Better sooner than later. I know folks who have quit their jobs and were one 1 year in to working on their startups and then were pw0nz0red by Evil Empire South...
It's common in the early stages of a project to see competitors everywhere... see for example Paul Graham's comments on this phenomenon about midway through his writeup about the Y!C Summer program ( http://www.paulgraham.com/sfp.html ).
Don't use your imagination to convince yourself 'Google Base' (or any other rumored spectre) is a better version of what you want to do.