The most innovative software designed over the next 10 years will 1. be web-based, 2. will come from small teams, 3. will come from self-funded companies, and 4. will be for the side-business or 1-10 person business market.
The long tail is a buzzword. Whats real are the millions of side-businesses out there. Independent freelancers, people who work for their employer during the day and then run their own side business at night, passionate hobbyists that generate some income (and even those that dont). It seems everyone has one these days. A little something here, a little something there. Something they love to do, or something they have to do, but the trend is clear: Many people are building their own side-businesses. And they need software (just not too much).
When you think small business, think 1-10 people not 50-100. Theres an endless supply of 1-10 person companies. Who cares about the Fortune 500? Its time to care about the Fortune 5,000,000. Forget the enterprise market. Forget the mid-sized company market. Build for the smallest of small companies and youll find a thirsty, neglected market waiting for you.