There's no "One Right Way" to evaluate a business idea; it's a very personal process. Everyone has different requirements and priorities that they have to balance, and what might be an amazing idea for one person sounds like a terrible idea for another.
So I'm evaluating each idea I'm considering carefully, and I wanted to share a little bit about exactly how I'm evaluating them. This might be helpful for other people looking for modest or "bootstrappy" business ideas, but it will also help me formalize some of my thoughts on the subject.
Obviously, some of these considerations are more important than the others, but this isn't a ranked list or anything where you can do math to come up with the quantifiably-best idea. It's more of a series of lenses I use when evaluating an idea, to make sure I'm taking as many important weaknesses and strengths into account before I'm more seriously invested.
Oh, and credit where credit is due! A lot of these ideas come from a conversation hosted by Justin Jackson. He started collecting ideas in a Google Doc, and I decided I wanted to expand on it for my own benefit. Then I figured I may as well share what I'd come up with, in the same spirit the original list was shared.
You may have heard that there's two kinds of products: "vitamins" and "painkillers". It's a very simple idea and doesn't fully or cleanly divide all products, but it's a useful way of understanding how people will potentially view your product.
"Vitamins" are nice-to-have products that make your life easier or better in some way, that you know you probably should use, but are easy to put off until later when you're "ready."
"Painkillers" solve a clear and present need that is not yet met. Painkillers are exciting, because they enable you to significantly improve your business or yourself in a way you may not have thought previously possible.
This isn't a clear dichotomy, because products that used to be considered vitamins can transform into painkillers as technology and culture advances (sending email invoices for physical services, for example), and vitamins in one niche may be critically needed painkillers in another. But when you consider the product and what it enables for your target market, you should be able to understand at least, is it exciting?
Exciting products are easier to market, more prone to being spread by word-of-mouth, and generally require a lot less customer education, which limits the amount of "extra work" you have to do with a constrained amount of free time.
Constraining your solution to a too-small problem space will definitely make it easier to build, but it can leave you with a product that's not really worth buying. Collecting and storing people's receipts online (for an example that may or may not come from my own experience) may be useful as a backup for people, but without some sort of time-saving scanning/OCR and tax preparation calculations, it doesn't really solve a significant enough problem that the alternative (store them all in a shoebox and deal with it at tax time) doesn't solve just as well.
A product that people regularly interact with is a lot easier of a sell than one you use infrequently, even if the value obtained is the same. If a user logs in every day or week, then when the monthly invoice comes up, they remember you and the value you delivery. If they log in once a month or less, there's a better chance that they'll forget or be ambivalent to the value you deliver, and cancel.
One of the problems with Nodewood was that it was only really valuable to companies that hadn't started working on their product. Since it's a starter kit, if you've already started, you don't really care about it. This means that the marketing for Nodewood has to start very early, building up brand awareness with people who may eventually start a SaaS business, and will hopefully still remember you fondly at that point.