Google is constantly making the tail shorter by getting better at search – and that allows the tail to grow. As more results turn up for long, specific key phrases, so searchers learn to become ever more specific when searching.
I’ll bet the average length of search phrases has doubled over the past decade.
That opens the door for the little guy. Or rather, it keeps the door open. It’s always been open on the Web.
So focus on differentiating your business/products/services. Make yourself the perfect destination for a tiny fraction of the online community and you will be doing very well. We offer logos for sale. Sure we do custom logos too, and some stationery and web design. Right now that helps to pay the bills. But selling pre-designed logos is what we shine at. Thanks to the long tail it has become possible to do away with the other stuff and sell only pre-designed logos – and it will one day be possible to build a business purely on selling pre-designed logos within a specific industry.
This applies universally, of course. Whatever it is that you are doing now, chances are that your occupation will be broken into 2 or more specialized areas over the next 10 years. You could wait for it to happen or you could lead the way. Be the first web developer who specializes in ___. By the time ___ is in high demand, you will be the established, respected leader in the field.