I’ve just discovered a competitor to our app has been accepted into YC. Am I screwed? What can I do?

You're not technically dead until you decide to be. Though at any point you're completely in denial which of us are in in terms of building something, its the source of our optimism and hustle power and our rose colored glasses of glory that cannot be. YC doesn't mean easy victory for anyone, but it does spell attention, attraction and conversational weight. Your competition still needs to hustle, and now you gotta beat that hustle. You're likely more hampered by not having a co-founder to share the load with. If you have superior code skills, executing regardless is worthy. If you're a mix of idea/code, and more on the idea, you're likely to be eaten. Find a someone to carry the cross with you, keep hacking until the idea tells you to stop. Share your idea.

Several options here...and remember I don't know what you do or what your app is... The last thing I'd do is give up. There's almost always room in any market for competition, just because they're being funded by YC isn't a big deal and doesn't mean they're better than you. Learn as much as you can about them. What are your product differentiators? Listen to your customers... Are you producing or providing anything people want they your competition is not? If you really are just the same app, think about changing your business model, rather than being an all star revenue producing potential IPO monster, consider structuring yourself as a potential merger / acquisition target from your YC competitor. Can you focus and lock down a specific segment of the population or a specific geographic region? This would make you an ideal growth acquisition for your competitor. Just remember.... Having competition opens as many doors and revenue streams as it closes. If you want anything more specific you'll have to tell me more about what you do. I hope that helps a little. Cheers - @hookemgriff

Why not apply to work there and pool efforts? They may still be interested in founders if it's early enough.

Mint launched a full 10 months after Wesabe and went on to own the market.

First is not always the best. It can expose the potholes for the follower to avoid.

Also, there is a strong possibility that your competitor will pivot away from competing with you directly during their YC participation.

Which might be a warning sign that the 'validation' you thought you had was premature.

A competitor in YC means there is potential market however many of the companies chosen are based on founders. The ideas tend to change and pivot while in the program.

Now, if this YC accepted competitor becomes a success then you have a bit more of leverage with other investors looking to jump into the game.

Having some, not overwhelmingly better competition is good, it gives your customers a reference point. I would not give up at all.

Keep going. Every idea is unique and the small difference may be the winning point.

There is no proven start up formula. And no one person, group, VC has the answer. If that was the case we would all be millionaires.

Just make sure what you do is better.

90% of YC grads fail.

Focus on your business, be driven by the customer and stick like a laser to what gets you traction.

If you have a tenth of the resources but don't end up dealing with 90% of the distractions that take you away from the customers , you'll come out ahead.