I was in a similar position last year, and ended up crashing and burning. I was working on a startup with two friends, and we had lots of ideas in a variety of areas (not all software). In the end, we decided to develop a "quick and simple" website to learn a bit about how to work together. None of us thought the website would make money, but that was OK because it was only supposed to take a few weeks. In the end, we wasted about 9 months on it before we finally decided to go our separate ways.
I'm not sure this helps you much with your situation. In retrospect we should have spent the time doing market research on some of our other ideas which might have been more commercial. Perhaps this is something you can do with your pals? Follow Steve Blank's advice from "Four Steps to the Epiphany" and start talking to your potential customers before you do much serious product development.
While I agree with steventruong that no-one can predict what will make money, there are psychological factors to consider: if you really think the idea is a waste of time, you won't fully commit to it and that might make it more likely to fail...
I'm not sure this helps you much with your situation. In retrospect we should have spent the time doing market research on some of our other ideas which might have been more commercial. Perhaps this is something you can do with your pals? Follow Steve Blank's advice from "Four Steps to the Epiphany" and start talking to your potential customers before you do much serious product development.
While I agree with steventruong that no-one can predict what will make money, there are psychological factors to consider: if you really think the idea is a waste of time, you won't fully commit to it and that might make it more likely to fail...