Thriving in Crowded Markets

Note: This article was also posted on Indie Hackers

Does it ever feel like there are too many software startups? That many of these
startups are competing in the same space yet still getting funding and still seeing
various levels of success? That even more of these startups seem irrelevant and unnecessary?

How do you find new business ideas when everything has already been done before? How do you compete when there are so many other versions of the same thing out there?

These observations are a good testament to the continued opportunity of starting a (micro) SaaS or software product. A few things I've noticed:

1. As the successful disruptive startups of the last decade get bigger, they become more extractive and harder to use. This creates a situation where the disruptor becomes the disrupted as smaller, more nimble startups can enter the market and erode market share from the incumbent.
2. Most people don't want or need all the features the leading product provides, so going with a simpler offering at a potential lower price point makes integration easier from a product and budget perspective. It also simplifies building these startups since you can go to market quicker with fewer bells and whistles.
3. Building a niche product in a crowded market can differentiate your product from the masses, allow you to focus on solving a specific problem, and can let you tap into a more appreciative and supportive community. Even the smaller TAM of a niche can result in meaningful revenue.
4. One person's trash is another person's treasure, when it comes to paying for products and relevance. The reach of the internet is massive, and for those things that you may not value, many others will.

Software is eating the world, and we're only getting started. A crowded market shouldn't prevent you from identifying an underserved opportunity. Build for a niche with a fraction of the features, get to market quickly, and you might be surprised to find yourself among the ranks of the successful.