Except that facebook wasn't the first social network by a long way, and Google certainly wasn't the first search engine. The phone industry laughed at the iPhone precisely because it was competing with existing phone manufacturers.

There are plenty of ways to compete with existing products, especially if they haven't achieved market dominance. The key thing is can you offer anything they don't. Quality, cost, features, ease of use, etc. What part of the market does their product not address, preferably in a way it's hard for their product to be adapted for.