No need to answer yes to all of them, but having 5 to 6 of these things in spades would be my criteria for doing more exploration.
Only other criteria I would add is (1) if your business and product have a substantially lower cost structure than whatever they may be replacing, and therefore can get traction at the low end of the market (not that premium never works, it's just tougher, in my experience) and (2) your product can be bought with existing institutional market processes (meaning, it does not take a lot of behavior modification for people to buy your product -- whether it be corporations who don't yet have a buyer for your category, or if it's an entirely new way to buy a category, it makes it much tougher to get traction).
My first business went against both of your points (it was a premium product and we needed to change behavior of the users). I can vouch for the fact that this is tough, and things are slow, but that business also developed the most ardent followers of anything I have done since. It takes time (which is usually a bad thing if you dont have other revenue streams keeping you afloat), but once you do it, you have a serious asset in your customers. If you want to check it out, its HoboHookah.com, we actually patented the product and recently got our claims approved (I wrote the patent myself, which isn't experience you get in an MBA program!).
You can't make guesses about how good your product is going to be, but you can make guesses about how engaged the market would be if it's successful.
The point is about knowing the difference between a Facebook app like "Where I've Been" (which is neat, but not engaging on a daily basis) and FarmVille (where daily engagement is part of the game). Or, outside of the facebook world, you've got more passion POTENTIAL if you solve problems in the world of email than if you solve problems in the world Twitter analytics.
I like this...but I think #7 rises above the rest in terms of importance. Or, at least it does for me personally.
Invariably, startups get hard, so when the going gets tough it's hard to keep on chugging along if you don't care.
This is what happened to me...I wrote about a startup I was involved with once (http://www.scottporad.com/2009/07/13/the-key-lesson-from-a-s...) where we had a good idea, but we didn't care. We ended up never even launching the product. :(
Faith seems to come from how much you "care"... Though I think success can be a huge factor here. Example: You build CRM software for Dentists and realize that you don't care about it. You go to a convention to see if anyone wants to buy it and get 2500 orders from desperate dentists who will pay $10k each. All of a sudden you care again.
I'm sure the guys are groupon aren't super excited about people getting deep savings in hair removal-- but I imagine they go to work every day pretty jazzed!
#4 is approaching the same thing from a different perspective. It's still a worthwhile question but I would put it under #1.
Also, #5 struck my attention and echoes the fact that most good "new" ideas are too contrarian for the general public to pick up on and are hardly profitable right off the bat. Some say primordial Google (search) was in this boat but Yahoo had existed since 1995 along with others, hints the next "______"s are easier for people to find because they are fed up with the old system and will type in "______" without spam/flashy ads or "_______" with such and such feature that works. People first need to know what "_______" is to search for it. A fact that spells disaster for truly revolutionary ideas.
'In short, the first mover advantage is a crock of shit'
So many people are scratching their heads trying to invent something new. Don't. Pick a market - the bigger the better and out-execute in some key area, be that design, usability, marketing etc.
