Ok it would clearly help to tell what the idea is. So what I am building currently is an engine and a commercial level software on top of it to automate the checking of stylistic consistency in a document. The application of it is pretty broad but to sum it up into a few points 1) Plagiarism detection in education. It can be used as a means to detect plagiarism of individuals outsourcing their documents (thesis) thro…
There are people on HN that are more qualified to talk about this than I am because they have more experience with selling in those markets, but this is what I understand:
You can't sell to either without a strong salesforce. These are not the sort of environments where you get paid a lot for technology just because someone discovered it while browsing the web - sure there might be one-two professors, and one-two judges, but most will expect their departmental machinery to take care of this stuff for them. The essence of the problem is that the people who are interested in using the product are different from the people who hold the purse strings, and both of those are different from the people who actually oversee the cycle of purchasing and procurement.
So, in a certain sense, your advisor is completely correct. You could really make big bucks selling this. However, in order to get there, you would either have to learn the microstructure of sales cycles and handle that all by yourself, or you'd have to partner up with someone who understands that and knows how to operate in it. Whether you want to give that a shot is completely up to you. It could be a very valuable experience.
Remember, there are a lot of problems with going open-source as well. First of all, you think "wow, I released this piece of software, awesome, now people around the world are going to gather together, hack on it and send me patches". That rarely happens. What often happens is, you end up getting requests for free tech support and bug fixes, and the usual comment of "well, it's open source, you could help me hack it" is met with a dismissive comment. In other words, once you go open-source, there's still a lot of management that you have to do in order to steer the product in the right direction, except now you aren't getting paid for it. Open-source really is a labor of love - and I don't mean loving your beautiful, smart and gifted children - I mean loving your developmentally disabled, Down-syndrome, wheelchair-bound children.
So, my advice would be, don't go open source in the beginning, and try the "build a company out of this" a shot for six months or something. Expect that in six months it will go nowhere and you can open-source it then, and see whether once you open-source it, it gets a different kind of pickup, and maybe you can still build a different company out of it then.