Clay Shirky in one of his essays about “Situated Software” says :
“We’ve been killing conversations about software with “That won’t scale” for so long we’ve forgotten that scaling problems aren’t inherently fatal. The N-squared problem is only a problem if N is large, and in social situations, N is usually not large. A reading group works better with 5 members than 15; a seminar works better with 15 than 25, much less 50, and so on. "

He comes up with a persuasive argument that software indeed has long tail side to it which has been ignored by a lot of people. If a web application can cater to a unique set of people and fits its social context, its fine. There is no need to get fidgety about scale and all those issues which were the center of attention during the crazy dot com days.

Jotspot by Excite founder definitely seems to be inspired by Situated software as his product clearly falls in this category.

“Most software gets only a few users for a short period; why not take advantage of designing with that in mind?"