Capitalism. Sure, you can go it alone, but if you're making good profits in your niche you better expect a well-capitalized competitor to come sniffing around.

Capitalism. Sure, you can go it alone, but if you're making good profits in your niche you better expect a well-capitalized competitor to come sniffing around. And when they find out you're minting money they'll jump in and undercut you on price, poach your talent, replicate your product (but not all the costs you put into development), and then do everything to out-compete you. And then your profits start to corrode. And eventually you're either forced to sale or forced into ever more narrow niches. Public companies have a cheaper cost of capital, which means they can, over time, outcompete non-public companies. There's a few exceptions to this like private-equity backed companies, and large closely-held private super firms like Koch, Cargill, etc. But if anything these firms are even more ruthlessly capitalistic than public companies. There's no way around this unless you occupy a very well-protected space that big companies wouldn't find profitable. I think it's becoming increasingly more difficult to find such spaces in software.