How do you know when you should listen to a hunch?
I've been trying to work my way through Michael Polanyi's Personal Knowledge. It's a good read, but often makes my brain hurt! Anyway, Polanyi had a very interesting way of thinking about discovery and hunches. I've barely got my mind wrapped around some of his ideas, so consider this a preliminary lesson from Personal Knowledge and conversations about Personal Knowledge with my work colleagues.
In short, I think we should investigate our hunches when we have personal knowledge about something. I don't know anything about art, so if I view a work of art and have a hunch that something is fishy about it, it's probably not a good use of my resources to invest in my hunch. However, if you've read the book Blink, the introduction tells a story about a "Statue that Didn't Look Right." The art experts couldn't even articulate why they thought the statue wasn't an original. Those with deep knowledge about art had an instinct that something was wrong with it. In the end, the statue wasn't an original.
With all that said, principled entrepreneurs don't blindly follow hunches even when they do have deep personal knowledge of the subject. I think personal knowledge increases the likelihood that a hunch is right, but we still have to use economic and critical thinking skills, be disciplined and make sure the risk is appropriate when investigating our hunches.