Comment by anish_t

if you have'nt already read it, this essay from pg is a good starting point- http://paulgraham.com/startupideas.html

In our case we have followed the path of identifying features/ enhancements/different approach to doing things in existing products that we are using ourselves. We looked at stuff that we use in our personal life as well as products/processes that we used or developed in the professional life. This really gave us a lot of options. From these, our final selection was based on a. Our conviction that this would work b. size of the opportunity c. we would have fun working on it