However, that same $1M/yr is enough to sustain a bootstrapped business and even possibly build the credibility to raise a larger round and try to win the space.
If a company is already solving a problem, a better question to ask is "why didn't I know they exist?" It may be that they aren't properly tailoring their marketing to the target audience, in which case you have a clear opening.
As a "personal anecdote", we (https://sheetjs.com/) offer a variety of solutions for problems involving structured data. Before we started, there were plenty of solutions but every solution had various compatibility issues or didn't work with our data. Even in 2019 companies turn to us because of compatibility issues with Google Sheets or Excel 2019. We went through the same analysis and concluded that neither company thinks there will be a meaningful improvement in revenue or marketshare
I'll take this opportunity to tell a long-winded story about how that number can be two orders of magnitude larger, and still be too small.
I was with Slide when Google bought us in 2010. They bungled the acquisition (bought us to work on Google+, which had already made a bunch of disagreeable decisions by the time we were ready to rumble), so we were left to our own devices for a year, in which time about 12 of us made something called Photovine, a photo sharing app that would have competed with Instagram, and we were getting pretty universally positive press. I think TechCrunch called it the best mobile app google had ever produced, and all of our beta and early release engagement numbers were bananas.
(We also had loads of fun with it — the core sharing mechanic was organized around shared captions that we called vines, and we spent most of our play-testing time swapping visual puns.)
Anyway, if you project our trajectory generously, which didn't seem out of the question given our early traction, we would have wound up competing with Insta, doing business in the hundreds of millions. But Larry, in all his "more wood behind fewer arrows" wisdom, decided to axe the project, as he did many, many others, and re-assign all of us to YouTube, which, granted, was gearing up to compete with TV, and needed more staff.
And often, $1M/yr is not even needed. Many developers don't necessarily want to become managers and worry about funding rounds, hiring, etc. $1M/yr is already a pretty good lifestyle, no need to get further funding or scale the business if you're happy running the project on your own.
Competition isn't bad - that just means there's a market large enough for different companies to want to fight for a share of.
As a small businessperson, I find it's critical to be aware of the different strengths and weaknesses that come with being big or small, and to leverage them to your advantage.
My favorite one-liner about the difference is: small companies make it possible, big companies make it cheap.
Then you would start a marketing company. Or it will become a fight about who spends the most on marketing, and the only winner would be the marketing companies.
That's not to say that you cannot be successfull running a small service, but it needs to be differentiated in some way and not just copy the existing ones (which works fine for a chinese restaurant if there isn't one in that part of the town).
The food is almost identical, the prices too, they are of course at a fixed location (but not quite sure how that makes any difference) and there are no seat constraints. Yet these places seem to stay alive even though none of them really offer anything different to the chicken shop next door.
https://mindyourdecisions.com/blog/2008/03/25/game-theory-tu...
1. Time between walking in and paying.
2. Time between paying and receiving your food.
If one of those restaurants could maintain quality, and keep the above two metrics flat whilst a scaling to 4x, then the other 3 restaurants would lose business and eventually go out of business.
Online businesses don't usually have the same limits to scale.
Not all but many, ask yourself if you've ever wondered how 7-8 chicken ships stay open when only one is good and ever has customers.
Something does
I think these are very cool examples on how two seemingly the same thing end up diverging and finding up their own path.
https://medium.com/@steve.yegge/why-i-left-google-to-join-gr...
Doesn’t matter, they don’t need to dominate, just stake out a niche and distinguish themselves from the dominant player.
We're faster, simpler, privacy friendly, cheaper, etc.
Most leading SaaS businesses have proven there's a market, but they're vulnerable on one of those key differentiators.
Sure, you might not conquer the market, but it's probably a safer way to build a lifestyle business than trying to come up with and market a novel idea.
Much easier to find forums of people complaining about product X not doing Y and fill that gap.
There is a net demand for Chinese food in the area, and there will definitely be such a thing as 'too much or little' supply (though obviously each offer i.e. supply is a little different)
A single restaurant will only be able to meet so much demand, so if there's a niche in terms of region or menu, maybe there's a real opportunity.
GitHub, Uber, FB - they all have network externalizations to some extent, there definitely have economies of scale, and they are playing in a global marketplace (or at least, say 'the Western world').
So, no, it's probably not a good idea to compete directly with them.
In fact, incumbents almost always win - the idea is to do something different enough, solve a problem in a different way.
Slack did not build 'better email' they went up one level and built 'better communication'. And a whole bunch of other things of course. But 'slack e-mail' probably would not have yielded them the same result.
One thing that the losers have in common is that their execution was not good enough (or outright bad in the case of ExpertsExchange).
But Altavista was huge when Google started. AOL had network effects that did not help them, so it is absolutely not clear that it is impossible.
People however are more lethargic and programmed by their mobile devices these days, so it may be more difficult now.
Google had the entire internet inedexed and was running their engine from Standford with just a few machines.
The internet was tiny back in 1997.
In 1997 there was 1 million web sites.
Today there are 2 billion.
[1] https://www.internetlivestats.com/total-number-of-websites/
If instead you want to have some fun and maybe get more money back than you put in, that's a different world.
I'm increasingly persuaded that unless you go to dinner parties with say Sequoia capital people, it's better to start small, get the principles working right and then build on it.
And Google Talk/Allo/Jibe is Jabber and Asterisk with a fancy coat of paint.
This is kind of amusing given that most new modern things in the hacker news ecosystem use either electron or some other variation of nodejs. Which is usually the exact opposite of 'performant'.
Delphi calls from 1998, it was even faster than Electron in development time and cost. Yet almost nobody uses it now.
What killed it? Just one has economic bust and developer generation change perhaps?
(And no, it was not networking, it had good capabilities the too. It wasn't web either.)
I also agree that not starting a project if it doesn't have unicorn potential is ridiculous, but I don't feel like there is anything to explain there.
You can franchise, but the expansion is very different to what software can do.
That said, there are so many things that can be done better than the standard software, or where different varieties can work better for specific cases.
That being said, I agree with the point of your comment in general, and we shouldn't stop ourselves from creating something we value just because it exists already. Working on something we care about gives meaning to our life, and who knows, maybe your solution will turn out to be the best one out there.
But then I realized, if my town can have 3-4 Chinese restaurants with the same exact menus (probably supplied by the same exact distributors), and they've all operated continuously for over a decade....who cares about uniqueness? Sure, none of these copycat places are raking in millions, but it's enough to support the livelihoods of the owner and all of his/her employees, so who cares? Your business doesn't need to be a unicorn to make you happy, as long as you're happy with that outcome.
Of course, tech does not operate the same way as Chinese restaurants, and for that I point you to Accumulative Advantage:
>Accumulative Advantage is when a small advantage at the beginning of something, such as kindergarten, becomes a little difference that leads to an opportunity that makes a bigger difference a bit bigger, and that edge in turns leads to another opportunity, which makes that initial small difference even bigger.
Put in context: You don't have to follow the same path your competitors did. Uber/Lyft poured billions into normalizing the concept of being driven by some stranger who uses the same app as you, so any new ride-sharing platform can spend that money in other areas. Giants like Microsoft have decades of technical debt they need to tackle; you can start building with 2019 libraries, 2019 paradigms (wouldn't the cloud have been great for startups ten years ago?) and 2019 performance.
In order for the underdog to win, there first has to be an underdog. If you're brave enough to start, you may just be brave enough to win.
[1] https://educationinnovation.typepad.com/my_weblog/2008/12/is... (yeah, weird source, but I'm just trying to define the phrase)