He's simply making the point that even when your business can't capture a fraction of the total market that's worth discussing in numerical terms the numerator can still be quite noticeable. Your average small web company wouldn't mind having 100K paying users right now and they probably won't when 1M is less than 0.05% of net users. Reasoning about percentages and limits is relevant if your target user base is of the same scale as the total market or you're counting on a VC pitch based on winner takes all. It's not mandatory if all you care about is building a sustainable business: My local coffeehouse probably has a few hundred regular customers and their share of the worldwide coffee business is effectively 0%, but they're doing just fine financially.
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