Step 1: Pick something you like.
Step 2: Think of as many ways as possible to make it better, more efficient, more durable, cheaper, longer lasting et cetera.
Step 3: Which solution from step 2 are your skills or connections the best fit for?
Step 4: Figure out the least expensive way to get a prototype in front of potential customers.
Step 5: Note feedback from step 4. If necessary, incorporate it into your solution and go back to step 4.
Step 6: Profit.
(Step 7: Contribute.)

Crowd-sourced funding platforms:
Kickstarter.com: A site where users can propose projects and the public can pledge funds to them
IndieGoGo.com: A competitor to Kickstarter

Loans:
Prosper.com: Lend or borrow money at varying rates.
On Deck Capital: Small business loans

Angel Networks:
Tech Coast Angels: A southern California network. Free to pitch.
Keiretsu Forum: Networks of angels in LA, the Bay Area and the Pacific Northwest. They charge around $6000 to present to multiple regional chapters.
Maverick Angels: A network of angels in southern California. They charge $1500 to present to multiple regional chapters.
Open Angel Forum: Jason Calacanis’ free forum to pitch angels. It was catalyzed by the large fees some networks charge to pitch.
FundingPost: Events that match investors with entrepreneurs

Mentor Networks:
The Founder Institute: An international program pairing entrepreneurs with mentors over a semester long course

Pitch help:
Startup Nation Elevator Pitch: Help putting together an elevator pitch
OmniDazzle: A plugin (OSX only) that helps jazz up presentations
Prezi.com: A website that allows creating visual map presentations.
Mint.com Investor Pitch deck: An example of a great pitch deck

Document Templates:
Executive Summary: A sample from DocStoc
Term sheet templates: Y Combinator, WSGR

Events:
Startup Weekend: Conference where attendees create a new startup in 54 hours.
Twiistup: Conference that showcase a select group of startups.
The Launch Conference: Jason Calacanis’ rebirth of the TechCrunch50 event.
socaltech.com, coloft.com, and TechZulu.com all maintain calendars of SoCal events.
Others events include: Barcamp SD, Under the Radar, HackerSpaces, Caltech/MIT Venture Forum and UCLA Entrepreneurs Conference

General:
Help a Starup Out: List of resources for startups.
Startup Digest: emails about startups in your area
TheFunded.com: A site for entrepreneurs to share experiences with funding sources

Twitter:
VentureHacks: Advice for startups from some of the investors in Twitter. Their AngelList is a great resource too.
Mark Suster: Los Angeles VC looking for passionate entrepreneurs

Inspiration
Beautiful video created by Grasshopper.com