be the tiny subtle refinement that makes them choose you over him, or makes them replace him with you.

If you don't have budget for the situation analysis, you won't likely have too many skilled analysts ready to help.

I take it from your post that you are not in the USA, and therefore, would require a consultant to travel abroad to perform the field research in addition to the desk research, so whatever your budget for assistance must also take into consideration that the consultant will need to travel to you and not simply analyze you from the comfort of their armchair.

For a little no cost advice on what you can do in stealth mode for analysis and save a little seed capital see

How to Use a Competitor Dashboard to Destroy Your Competition https://www.cyfe.com/blog/competitor-dashboard/

You can compete against any competitor if you grind 120% every day, devote 25% of every day to studying to internet marketing. Those who master internet marketing, are dominating almost every verticle.