Matt Cutts answers a question which bothers all the SMEs and Ecommerce website owners who start small and have to first establish a brand before they can actually do flourishing business on the web.
He gives the examples of Facebook, Instagram and MySpace which all started small but because of their agility and new ideas made it big. Any site though small initially has a potential of making it big online if you focus on user experience, if the site offers something that returns more value and the content offers quality, in-depth and insightful information.
He mentions that whatever area you are in if you are doing it better that the others then over a period of time you can expect your site to do better and better.
However if you are a ‘one person’ website versus a 200 person website then of course it will make a difference but again if you focus on quality content and user experience by narrowing down to your niche area first then gradually you can earn a good search presence by building it over a period of time which may help you compete with the so called bigger sites.