Evan Williams, creator of Blogger and Twitter has a great post on evaluating product ideas.

In evaluating any product idea, he says one should take seven facets of the proposed idea under consideration:

1. Tractability: How difficult will it be to launch a worthwhile version 1.0?
2. Obviousness: Is it clear why people should use it?
3. Deepness: How much value can you ultimately deliver?
4. Wideness: How many people may ultimately use it?
5. Discoverability: How will people learn about your product?
6. Monetizability: How hard will it be to extract the money?
7. Personally compelling: Do you really want it to exist in the world?

It's a long post, but well worth the read for anyone tasked with launching and evolving products.