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In my opinion, people should stop trying to guess what solves other peoples problems and just solve their own.

Best(er): Make something YOU need and are willing to pay for now.

If you solve your own problem, you're guaranteed to understand the problem, execute well, and be surprised how many other people have the same problem.

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That's exactly what I'm banking on with the new app I'm developing http://www.mightycv.com. I needed a new résumé and didn't like the more generic builders I found out their. I wanted a résumé builder that worked for hackers and integrated easily with HN, github and stackoverflow and so I built one. I really hope that by scratching my own itch I've executed well and made something that others will find useful.

If there's lot's of competition in a particular area then I think it might be a better plan to focus on a niche part of that larger market. Remember facebook was only for college kids to start with.

That way you get two hundred java IDE's.too much competition.

Better: connect your knowledge of creating , with the knowledge of a domain expert who knows the problem well.

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