There sure are a lot of competitors and it takes a good amount of planning, development, and funding to succeed in today's directory market. I've been planning and working on a new directory for the last three years which I'll be announcing it within the next few weeks. Few people here already know about it
Creating a web directory is not a bad idea, only thing you need to keep in mind that you are creating a directory to earn in the long term. Many webmasters create a directory only to earn money in a very short time which is not possible. Building a good directory requires patience and investment of time.