How to Pick Which Idea to Pursue

I have had to cut back on my posts, as my University of Texas tasks (teaching a class in entrepreneurship, giving lectures on business history, and, most importantly, counseling present and future entrepreneurs) have kept me very busy.
One thing we have just covered in my class is, “How to select an idea when you have too many?” This is a common problem for the deeply entrepreneurial, those folks who are highly curious and observant.
First, it is important that go through the spreading process before you go through the funneling process. In short, if you have two or three ideas, trying to increase that count. Spread out your thinking. Make a diagram that looks like a broom without the handle, like an upside down V, narrow at the top and wide at the bottom. So you start with a few ideas and end up with a lot more. They can be related or unrelated ideas. 
Even if you have one idea you are hot on, take the time to think through all the variations on that idea that might work. If you think you want to open a shoe store, what about an online shoe store? What about a shoe and jewelry store? What about a shoe department in someone else’s store? The idea here is not to cut off your browsing and grazing too early. 
Think in big, expansive, diverse ways. Brainstorm!
Then comes the narrowing process, in which you go down a regular V, proceeding from a lot of ideas at the top to just one idea at the bottom, the one idea you are going to move ahead on.
I think you need to look at three things in deciding which idea to “run with.”
1.     Are you passionate about this? Do you love the idea so much you are willing to put in the required long hours, do the hard research, become an industry expert, read a lot, talk to a lot of people, and love every minute of it? If you find yourself getting bored, dreading the work, or watching the clock, this probably is not the right idea to be working on.
2.     Does the world really need or want this? Is there a real human need it will fill, a pain it will solve? It can be a huge idea like bringing water to poor African villages or it may just be a better shoulder bag. It doesn’t do anyone any good if you need it but no one else does. This does not necessarily mean that people know they need it. The story goes that had Henry Ford “given the customer what they wanted,” he would have created a “faster horse.” But careful study and observation, always talking to customers and learning about their lives in a holistic way, can lead you to understand whether there is a need for what you want to offer. And this need must be one that is not already met, at least not met in the same places or in the same ways you are planning to offer.
3.     What are the economics? The numbers? How much demand is there for this good or service, is that demand growing, how much investment will it take, can you sell it for more than you pay for it? What are the revenue streams and who will pay for it? Can you make a reasonable return on your investment of time, energy, and money? This does not mean you have to make a high return on investment, or meet someone else’s expectations, unless you involve them or their money in your project!
While many of my friends first focus on point #3, I initially focus on the first two. I believe passion and need are roughly equally important, and absolutely required in order to succeed. If you find something that you really love, that people really need, then there is likely a way to figure out how to make the economics work. You have to strive to be the one to figure it out, because if you don’t, maybe someone else will!
Many times you have to work on answering all three questions side by side as you proceed through the selection process. In other words, you may not be sure whether anyone else is offering your brilliant website idea, so you should find that out while you weigh your passion and work on the economics. If you have a great idea but there is no way you believe you can raise the required one hundred million dollars, that one might come off your list as soon as you find out the hundred million figure.
Each of the three steps requires serious work and research.  Even assessing your own passion, knowing yourself well, is not something that comes automatically to most people. Beyond that, great entrepreneurs are great researchers, striving to be “industry experts” and using all the learning methods at their disposal (see