Product already exists - How do you deal with it?

It really depends on the context I suppose, but sometimes there is a niche group of users who aren't well served by existing products, or the products have subpar support, are overly complicated/bloated, etc.

If the goal of a product is to grow year on year. Then every product will have to appeal to more and more users. Overtime they will become slower, suffer feature bloat. Finally their support forums will become full of unanswered requests. Just look at SAP or Microsoft products - to many features, to expensive and too slow. If you can do it better give it a shot but as @zoowho points out learn about the competition because they will be up for a fight!

Almost ever product you try to think of will likely have a competitor in it. It's rather rare that you will think up a new idea. What does matter is if you can build and market a better product than your competitors, especially one with a unique value proposition. If you're worried there will not be enough room for you in the marketplace, think again. We all underestimate how many competitors can do well in the same market. There are countless examples of this history. Apple, Google, Facebook, Microsoft, etc. They all were not the first ones in the market. They just made a better product. Set your sights on doing it better, especially if it's a product you're passionate about.

It's important to know which competitors you are up against and what their strengths and weaknesses are. Ignorance to your competitors could be a downfall to your business. However, if you know who the other players in the space are then you can know where your business can thrive.