Starship is absolutely competing with Falcon 9 in two ways:

1. If F9 is cheaper, why would you use Starship?

2. If SpaceX decides to force Starship adoption by simply halting F9 launches or making them prohibitively expensive, well the market is still open for an F9 clone from someone else.

My point with FH is that there isn't a demand for much bigger payloads. Now, SpaceX wants to induce demand with STarlink launches. OK, so the viability of Starship is tied to the viability of Starlink. I thought Starlink was a clever way to prove F9 reusability but the first-mover advantage won't last forever.

My main point here was that F9 was developed, SpaceX's competition was the likes of ULA with their insanely expensive rockets but whether SpaceX uses F9 or not, it has become the new baseline.

SLS is insanely expensive to build and launch but it still has a much greater launch capacity. Starship's solution to this is essentially in-orbit refuelling where, I believe, it will take ~10 Starship launches to refuel a Starship in orbit. This too is an insanely complicated capability that they haven't even begun to develop yet.

And whatever the ultimate per-launch base cost works out to be the program R&D cost has to be amortized cross those launches so even if the base cost is $10M, if you spent $10B developing the program, it still matters if you launch 10 a year vs 100.

When SpaceX goes public, they're going to be forced to disclose a whole lot more information about the program cost and I suspect it's going to be a lot higher than the rosy projectsions you get on Twitter.

Another way to put it is I think Starship could be SpaceX's Cybertruck.