Should I continue to work on mine? Or ditch it because it is redundant anyways?
I'm always seeking for a new one that solved the annoyances other projects had so I can just use that one instead. But there is always something off. I could improve the code or give the author a suggestion. Problem is, I'm in dire need of a portfolio. A whole project is far more impressive than one or two patches or a mere suggestion in someones issue tracker.
In the end I would be releasing code I don't really intend to use as soon as something else has all I need. One that probably no one would be using. Perfectionism and pride suddenly come into play.
You'll probably learn interesting things, and have something you can use either for real, or as you say for a portfolio-project.
FWIW I wrote http://github.com/skx/templer for similar reasons, in my case annoyance at how poorly other static site-generators handle symlinks.
I use it these days on several sites such as http://lumail.org/ & http://tweaked.io/ both of which other people have contributed to, which makes me think the barrier to entry wasn't too high.
It's generally not a good thing to be the only game in town over the long run.
The issue here is that my product is definitely better designed, and can match (perhaps even slightly bypass) the technical capabilities of the rival product!
But It'd be safe to say the following — The "rival" has established a (4-5k people) community around the product, and my better designed version aims to build a larger community of users. I'm not going to be charging, and neither is he.
If you both aren't going to be charging for it, is the other one open source? Is there some kind of arrangement you two can make to work together?
If you pose any threat to your competitor, they'll knock-off your features before you get off the ground. Then, you lose your main selling point and you're left in the dust.