Web apps are easy for users to try out for a while. So build a couple of differentiating features and see if a subset of the (apparently lucrative!) market tries your site and sticks with it.
The Dashboard widget for recording your time was one -- Harvest's is nice, especially because you can easily switch from client project to client project with the UI. But the thing which ultimately switched me over was the ability to fully customize the line items on invoices -- I was able to get the style I wanted with a few clicks, and I can easily edit and merge line items if I want to. For me, it hits the sweet spot between doing things automatically and allowing you to edit things.
Of course, once I switched over to Harvest I gradually became subliminally aware of other reasons to like it. I haven't found myself wanting to try out anything else.
So maybe something intangible. Is that a cop-out answer?
But even though they all do the same thing, its the way that they've implemented the functions that makes each app different, and has ultimately influenced my decision.
At this point, I have no idea what one came along first, that doesn't matter to my decision, and I didn't just pick the first one I found, I reviewed 5-6 before making a choice.
Another point is, that after your initial release hopefully you'll get a user base who will provide you with feedback and ideas, its up to you how you act on that feedback. You may react to your users differently than your competitors, and ultimately that too will distinguish you from them further.
Good luck!