One of the most important lessons an entrepreneur needs to learn is to avoid fighting battles your startup can't win.
I like to make this point with entrepreneurs by sharing a funny story from my life. When I first met my wife (I won't share the year, for fear of comments like, "Wow, that's the same year I was born!"), I was (unknowingly) in competition with another guy she'd recently met.
One weekend, my future wife asked me if I wanted to go clubbing with her. Sadly, unless it's ballroom dance, my dancing abilities are like my C++ coding abilities--non-existent. I thought fast. "Sorry, but I'm still recovering from a sprained ankle from playing basketball. Maybe in a month or two." By the way, I *did* have a sprained ankle, though it wasn't bad enough to prevent me from dancing.
Much later, after she'd seen me (non-ballroom) dance, she said, "That was a pretty slick trick you pulled." By then, I had won the war, and was firmly ensconced as her boyfriend.
The point is, you need to know what your startup can and can't do. There's no shame in being bad at something, as long as you're awesome at others. It's not admitting defeat to back away from a battle you can't win.
This still comes up today; at PBworks, we don't respond to all the RFPs we receive. If we don't think the criteria fit with the things we do well, we simply tell the potential customer, "We don't think there's a good fit with the RFP, but if you're interested in what we do, we're happy to talk outside the process."
It's hard to pass up potential business--especially when you're a raw startup that's just getting off the ground. But avoiding battles you can't win is the key to winning the war.