1) Idea
2) Write a small paragraph explaining the idea
3) Derive features
4) Make todo list
5) Make mockups using mockingbird (awesome tool)
6) Write some code
7) Get bored and go back to 1) (not recommended)
Between 5 and 6 It should be better to work on the design rather than code. Code should be last imo. Also I hope someone could erase step7 and actually launch the product :)
I'm generally driven by seeing something working, even if it's only working enough that I can see some data on a page or have a single button that makes something happen.
If I can keep a good decoupling between my views and my models it's pretty easy to go back whenever I get the itch and make things look nicer without touching anything else. Unless you have a lot of javascript doing intense dom operations on a page you should be able to redesign it at will without worrying about breaking anything else, so I don't really worry about getting it right the first time, or really any time unless I'm getting ready to show it someone who's going to judge it on visual rather than functional grounds.
I've found (and, again, this may only apply to me and not you) that leaving design for later helps keep me from getting bogged down in details and losing my steam. If I have a very concrete picture of how something should look in my head I start worrying about getting my boxes to line up right and why my line heights are off and all that stuff that doesn't actually contribute to getting anything working. If I've purposely left the design aside I've in essence given myself permission to be okay with things looking crappy until I feel like fixing it, which helps keep me going on things that actually contribute to working code.
If you have a design which looks awesome, at least for me, I have greater motivation to get it work. The more detailed and comprehensive the design is, the more eager I am to make it work.
But again, this is what works for projects I've done for clients. Personally I don't have any good finished projects, none of the methods I tried worked there.