I am in the same situation, but I honestly believe that my startup is more scalable than the current YC company, and offers a greater service to the consumer.

I am in the same situation, but I honestly believe that my startup is more scalable than the current YC company, and offers a greater service to the consumer. I solves an issue that has not yet been properly addressed in the industry. And therefore I have chosen to go ahead and apply for the Winter 2010 class. In the June 2009 issue of Inc Magazine, YC founder Paul Graham was interviewed, and they stated that they have had YC startups merge. Therefore, you could possibly benefit your idea in that way as well. My suggestion is that you apply, and get your name out there. You never know what positivity may come from it.