Best defense is to basically stay small/niche enough that the big guys don't think your work is worth consuming/competing with directly.
There will always be a market for dedicated tools that do really specific things REALLY well.
There will always be a market for dedicated tools that do really specific things REALLY well.
This means the smaller niches become viable. You can be a smaller team targeting a smaller niche and still be able to pull of a full SaaS product profitably. Before it would just be too costly.
And as you say, the smaller niches just aren't interesting to the big companies.
When some new tech comes along that unlocks big new possibilities - like PCs, the Internet, Smartphones (and now Agentic Chat AI) - the often recited wisdom is that you should look at what open green fields are now accessible that weren't before, and you should run there as fast as possible to stake your claim. Well there are now a lot of small pastures available that it are also profitable to go for as a small team/individual.