> What am I missing?
Execution. Using your own words, a competitor or competing startup could say to themselves "We're going to spend a couple months pivoting to [your] new business model, eliminate the same efficiency, and then [put him] out of business" and intend to do that, and still not do so.
Those "few months" often turn into much longer, but even if it was just a few months, they'd make different product tradeoffs than you did, or decide to market it via different channels than you did (and thus reach a totally different audience), or deliver a completely different post-purchase support experience, or decide to hire or not hire totally different staff, or any of a dozen other differences in execution.
Stated another way, someone might decide to clone your thing, and - much less likely, but not impossible possible - they might even clone the product[1], but they'd still arrive at a different business.
(In practice, it's much, much more likely that they don't see the importance of your innovation (assuming it actually matters), or don't see the nuances with which you executed it, so they decide to ignore it until you're far enough ahead in that aspect that the customers who value it are already happy with your product. After you have customers and market awareness, catching up is not a few months of work. But that's not the question you asked about.)
A much bigger risk is that your innovation isn't as important as you think it is, or the subset of customers who care about it are so hard to reach that you never get the chance to explain the difference, or that you implement this and do get the customers who care, but need to decide what to do next -- in the "Is this a feature, a product, or a company?" question, you made a feature, not a product or company. So, put the effort you'd put into thinking about competition, into figuring out how to reach the subset of customers who should value it the most (before building anything at all), asking them to poke holes in your theory, and incorporating their answers into a perception of where the market will be in 1-2 years.
[1]: Even someone who sets out to duplicate an existing product still has some knowledge and opinions about how to solve that problem well. Most folks will incorporate that knowledge into what they built. That is, they'll be trying to solve the same problem you're trying to solve, and in a similar way, but their own views will lead to a different product.