I don't think it's a mistake, it's a risk, but it depends on him whether it's a mistake or not.
It depends on how he does his market research, whether he has innovative ideas, etc.
But I don't agree that entrepreneurs should be scared because they see a lot of people in the business. That's letting themselves be intimidated. If they're good at what they do and know how to manage their resources, they can succeed.
But it's important to emphasize that, as in any venture, there are ups and downs, there are failures, perseverance is required. You shouldn't believe those motivational charlatans on YouTube who always tell you that starting a business is easy and that with their advice you'll make millions of dollars in two weeks. That's a scam.
As in any venture, success is difficult.