It is easy to get trapped when thinking about a new product how to out do the competition. Many products and companies get stuck trying to beat incumbents by producing more features with less money and in less time, it is easy to forget you can out do the competition by doing less.
What's the right approach to new products? Pick three key attributes or features, get those things very, very right, and then forget about everything else. Those three attributes define the fundamental essence and value of the product -- the rest is noise. For example, the original iPod was: 1) small enough to fit in your pocket, 2) had enough storage to hold many hours of music and 3) easy to sync with your Mac (most hardware companies can't make software, so I bet the others got this wrong). That's it -- no wireless, no ability to edit playlists on the device, no support for Ogg -- nothing but the essentials, well executed.
We took a similar approach when launching Gmail. It was fast, stored all of your email (back when 4MB quotas were the norm), and had an innovative interface based on conversations and search. The secondary and tertiary features were minimal or absent. There was no "rich text" composer. The original address book was implemented in two days and did almost nothing (the engineer doing the work originally wanted to spend five days on it, but I talked him down to two since I never use that feature anyway). Of course those other features can be added or improved later on (and Gmail has certainly improved a lot since launch), but if the basic product isn't compelling, adding more features won't save it.