The fun part of open source is that a market of 1 interested person is enough.

As an extreme case, Linus Torvalds decided to write a terminal emulator, do it straight on the bare metal for his PC, accidentally deleted his OS in the process, then got carried away a bit trying to survive without real OS. None of these decisions made any business sense, yet we have the entire Linux ecosystem out of it.

Not that much smaller, though. Of course the market for things-that-are-X is larger than the market for things-that-are-both-X-and-Y, since the latter is a subset of the former.