Building a successful niche business requires that you take those ideas of how you see something working better and putting them into a plan and then flushing it out. It requires you to figure out how you can really make them work, not just as an idea, but building a model that proves what you're thinking to be true.
The greatest businesses that I've started have come in highly fragmented, highly competitive marketplaces. I've entered into industries that might have been dominated by old time players that accept the status quo and are happy with the existing business that they have and forced them to change their ways in order to keep or develop new business.
I've taken what they've done poorly and improved upon the process while educating their customers and making them realize that they don't have to accept what they've been given and caused them to demand more for their money.
While I've taken business from the big guys, I've also given business back to them, a business that runs more efficiently and allows them to do a better job with less effort. I've focused on specific parts of industry and made my mark with process improvements.
It doesn't matter how much competition is in a niche if you're coming at the niche from a different angle than everybody else does. You have to look for areas in need of improvement, provide the solution that fixes the problem and learn how to Monetize the solution to the problem.
Don't worry about the naysayers, just focus on finding someone to pay you for your solution.