I think an avatar photo business would be a good idea. Think of all the twitter users with resized photos of themselves that are unflattering, cryptic, or just plain bad.
Hey, my friend sent me this. I have such a business. Actually, I'm a photographer and I ran a special for the month of March, $100 "blogger headshots". It's a quick 20 or so minute session. I narrow down my picks to four images. I present them to the client sized at 1000 px. Folks then had the option to buy high resolution photos for $25 each if they wanted them for something else.
Normally a headshot session with me costs $250, lasts an hour, and includes multiple locations and clothing changes. A client would receive a few dozen shots, high resolution, on a disk. This is appropriate for actors and authors picking a photo, but unnecessary for bloggers or people who just want decent avatars for linkedin, facebook, twitter, etc.
OH! You can also market this to people who need photos for online dating.
It was stunningly successful. I was able to take a slow time of year and churn out a lot of business. Because it is a special, it got written up in blogs and people Twittered it a lot.
So I say go for it! Just make sure you can deliver with quality headshots.
When I travel to SF (where the startup I work for is based), I often end up shooting headshots for folks who have talks to give, or need bio photos, etc. Someone could definitely corner the PA/SF entrepreneur headshot market, without much trouble I think.
The trick with headshots is enough finding people (close to you) willing to pay enough money to make it worthwhile. That usually means actors, authors, or executives.. but I'm sure increasingly wide-eyed young startup kids and software developers make the Bay Area an interesting target.
There was a story a while back about two guys who set up a badge printing service at SF trade shows. Something similar could be done for the headshot biz.
