I don't look for niches or products first, nor do I build a site without something already in mind. I prefer to find the market first; a crowd of starving people, and give them what they want... solutions to problems.
There are clues all around you if you'll just look. Look and listen. What problems do you see or hear that people want solved? Once you know the problem, find a solution and you're golden.
People magnets are good, too. Imagine what you could do with one good idea. What if you were the Manolo and made
http://shoeblogs.com/ or if you were Lori Deschene and made
http://www.tinybuddha.com/ or Jason Whatshisname and masqueraded as the Salty Droid
http://www.saltydroid.info/? (well, Jason doesn't even try to earn money off the Droid) I'm thinking you'd be in a pretty good position to be rolling in the dough.
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