Last on the list, but probably the first question I ask myself is: How important to me is it that this product exists in the world? If I were evaluating a startup, I'd ask this of the founders.
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In theory, you can get around this with lots of user research. (It's pretty clear neither Slide nor Rockyou's founders are creating widgets based on their own needs and desires.) But you're more likely to get it wrong that way. When I've gone sideways, it's when I wasn't listening to my gut on this issue. Specifically, Blogger and Twitter were personally compelling, while Odeo wasn't.
Clearly, you're better suited to build a best-of-breed product if you're intimately familiar with the space and "scratching your own itch".
But perhaps more importantly, I think what Evan gets at is passion. Building a product and a company is hard. If the end result is not personally compelling, are you going to have the resolve to get through the dips? (And since you're probably going to run into road blocks, the end result needs to be more compelling than just the possibility you might be rich).
I truly believe the best products and companies come from passionate people. You may or may not be the expert in the space today, but if you don't feel passionately about solving that problem you're going to have a long road ahead of you.