That's exactly what I'm banking on with the new app I'm developing http://www.mightycv.com. I needed a new résumé and didn't like the more generic builders I found out their. I wanted a résumé builder that worked for hackers and integrated easily with HN, github and stackoverflow and so I built one. I really hope that by scratching my own itch I've executed well and made something that others will find useful.

If there's lot's of competition in a particular area then I think it might be a better plan to focus on a niche part of that larger market. Remember facebook was only for college kids to start with.

That way you get two hundred java IDE's.too much competition.

Better: connect your knowledge of creating , with the knowledge of a domain expert who knows the problem well.