What will you do if you see a similar product been released before your release week?

I believe, it really depends on your product and how much it's differentiated from other players. If it's somewhat different than others, I think launching makes perfect sense. If there is no differentiation in the means of directory content, I believe trying to create a differentiation point can be a good effort. The differentiation can come in various ways: making it cheaper, changing the medium, making it a different kind of product with the same content can all be differentiation points. As an example, let's say you have a Notion page with AI resource directory and there are lot's of competitors that offers the same thing. Maybe creating a weekly newsletter with AI resources that you already have and adding a niche AI market report in it can be a very different product from other directories, assuming you have the very same content with other players. If your content is somewhat different, you have the differentiation already.

This is really heart breaking. But like @girlintheframe rightly pointed out, a plethora of products may indicate a huge market! Wildly adding features may not help. Take an moment to clearly think through it. Can you take a different positioning? Or address a different market segment or need? Can you open up a new market? Or offer a different price point? All the best

consider it as validation If they too released something similar and they are getting attention it means there is need for your product. The market size is so huge there is place for everyone to do well. This will also help you understand different marketing strategies. Not having competition is infact considered bad because it implies there isn't need for the product. Whatever you build there is a existing similar product in the market. If you get stuck on this, you will never be able to build anything.

I would still plan to release your product ASAP. You can always do a kind of re-launch when you add a new/major new feature. Does your product offer something slightly different than the other products? If so, I would pitch that difference heavily in your marketing.