Joel Spolsky describes why software for a vertical market (vertical software) is a good option for startups.  Two advantages of developing vertical software are:

1. It’s easier to find customers. If you make dentist software, you know which conventions to go to and which magazines to advertise in. All you have to do is find dentists. 2. The margins are better. Your users are professionals at work and it makes sense for them to give you money if you can solve their problems.