May I ask what mythical realm you are posting to HN from? I hail from planet Earth, and I would have to estimate that approximately 99% of all software we use is a) mediocre and b) nonetheless a source of value! ;)

I think the point of the OP's quote is that there is room for many companies in any market, even ones that seem saturated (such as Italian restaurants). You can compete and make a good money just by delivering some value, and if you can really nail one aspect of your delivery, you can make a living without needing to be the next Airbnb.

To answer the OP's question, just about any bootstrapped business fits this model. There are several prominent HNers with small niche side agencies or businesses, some of which follow the SaaS model. There are a lot more that don't frequent HN. I think anything built on the side that makes any amount of money would qualify.