Eric, thanks, that article was quite interesting. Here's the link for your post that has the full article, I had to dig around: link text

There are dozens out there and everyone seems to think he will do better than the previous ones. I bet it's just marginally better

"A lot better" is best but "Marginally better", I think is a good start.

Hmmm - is there a question here?

Competition isn't just an online phenomenon - and market saturation is somewhat of a subjective opinion. How does one know where there are enough sweet drinks in the marketplace?

as long as there are services that you can get at least 1,000 true fans - I don't think it can be saturated

There are even more new blogs created daily than the number of new startups, and hundreds of thousands of new posts.

Does that mean you shouldn't blog? Does that mean new blogs cannot be relevant?

How many new bands form every day? How many new songs are written? Does that mean you can't write new music?

No, but it does mean you can't coast and expect success.

Same thing with a company.

Let me ask you this. Is there still much suffering in the world?

If your answer is yes then you know the answer to your question is No!

Starting a business is not about getting ideas.

It's about finding problems and figuring out how to solve them. So unless you think all is good and there are no problems to solve then the world is your oyster go find a pearl.

There are so many problems and new ones coming in as both technology and most importantly we humans become more and more sophisticated and complex users of technology which opens up for completely new markets.

I have at least a hundred things in my life that at times makes me miserable and I wish someone would solve and another hundred problems I want to solve myself.

Take a look in your own life, look around and ask friends. There are bound the be problems that should be solved.

Don't worry about becoming the next Bill Gates.

Worry about finding a thousand customers that pays you 20USD a month and you have one million in a year.

Well that is just my five cents.

If you offer something genuinely new, the market is not saturated and you have a good chance of building a strong business.

However, if you watch the deleting domain lists, you will see dozens of people who have tried to do exactly the same thing as an existing online business losing their shirts daily. Building a long term advantage online isn't easy, but being first mover can be a big help.

The cost of starting a web company these days is relatively low. If you're technical (i.e. can write the code yourself), then the cost of tools/infrastructure is relatively low.

Given this low barrier to entry, it's not surprising that we're seeing so many startups.

Having said that, I don't think this is a reflection that the market is by any means saturated. I think the overall opportunity for creating compelling software that people find useful/entertaining is as large as it ever was.

It would seem so... This article from xconomy.com gives a pretty interesting and detailed look at how the startup world has been. This quotes pretty relevent

But what if none of this really matters? What if it turned out that the number of new companies created by entrepreneurs is pretty much the same every year—and that things like how much money venture firms are handing out, or how many companies are achieving lucrative exits, or how many students are graduating from business school, or how many startup incubator programs are springing up, make no difference whatsoever to the nation’s overall levels of entrepreneurial activity? Would this mean that all the conferences and white papers and blog posts about the best ways to boost innovation and entrepreneurship are, in the end, pointless? Well, that’s a serious question now—because the last three decades of data, according to a new study from the Ewing Marion Kauffman Foundation in Kansas City, MO, show that the number of new businesses incorporated in the United States holds steady at about 700,000 per year, give or take 50,000. It’s as regular as clockwork. In fact, it’s as if American entrepreneurs were programmed to start 700,000 new ventures every year—in the same way that, say, American parents pass on the genes for red-headedness to roughly 170,000 newborns every year.

The articles not too long and gives some great insight.. I'd give it a quick read through!