The way to get startup ideas is not to try to think of startup ideas. It's to look for problems, preferably problems you have yourself.
The very best startup ideas tend to have three things in common: they're something the founders themselves want, that they themselves can build, and that few others realize are worth doing. Microsoft, Apple, Yahoo, Google, and Facebook all began this way.
It sounds obvious to say you should only work on problems that exist. And yet by far the most common mistake startups make is to solve problems no one has. I made it myself. In 1995 I started a company to put art galleries online. But galleries didn't want to be online. It's not how the art business works.
When a startup launches, there have to be at least some users who really need what they're making—not just people who could see themselves using it one day, but who want it urgently.
Imagine a graph whose x axis represents all the people who might want what you're making and whose y axis represents how much they want it. If you invert the scale on the y axis, you can envision companies as holes. Google is an immense crater: hundreds of millions of people use it, and they need it a lot. A startup just starting out can't expect to excavate that much volume. So you have two choices about the shape of hole you start with. You can either dig a hole that's broad but shallow, or one that's narrow and deep, like a well.
Nearly all good startup ideas are of the second type. You don't need the narrowness of the well per se. It's depth you need; you get narrowness as a byproduct of optimizing for depth (and speed).
The narrowness of the well is only acceptable at first to get you off the ground. You need the idea to be capable of morphing into something more broad. For example, Facebook started off as a social network for Harvard students, but it was easily to expand it to other colleges, and soon enough everyone else.
It’s difficult to see whether or not a niche idea could be morphed into something big. So then how do you choose between ideas? If you’re the right sort of person, you’ll have the right sort of hunches.
A good heuristic to follow: “Live in the future, then build what’s missing”. Living in the future means that you have to be at the leading edge of some field (as a producer, or as a user). You also have to be able to build the thing that’s missing.
If you're not at the leading edge of some rapidly changing field, you can get to one. For example, anyone reasonably smart can probably get to an edge of programming (e.g. building mobile apps) in a year.
So it’s really more about noticing things rather than thinking them up. That may not have been what you wanted to hear. You may have expected recipes for coming up with startup ideas, and instead I'm telling you that the key is to have a mind that's prepared in the right way. But disappointing though it may be, this is the truth. And it is a recipe of a sort, just one that in the worst case takes a year rather than a weekend.
Just look for problems at first. Don’t ask yourself, “Could this be a big company?”. There’s time for that filter later.
To notice ideas, you have to stop taking the status quo for granted and challenge it.
The best plan may be just to keep a background process running, looking for things that seem to be missing, rather than sitting down and trying to do so deliberately.
The clash of domains is a particularly fruitful source of ideas. If you know a lot about programming and you start learning about some other field, you'll probably see problems that software could solve. So if you're a CS major and you want to start a startup, instead of taking a class on entrepreneurship you're better off taking a class on, say, genetics.
Because a good idea should seem obvious, when you have one you'll tend to feel that you're late. Don't let that deter you. It's exceptionally rare for startups to be killed by competitors—so rare that you can almost discount the possibility.
You don't need to worry about entering a "crowded market" so long as you have a thesis about what everyone else in it is overlooking. But you have to be more precise than “we’re going to make an x that doesn’t suck”.
There are two more filters you'll need to turn off if you want to notice startup ideas: the unsexy filter and the schlep filter. People don’t like boring and tedious ideas, so they become undervalued. Similarly, people shy away from things that are a schlep to deal with, like payment processing.
Being the right sort of person and solving your own problems is the organic method, and it’s the best way to come up with startup ideas. But sometimes you don’t have that luxury. You could instead use these recipes, but they’re inferior to the organic method.