I typically review the major players and the industry and look at what they aren't doing well, or aren't doing at all. Those gaps are the best opportunities.
After that, I'll do research into how much a potential revenue / profit is happening within that industry. I'm essentially trying to determine if the gap is a large enough opportunity to pursue for the potential money it could generate.
Once I know that, it is one to researching the major demographics that are interested in those types of products and services. I can help narrow my target users as well as find out what is currently frustrating and delighting them.