Start with an idea, a "What if?" For Shock Point, the what if was, "What if a good girl got sent to a bad boot camp in Mexico?" For my next book, the what if is "What if a girl went undercover with the Environmental Liberation Front?" For the book I'm just starting, the what if is "What if a blind girl was in the back seat of a car that was stolen - and the thief didn't notice her until he was already driving off?"
Many what ifs come from real life. In real life, pretty good kids did get sent to places like Peaceful Cove, only they were called Tranquility Bay or other innocuous names. ELF did have an informant inside. Thirty miles from here, a blind girl was in a car when her mom ran an errand and left the keys in the car - and the car thief didn't notice her until he had driven about a block.
Once you have your idea, you add onto it. If your idea was grounded in reality, now is the time to make it your own. For example, the bind girl was force out at a Jack in a Box. But what if the car thief had panicked and kept her? Now is the time to brainstorm, to add in other ideas, to look through all those pages you have torn out of magazines and newspapers and decide if any of them can lead to subplots or other characters. (You should be doing this. Even photos of people who catch your eye are good.)
You also need to get to know your characters. Who should be your point of view character or characters? What are they like? Think of situations that would arouse the most emotion in them? What if one of them was an uptight bachelor who hated mess and noise? What would happen to him if he became the center of attention at a five-year-old's birthday party? Put your characters into situations that are going to bring out strong emotions.
Brainstorm lots of possiblities, then narrow it down to the best ones. Once you have a what if, some characters, and an idea of where it is going, you can start. You can either plot your whole book out from beginning to end or write each day and see where it takes you. I have done both and written good books using both. Once you are published, it's mroe likely you will sell books on outlines, so that will force you to use that method.
Your reader is going to want things to be as bad as possible for as long as possible. This is true for many different genres, not just mysteries.
You should use your own experiences. Only you know what it's like to work at Pietros Pizza, to be an artist model, to jump out of a cake, to have $7 to last you ten days. (These are all things that have happened to me, and I've used most of them in books.) Interview other people about their experiences, too. A long time ago I started a book from the point of a view of a middle-aged Southern divorced guy. Why? Because I had heard a fascinating story about middle-aged Southern identical twins, and one of them ended up completely paralyzed and in a nursing home. I knew nothing about what it would be like to be such a man (and I think it's the exceptional author who can portray a member of the opposite sex for an entire book). What I should have done was either talked to people like my character, or recast him as a different person that I could more easily have understood. When you interview people, they can give you details about their jobs or lives that you would never have come across in reading.