Over on the BOS forums there's an interesting thread by a MicroISV who thinks his market is too small and that's why he's not selling enough software. In his post, his two theories for why the sales are slow are:

1) The market size is really, really small
2) My marketing skills are not very good (yet)

I'm here to tell you that in the modern software world there is simple no software market that is too small. It doesn't exist. If you're selling your software over the interwebs you're reaching the entire world. At least a billion people have internet access. Those people have infinite needs. If you're a MicroISV there is NO market too small to make you at least an decent living (say 100K/year).

In this fellows case he says there are competitors, in that case then you know for sure that the market is there. So the correct reason why he can't make sales is almost certainly #2 plus any execution problems he may have. If his product doesn't stack up then that will always be a problem, but it's not a market problem.

This isn't to imply that all markets are equal and that some won't be easier than others, but almost any known market (not something you just invented out of the air) will have enough space for a MicroISV given enough skill and determination.