If the market is filled with cheap products and a clone of your product can be easily made, then the survival of the business is in positioning, marketing, packaging the product, distribution, sales...
This makes the technical skills required but not sufficient part of the whole business and there are many businesses (like restaurants) that are bad businesses, because many people are willing to open a restaurant as a life-style choice even though most of them are not a good business. This influx of new competitors, make the current restaurant owners profit to go down, because of the increased competition that isn't purely market driven.
In the software world that means "a small product" won't have any moat & pricing power, and your competitors might be wiling to subsidise it for years as a side project, making the whole market suffer from profit erosion (an economic term) leading to zero profit long-term equilibrium.
For example try charging per message (as previously charged by SMS/MMS) in the era of subsidised messenger apps with free calls and messages.
This makes the unique position of SAAS software with 9$/month subscription highly doubtful in the future.
This makes the technical skills required but not sufficient part of the whole business and there are many businesses (like restaurants) that are bad businesses, because many people are willing to open a restaurant as a life-style choice even though most of them are not a good business. This influx of new competitors, make the current restaurant owners profit to go down, because of the increased competition that isn't purely market driven.
In the software world that means "a small product" won't have any moat & pricing power, and your competitors might be wiling to subsidise it for years as a side project, making the whole market suffer from profit erosion (an economic term) leading to zero profit long-term equilibrium.
For example try charging per message (as previously charged by SMS/MMS) in the era of subsidised messenger apps with free calls and messages.
This makes the unique position of SAAS software with 9$/month subscription highly doubtful in the future.