I thought this was implicit: you find a problem you deal with on a daily basis.
This is probably why there are so many more startups pitching development tools than, for instance, something to make the lives of truckers a little easier.
If you work as a regular engineer, you must come across dozens of daily problems any of which are not properly solved by your current tools. Even simple things like following up consistently, or checking to see if someone responded to an email to a third party etc
Addendum:
In response to many comments, I should add that this method is not supposed to guarantee you a good idea, but is a source for ideas to filter, refine, develop or abandon.
This is probably why there are so many more startups pitching development tools than, for instance, something to make the lives of truckers a little easier.
If you work as a regular engineer, you must come across dozens of daily problems any of which are not properly solved by your current tools. Even simple things like following up consistently, or checking to see if someone responded to an email to a third party etc
Addendum: In response to many comments, I should add that this method is not supposed to guarantee you a good idea, but is a source for ideas to filter, refine, develop or abandon.