I was competitive too when I was young and starting out. Being competitive is a part of being a kid, it's what makes you strive to become better. Don't hold it against the other guy for being as good as you are on guitar, use it. Like Jolly said, jam with him, become his best friend, jam with as many people as you can, whether they are better than you or not. Jamming with other people is the best way to learn to play in groups.

If your competitive on stage, it'll only hurt your performance. Music's not about competition, it's about expressing a feeling. Just have fun with it and you can't go wrong.