The product is not just the program. People don't just care about function, they care about how the app makes them feel, how it affects how they think others perceive them, etc. -- the companies that can afford to market and make their experiences sexy will run laps around purely functional apps that can't, no matter how well they solve the problem (unfortunately). Good marketers and designers do not have the same proclivities towards working for free as developers do.
The hope is that the markets are large enough that niche apps can carve out a healthy revenue with a more personal, "homegrown" experience. This is where my product lives, and so far it's worked well enough.
Also, switching cost is never zero or even close to it. The user still has to click a button. I know it sounds like I'm being facetious, but coming from a large-scale B2C industry, a single button click is an enormous obstacle.
The hope is that the markets are large enough that niche apps can carve out a healthy revenue with a more personal, "homegrown" experience. This is where my product lives, and so far it's worked well enough.
Also, switching cost is never zero or even close to it. The user still has to click a button. I know it sounds like I'm being facetious, but coming from a large-scale B2C industry, a single button click is an enormous obstacle.