In the case where the product is similar to the competitor I agree. It decreases the "market" risk, since you know the market's there, but it increases the "ex

In the case where the product is similar to the competitor I agree. It decreases the "market" risk, since you know the market's there, but it increases the "execution" risk, since you have to out-execute someone who's already in market with a proven solution. In more abstract cases, though ("AirBnB for dogs") it just helps the listener to understand the company and doesn't really speak to market size.