The spreadsheet example is an interesting one. I'm aware of several domain-specific products that target very niche markets, particularly in the scientific space, that are essentially little more than glorified spreadsheets. However companies still pay hundreds to thousands of dollars a license for these products because they bolt on enough domain-specific features to their spreadsheet that make it easier for people who are domain experts, but not necessarily Excel experts, to do their job. In a lot of cases these products are developed by small teams.

So maybe launching a general Excel competitor is a pretty daunting task because you're going up against the gorilla of the market. Targeting a specific subset of its user base can still make for a viable business.