[withinboredom]

This is not strictly true. But if you want to "make it big," it's pretty accurate. However, as a one-or-two-man-shop, you can make a pretty good living off of "commodity software," for which there is still a lot of competition. To make money there simply requires showing up daily and maintaining the service, adding new features, etc. As you show your service to be more reliable, your small customer base will recommend you more and more, and you'll grow.

An excellent way to spot these opportunities is to see what services big companies give away for free. These companies feel threatened by these things and need MORE competition, not less (look at what happened to email hosting for a good example of what happens if people don't compete).

When I see a company offer me something for free, I immediately see what it costs (I want to understand the value I'm getting, at a bare minimum). What I see out there is a thriving economy that I never would have thought to look for if it weren't advertised as "free."