The exact same thing happened to me a little over a month ago. A few days before the launch of http://limelightapp.com/ , we saw http://app.net/ show up on the front page of HN. Initially, my heart sunk. (You've already felt this, I'm sure.) Thankfully I was sitting next to my wife on the couch, who had the good sense to say: "Go grab a beer." I took her advice.
In the end, I can honestly say that having http://app.net/ launch before us was a blessing in many ways. Many of the ways have already been explained by others (e.g. validation of the idea, etc.) It also seriously motivated us to stop putting it off for another weekend. I buckled down that weekend and got the service as ready to launch as I could. I knew that if we waited too long it would seem like we were just copying their idea, when in fact we had been working on it for a couple months in our nights and weekends already.
We also had the benefit of seeing what features were being requested from people on HN. In many cases, these were features that we built into our initial release. In other cases, I knew that I could knock the feature out in a couple of hours. This allowed us to tune the marketing message that would accompany our release. Our service does many things, but knowing which ones people really wanted was invaluable.
In the end our launch went a lot better than expected. Few people made the connection between our service and the competitor that launched a few days earlier, and when they did we received a favorable comparison. More importantly, that "idea validation" that their launch provided translated into real subscribers as soon as we launched. We've actually exceeded our expectations in terms of paid subscribers up until this point and we haven't even started really marketing the service.
Went and checked out LimeLight, really nice, I think you are addressing a market need that very much exists, so keep at it.
One little suggestion, you should have some example sites right from the homepage. The video is good (thought edit out the publish bug!), but first and foremost I wanted both validation that others are using it, and wanted to be able to see it in action.
Last thought, embrace the fact that this happened to you. This is a story I've been able to tell again and again since it happened and it's interesting. It makes the story of your launch interesting. We just read yesterday in an article that made the front page of HN at http://news.ycombinator.com/item?id=2928611 that having an interesting story will really help you get picked up in the media. People love this stuff.
Your landing page is a lot better. I had opened both sites in tabs and forgot about it. Then randomly bumped into the app.net tab, was wondering what it was and remembered "Ah, HN". So I switched to the next tab and there it was: "Create an App Showcase Site in Seconds".
Exactly. It's also helpful when you can reference an established player in your space and talk about why your product might be better for them, rather than attempt to both explain WHY they need your product and then WHAT your product does.
Funny, I was about to do the same thing as you at the beginning of the year. I saw unbounce getting in the space and decided to jump ship and do Cilantro instead.
In the end, I can honestly say that having http://app.net/ launch before us was a blessing in many ways. Many of the ways have already been explained by others (e.g. validation of the idea, etc.) It also seriously motivated us to stop putting it off for another weekend. I buckled down that weekend and got the service as ready to launch as I could. I knew that if we waited too long it would seem like we were just copying their idea, when in fact we had been working on it for a couple months in our nights and weekends already.
We also had the benefit of seeing what features were being requested from people on HN. In many cases, these were features that we built into our initial release. In other cases, I knew that I could knock the feature out in a couple of hours. This allowed us to tune the marketing message that would accompany our release. Our service does many things, but knowing which ones people really wanted was invaluable.
In the end our launch went a lot better than expected. Few people made the connection between our service and the competitor that launched a few days earlier, and when they did we received a favorable comparison. More importantly, that "idea validation" that their launch provided translated into real subscribers as soon as we launched. We've actually exceeded our expectations in terms of paid subscribers up until this point and we haven't even started really marketing the service.