IPO may help the founders cash out, but it won't be enough for the company to overcome heavyweight competitors like Microsoft, Amazon, Google and Apple.
Yes it will. An IPO can either cash you out, or it can raise cash. In fact, once you've had your IPO, you can raise cash quite easily. Amazon could never have competed with WalMart if they had kept private.
And once they have the cash from an IPO, where do they go from there? The problem is much more complex than you're suggesting
This is hackernews, nobody thinks about what actually happens after an exit event. :-)