Disclaimer: Our focus at Fogbeam is on "deploy on premises" apps, not SaaS. And while we expect to offer our software in SaaS form later, it isn't our focus, so my perspective may be a bit skewed.

That said... I feel like you just have to start with something that interests you. In my case, I was just plain fascinated by the idea of "social networks in the enterprise"... I was also really interested in machine learning / artificial intelligence, knowledge management and the idea of "collective intelligence". And over time, different events just led to all the dots starting to connect, and I started to see the kinds of products I wanted to build. Of course, the vision was pretty fuzzy at first, and we've iterated on it, and de-emphasized some aspects, added new aspects, promoted aspects that were originally less emphasized, etc.

The thing is, there are absolutely people already doing some - if not exactly all - of what we're doing. There are "enterprise social network" products out there... hell, there's actually a laundry list of them: Jive Software, Yammer, Hall.com, Tibco Tibbr, IBM Connect, Salesforce Chatter, etc., etc., etc. But, to that point, two thoughts:

1. Despite how many ESNs there are, we still have some aspects to our approach that are actually different from the other ESN products out there. Our vision also goes bigger than just the ESN... that'll be our first product, but we see it as just part of a much larger whole. And it's that "whole" in sort of the "whole product"[1] sense that we think will really set us apart when it's in place.

2. Competition doesn't bother us. I remember reading a blog post from Bob Parsons (of GoDaddy fame) a few years ago, that said something like (paraphrased):

"Don't be scared of crowded markets, just be better than everybody else".

That resonated with me. Call me arrogant, but yeah, we think we can build a better product than Jive, Yammer, Hall, Tibco, IBM, Salesforce or whoever. And we think we're operating with a superior big-picture vision. So basically, we don't care that there's "somebody else doing that", we just intend to beat them.

So I guess if I had any advice for you, I'd say:

Start with something you're already interested in. Look for places where two or more of your interests intersect, or can be combined in such a fashion as to create something novel. Once you have the basic idea in place, do a deep dive into that world... read the literature (if there is any) on the domain in question, talk to people who might be potential users of your product (or, at the earliest phases, anybody who'll talk to you) and solicit their ideas. Look for the "X sucks" forum posts for your competition and see what people are complaining about. There's your opportunity to do better.

Another idea I'm big on could be paraphrased by saying "everything old is new again" or "the only way forwards is backwards". I know I've ranted about this before, but I think there's a ton of value in going back and reading the works of early computer industry pioneers - people like Vannevar Bush, Douglas Engelbart, J.C.R. Licklider, Norbert Wiener, Herbert Simon, Alan Newell, Ted Nelson, Marvin Minsky, etc. and seek inspiration in their writings. Surprisingly, there are ideas that were being batted around in the 1960's (or earlier) that haven't been fully realized yet. Take that inspiration, merge it with your interest area, and see if you can't come up with some ideas for ways to differentiate your product.

Also, watch that Brett Victor video[2] that is posted here on HN quite frequently. It's chock full of amazing insights.

Edit: to add one more thing: I don't know that being passionate about the thing you're building is sufficient (it almost certainly isn't) but I'd almost be willing to be that it is necessary. At the very least, I think it's a huge benefit to you if you're genuinely enthusiastic about the product and would want to use it yourself. In our case in particular, I definitely want to grow a large, profitable, kick-ass company... but even if we fail at that, or even if we weren't even trying to do that, I'd still enjoy the process of creating this stuff, because working on it is genuinely enjoyable to me. And when the hours start getting long, and things aren't going your way, and some doubt creeps in, I believe it's a lot easier to keep moving forward when that's true. If you do something that's only about the money, I would question if you'll be motivate enough to power through the inevitable tough periods.

[1]: http://en.wikipedia.org/wiki/Whole_product

[2]: http://vimeo.com/36579366