> There could be hundreds and thousands of small businesses, say in a certain FMCG market in different local ares. A tech market with hundreds or thousands product businesses catering to a same target audience, probably, doesn't exist at all. Product companies tend to either grow or whither. Centralization is the norm.

Each local area is a separate market. Those types of businesses have limited geographical range, and a given range can only support a handful in a specific segment. For a technology business, the market is usually not limited by geography. Fundamentally, it is the same principal: a given market can only support a limited number of players.

Now, the size of the market may preclude traditional small business growth models. It depends on how tied to locality a particular business idea is. I could see, for instance, something like Homejoy working on the scale of a single metro area. In fact, having dozens of metro-area-sized Homejoys might actually work better than a single, national incarnation.