This is why mediocre products with mediocre marketing make bank. The games industry is very competitive, and so is the iOS app market. But that's only a tiny percentage of the software market (measured in dollars). Where are the thousands of Gmail competitors? Word processing and spreadsheet competitors? Where is a better DabbleDB? Nothing has changed in the past 5 years, and in any of these markets you can simply win with a better product and half-decent marketing. And if you make a product for a specific vertical it's even easier.
It's not like Patio11 is the first guy to ever make Appointment Reminder software. Or the 20th. But with half-decent execution and half-decent marketing he's still making a ton of money. And is he afraid that by posting on HN people here are going to start competing AR software? Of course not. Because there are so many better opportunities out there that there is no need to fight for the same customers.
How many startups do we see coming from Spain, or India, or Brazil? Very few. How many from Milwaukee? I don't know of any. But the software engineers exist. The opportunities are right here for the taking. But people just don't take them.
But you are underestimating by a lot the costs and risks of software development, for example, a spreadsheet competitor. Not only from the software development side but also from the marketing/sales perspective. If you analyze an established software company the work force in software development and marketing/sales are evenly distributed and this is not because companies love to make advertisements, events, etc but because is how (currently) the business world works: you compete in an attention economy and this costs millions.
Another thing that you are underestimating is that Internet makes much easier things that were impossible or time consuming just a decade ago but "everyone" is competing in a new league and that advantage will be capitalized by "everyone".
2. Building a spreadsheet program is a ton of work, but it's also a multi-billion dollar market. And a proof of concept can be built by a couple of smart hackers -- but it needs a good hook of course. Reality: very few people even try.
3. When a ton of money is spent on marketing then that is strong evidence for lack of competition. After all, all money spent on marketing would otherwise go directly to the bottom line. This is why restaurants (fierce competition) spend almost nothing on marketing. They can't afford to. Fierce competition => low margins => no marketing budget. Reality: mediocre products and tons of marketing.
4. The advantages of the internet are not capitalized on by everybody, as I've been saying. The opportunity is there, but people still have to take it.
3) No, just the contrary. Try yourself to gain traction with a free open source software and see how difficult it is.
4) That's what I said but it's being capitalized by a lot of people
1) Startups and small business are popping up everywhere and the majority die.
This is because it's a sucker's game. You can build the best spreadsheet in the world and Microsoft will still eat your lunch. The expected returns on a goldfish-selling business are higher. LibreOffice can't even manage to give away a tenth as many as Microsoft sells. Like, yes, building a spreadsheet program is something people could do, but it is not an idea with even the remotest possibility of making good money.
I think I have figured out the fundamental disconnect here. You are talking about how easy it is to build stuff these days, while other people are talking about how easy it is to make a living off stuff. It is easy to build things. But building something alone is pure cost, no profit. Then the hard part comes. The difficulty has just shifted around, not disappeared.
So maybe launching a general Excel competitor is a pretty daunting task because you're going up against the gorilla of the market. Targeting a specific subset of its user base can still make for a viable business.
Or maybe they're targeting local customers, just like most(?) American startups.
"Half-decent marketing"? I think you are selling Patrick short. Based on his vague hints about what people pay him to consult on their marketing, I don't think "half-decent" quite covers it. I'm halfway to decent, and empirically people don't pay me a quarter of that.
> How many startups do we see coming from Spain, or India, or Brazil? Very few. How many from Milwaukee? I don't know of any. But the software engineers exist. The opportunities are right here for the taking. But people just don't take them.
Doesn't it seem implausible that these people take all the other opportunities that are offered to them, but just not these ones? Isn't the more likely explanation that you have an exaggerated idea of how accessible this stuff is to most people?
Where are the thousands of Gmail competitors?
The reason they don't exist (or they do exist but you never hear about them) is that you'll have to pry Gmail from people's cold dead hands. Firstly, Gmail is an amazing product, and it would be really, really, really hard to do better. Very few teams can attempt such a thing, certainly not thousands. Secondly, even if you build a better product, it's extremely unclear how it would be enough better to get enough people to leave Gmail.
Word processing and spreadsheet competitors?
Exactly the same reason. Microsoft Office is an amazing piece of software, and it would be immensely difficult to do better. Furthermore the barrier to entry is huge -- word processing and spreadsheet software that can effectively compete with MS Office would take decades to build.
There is something to be said for competing with Google's online office offerings (and I know some really smart people who are doing just that), but again, it's not as easy as it seems.
Where is a better DabbleDB?
DabbleDB didn't work as a business. That's why there is no better DabbleDB -- there is no market for it.
I don't think it's so much that there's no market for it as that the market is very hard to reach and we had no good channel. Intuit's Quickbase is a very healthy business, because they have a channel to millions of SMBs. We didn't, and didn't know how to build one, so we grew much more slowly (though I should say that by most sane, non-valley standards we were doing just fine, thanks ;)
I learned a lot of things at Dabble, but I think the biggest lesson was that the three most important things in B2B software are distribution, distribution, and distribution.