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A comment by Chris Smolinski of Black Cat Systems on the Mac Small/Software Business mailing list (there doesn't seem to be any consensus if it's "Small" or "Software") inspired me to share my views on this: "Be your own customer."
This was in response to a question on how to get good ideas for software, with the popular opinion being that scratching your own itch can lead to great product opportunities. Find something that irritates you about existing products, or something you want to do that isn't covered by an app already, and create a solution.
I can vouch for this approach. Although my products started out in various ways, most of them started because there weren't any satisfactory solutions at the time. For example, Simon began as a way for me to watch for website updates, and became more sophisticated as it became popular. There weren't any easy-to-use Mac products for site monitoring at the time - and the ones that did exist don't anymore. Similarly, I created Time Out to improve my health, since I can suffer from eyestrain when staring at a computer for hours on end. BlogAssist was written specifically for my wife, who was really into LiveJournal blogging at the time... but I find I use it a lot, too. All of the products have grown and evolved over the years based on customer feedback, but also my own ideas, since I use them myself on a daily basis (e.g. I used BlogAssist's Services window four times to create the links in this post).
When you are your own customer, or "eat your own dog food", to use that colorful and somewhat unpleasant phrase, you notice little irritations in your initial implementation, and can do something about it. Chances are, your paying and potential customers are also noticing such issues. They can can also be a great source of ideas for better ways to do things that you may not have thought of, perhaps because you're so used to a certain way of doing things.
So if you're a developer looking for the next big hit, or just something to get you started, look inside yourself for your inspiration. Sure, an idea has to have some market appeal to be a success, but even seemingly niche products can be successful if you do a good job. Put your heart into it, and people will respect that. Keep working on it, and using it yourself, and word will spread.