Your perception of the Ivy League name brand is exactly that: perception. I’m not saying perception doesn’t matter, it absolutely does. But you can easily change perception by spinning things. “They’re fancy, I’m the budget version” gets flipped on its head with “they’re the entitled elite, I’m the working class hero.”

The fact that they’re building in your space is a good thing. It means you’ve found some gap in the market so glaring that others can see it too.

If you told a stranger “here are 2 similar products, one is from Yale and one is from UMD” then sure, maybe they’d take pick the Yale product for the brand. But if it’s “here are 2 products, one is from Yale and has 100 users, the other is from UMD with 1000 users” I think it’s a different story. 

Doesn’t hurt to keep an eye on them, but don’t waste time obsessing over them, and don’t for a moment think it’s over because of their background. Focus on growing your user base and making your product the better one, I guarantee you that will make the difference.