There’s been the usual grumbling about the heartless bastards at corporate, at how these cuts will only further diminish our Noble Religious Calling, etc. – but the reality is these cuts are only going to continue in traditional media.

The financial numbers are awful: Print ad revenue at publicly reporting companies keeps going down, down, down.  Revenue is off by half since the 2006 peak, and has dropped for 20 straight quarters.

And it’s not the economy, stupid (sorry, Carville). Digital ad revenues at most shops continue to grow and the overall interactive ad economy grew by an astounding 23 percent in Q1 vs. the same period in 2010. Does anyone need more proof that the long-predicted seismic shift in ad-spending patterns has happened? Does anyone really think the financial picture will automagically improve? Buehler?

So: what should my newly unemployed friends do?

My erstwhile colleague Mark Potts offered sage advice in this neatly packaged 2009 blog post: 10 Tips for Suddenly Unemployed Journalists.  Some of my former colleagues must have already read it: The LinkedIn tip is No. 5.

I would add only a couple additional thoughts:

1) Start on all of Mark’s tips now – before the Reaper comes.

2) Keep backup files of everything – beat notes, your story ideas and especially your Rolodex. I know too many people whose employers locked their access to their email accounts the moment the layoffs took effect, and who suddenly lost years of carefully organized contact information. (My bosses were kind enough to extract it from Outlook for me. As a printout. Um, thanks.)

3) Get digital. Now. To paraphrase a delicious job-interview story,* there are two kinds of journalists these days: digital ones, and unemployed ones. Start a Tumblr blog, follow Andy Carvin to see  how Twitter can be used as a reporting tool, join ONA – just get in the damn pool.

The future of new is being invented right now, and plenty of traditional journalists are part of it.

But most of them aren’t at their traditional organizations anymore.

*OK, so that’s far from the most-elegant line I’ve ever written. But it gives me an excuse to tell a great story.

Years ago, just before the Great Collapse, a hot-shot job candidate was interviewing with the interactive corporate staff at the place I worked. She was an articulate, high energy MBA from a seriously good business school, and she totally nailed every interview. The team wanted to hire her quite desperately.

So in one of the final meetings in the process, our uber-boss makes an effort to impress her. He looks across the table, and intones in his most sophisticated and leaderly air: “You know, we’re in the process of turning this place into a digital media company.”

The candidate, who by that time had clearly and correctly decided that we were doomed, snapped back: “That’s good – because in about five years, there are going to be only two kinds of media companies: Digital ones, and dead ones.”

We set out to be intentionally provocative, because Bill and I have seen too many great ideas for projects and products turn into smoldering wreckage because of miscommunication between journalists and business folks. (OK, and partly because Bill and I just like being provocative.)

So we taught it as if it were a master’s level business-school class. We used case studies about interesting media start-ups. We taught the ABCs of financial statements (yes: We made journalists look at numbers) and the grandular details of different revenue models. And we required every student to pitch a sustainable news-and-information venture.

We heard some terrific ideas. But as Tom O’Malia*, a serial entrepreneur and director emeritus of the Lloyd Grief Center for Entrepreneurial Studies at USC,  reminds anyone who will listen: Ideas are cheap.

Entrepreneurial ideas are only useful if they can be refined into a workable business concept – one that has real, paying customers, and delivers clear value to those customers.

Tricky distinction, especially for reporters.

No, your audience is usually not a paying customer. (We won’t get into the tiresome paid-content discussion here – but even at newspapers and magazines, subscription fees from the audience are a small portion of revenues, and an even tinier portion of the profits. The real paying customers are the advertisers.)

We were gratified at how quickly the group caught on.

Many of the ideas were terrific, and got only better by the final pitch session. We’re going to be intentionally vague about the specifics – several folks are still working on their ideas with an eye towards actually executing them in the real world. Suffice to say our interest was piqued by proposals to:

• Mine rich internal archives of entertainment reviews at a major media company
• Connect reporters and people who have compelling information to, um, share. (“Leak” is such a loaded word, wouldn’t you agree?)
• Attack a classified-advertising niche that has largely – and strangely – been left untouched. So far, anyway.

Great. But you know what was even better?

The weak ideas – the ones that started life as “Hey, kids! Let’s put on a website!” (All credit to Mark Potts for that line.)

Over just two months, those weak ideas got better. From vague beginnings emerged sharp proposals to create:

• A unique alliance around a hyperlocal site to provide modest, yet stable, funding that doesn’t rely on local ad dollars.
• Community and hobby-driven sites that focus on narrow, but attractive, niches. (All I’ll say about one of those niches: The hobbyists scraped together $15 million to construct a building for their pastime?!? That’s a niche I’d like to capture.)
• A clever blending of non-profit status, cheap technology and Internet cafes to support women in West Africa.

The point here is not that all of these ideas will work. Perhaps none will.

The point is that 18 young people – hard-core traditionalists, inexperienced cubs, even some NGO and government types – innovated. They combined creativity, perseverance and some basic business principles to develop concepts that are worth testing in the marketplace.

And therein lies the future of journalism: Smaller, nimbler, more creative.

*(As an aside: Bill and I owe a huge debt to Tom for graciously sharing his curriculum and research.)

I spoke a bit about emerging business models to support these kinds of sites (and – plug warning – the work of my partners at GrowthSpur).

You should search on Twitter for the #ONAUAB hash for some of the fascinating discussions that grew out of the sessions. Less fascinating, perhaps, was my presentation – but for those who asked for it, it’s here.

(Why, yes – I used Prezi. My friend Tim Windsor snarks that Prezi screams 2009 the same way a Yamaha DX7 synthesizer screams 1983. But, hey, I liked a-ha.)

Also: Here’s Robert Hernandez‘s excellent presentation on how journalists can use social media tools (both to build audience, and to be better reporters).

And @DannySanchez’s informative riff on free tools doesn’t have a perfect online analog – but he writes about nearly all of those tools (and even more) on his blog, Journalistopia.com.

As part of the prep work, I’ve re-read a hefty stack of posts about emerging revenue models for news – advertising-supported for-profits, L3Cs, non-profit structures, even the wishful-thinking paid-content model.

Running through many of the pieces was an irksome thread: A focus on single solutions. Most framed the discussion in terms of “what’s the source of revenue,” as if there were a magic bullet that can solve every operation’s money woes.

There isn’t, of course. What’s more important, though, is there never has been. In times like these, naiveté isn’t charming – and for entrepreneurial journalists, it can be downright dangerous.

No successful news media organization has ever relied solely on a single source of revenue. In fact, the most successful industry segments – newspapers, magazines and broadcast stations – have long had many revenue sources, almost too many to list.

There’s more elaboration – and a rough list of the different sources — in this deck.

Key takeaways:

-  Don’t think too broadly. Even something as seemingly straightforward as “advertising” isn’t a single source of revenue. There are myriad advertising products – each with distinct strengths and weaknesses, sets of customers and sales models.

- As you plan the revenue models for your own proto-business (that’s what start-up journalism sites are, folks), copy the best of traditional organizations. Find multiple streams of revenue.

(Lest this come off as too scolding: I think it’s fantastic to see journalists actually interested in this sort of question. For decades, most of us acted as if the money that powered our organizations was created by magic. Worse, some assumed that it was the result of their brilliant journalism. For a welcome example of incisive, if tardy, analysis, see James Fallows’ terrific Atlantic piece on Google and the news industry.)

(Oh – and that jokey lead about hardware stores? Not a joke. I’m so bad that the Fabulous Sue Corbett (trademark pending) jabbed me in a one-act play about Noah’s Ark she wrote for a youth group.

Scene: Noah’s sons talking after God commands their father to build an ark:

Son 1:  You know what this means?

Son 2: Dad has to make a trip to the hardware store.

I’m unabashed about how grateful I am to the program – whatever I’ve achieved in the past 10 years of my career is due solely to what I learned on that fellowship.  Jim Bettinger and Dawn Garcia are to be commended for dramatically shifting the program’s focus to address the radical changes facing our industry.

Until two years ago, the program operated much like the Nieman Fellowships at Harvard, or the Knight-Wallace program at Michigan: Pitch us an idea that will make you a better journalist. It might be Internet economics (my topic); it might be studying the narrative form of American musical theater.

Stanford has unique qualities, however – it’s a world-class university in the heart of Silicon Valley, a place that has consistently spawned great companies.  Now the Knight program asks applicants to submit ideas that “focus on innovation, entrepreneurship and leadership to foster high quality journalism during a time of profound transformation.”

For several years, I’ve gotten to peek at the stack of ideas as one of several former fellows who help the program staff screen applications (nearly 150 U.S. applications for the 2010-11 class). We completed that initial screening last week. There’s still a lengthy process of interviews and review by the program committee before next year’s fellows are announced in April.

Still, there are several useful lessons in this year’s stack, applicable not only to future Knights, but to anyone who aspires to entrepreneurial journalism. (All opinions are my own, of course, not those of the program.):

What was great:

•  A “just do it” attitude: Personally, I loved the people whose proposals (and, usually, their current work) showed a bias to action. They launch stuff knowing it isn’t perfect, then adjust based on the audience reaction. That’s a far cry from the attitude most of us developed in the days of monopoly outlets. (I remember an editor screaming at us we should never experiment on our readers. Sounds reasonable – but in practice, it meants we never tried anything new.) A thousand start-ups are experimenting out there – and an axiom of the startup world is that with enough experiments, someone will figure out what works.
• Awareness of the trends in technology. You don’t need to be a technologist to get a fellowship – but it sure helps to know broad trends in technology, especially as they affect journalism.  The best applicants understood that cheap tech gives anyone the ability to publish; and that it’s getting easier by the day to organize and display vast pools of raw data.
• It’s not just about the World Wide Web anymore. (Doesn’t the very phrase “World Wide Web” sound archaic?) Several applicants noted that publishers need to deliver information when, where and how consumers want it – and increasingly, that means mobile devices. The best name-checked the iPad specifically.
• Recognition that Stanford is a candy store of knowledge. The best went out of their way to discover the particular professors, classes and research going on at Stanford related to the applicant’s idea. (Hint: If you’re thinking of applying for a fellowship anywhere in the future, write that one down.)

What wasn’t so great:

• Applicants who focused their proposals on “saving newspapers as we know them,” rather than saving journalism. There’s a difference.
• Those who acted as if the fellowship is a lifetime achievement award: “I’ve done this and this and this – so someone somewhere owes me a sabbatical.”
• A corollary: “I need a year off to learn all this new, foreign digital stuff.” Stanford is a marvelous place to learn about the interplay of technology and storytelling – but basic knowledge can be acquired anywhere. Start with the people on the digital side of your current or former shop.  And don’t make the mistake of implying that they’re not journalists because they sometimes hold different opinions than you. (Someone did that in a fellowship application a year ago. Guess what? They didn’t get a fellowship.)
• “At the end of the year, I’ll have produced a report.” To steal a line from my former colleague Chris Krewson: The future of journalism isn’t going to be invented at a conference. Studies are helpful, of course – but only when they lead to actual publications that can be tested in the marketplace.

Best of luck to the Knight class of 2011. I’m insanely jealous of you all.

Here’s a chance to double down – and also gain access to significant training, guidance and knowledge.

The Knight Foundation, which is probably doing more to help journalism through this tumultuous period than any traditional media company, is coming up on the deadline for another round of its Knight Community Information Challenge. Note that this program is separate from the Knight News Challenge, which is about funding innovative ideas.

The FAQs are make clear the requirements. An added benefit (besides the dough): Registration is still open for the introductory Media Learning Seminar in Miami March 1-2. (If you go, and have never seen Amy Webb do her thing: Try not to let your jaw hurt anyone on its way to the floor.)

Moreover, there’s a chance to get answers to any questions you have about the program. The fine folks at the Knight Digital Media Center at USC and Cal-Berkeley are hosting a web-based Q&A on Feb. 26.

Journopreneurs: This can be a terrific start to your hyperlocal site – if you can partner quickly with a community foundation willing to match any Knight Foundation funds. But before you get all giddy, think about sustainability! If you get this money, what are you going to do make sure you can generate real money at the end of the grant? (Hint: “Apply for another grant” is not an acceptable answer.)

Dave Morgan

I’ve written before about how Moore’s Law  and its corrolaries in the software world inexorably make web tech cheaper and simpler by the year. But don’t take my word for it. A comment and a software release last week make the point better than I can.

Serial entrepreneur Dave Morgan dropped an offhand comment during his talk at the Borrell Local Online Advertising Conference  in New York last week.

His first startup, Real Media, needed tens of millions in capital when it was started in 1995 just to cover technology costs.  His next, Tacoda Systems, needed single-digit millions to get launched in 2001.

His latest, Simulmedia, founded last year? About a million.

There’s a lesson in there for journalist/entrepreneurs – and it isn’t that you need a million bucks to do something.

“The cost of  building out a massive data storage capacity for ad targeting has dropped enormously because of much cheaper, much more powerful hardware, cheap data centers, open source software (Hadoop & MySQL) v. classic DB (Oracle, etc.),” Dave wrote in a follow-up email.

Moore’s Law in action: The cost of a major tech startup has dropped by almost 100x in 15 years.

 (For those of you who don’t follow ad-tech startups as closely as the Mets, a couple bits of data: Real Media merged with a couple others to form 24/7 Real Media, which was eventually bought by ad-agency conglomerate WPP for $649 million. Tacoda was bought by AOL for $275 million. Dave knows how to make this stuff work.)

Let’s take those forces out of the realm of VC-backed startups, and instead look at the world of independent journalism sites. Their technology needs are merely a fraction of massive advertising analysis companies – and so are the start-up costs.

The radical downward trend of those startup costs follows the same downward spiral, however. A few years ago, you needed a million bucks to get solid, automated content management. Today? Close to free.

I’m an unabashed fan of the blog platform WordPress, and of the easily customized themes produced by many different developers. Even a year ago, getting WordPress to do what you wanted it often required some code tweaks – simpler than building from scratch, but still not for the uninitiated.

Now? One of my favorite development houses, WooThemes, launched a highly customizable theme, appropriately named Canvas, this week. Want to change your site’s look and feel, dramatically? Punch size and color changes into simple menus. Beats opening the underlying PHP code.

One more reason journopreneurs should stop pondering and just launch. So a question, and a challenge, for those still pondering:

What’s stopping you?

We think journopreneurs – and people who just want to operate great local sites, whether or not they claim the “j” word – are one of the key parts of the emerging local information landscape. If you’re interested, drop a note to Mark Potts or to me.

Then came the thud: She’s already hired someone to take care of all the technology and design. For only $5,000. And she’s thinking like a businessperson – she bargained him down to that.

I joked about this a little the other day. But, really, it’s not funny.

Journopreneurs have a tough enough time doing all the things they need to do to launch a site, and figure out how to make a living at it. I want to scream when I see people so intimidated by Technology (cue dread-inspiring music) that they blow cash they could use on freelancers, marketing and another month’s mortgage payment.

I don’t blame the design and tech shops – they have a tough life, too. But if you want to be a hyperlocal or niche-site operator, learn the about technology. You don’t have to write code (God knows I don’t) – but you at least need to understand enough to know you don’t spend $5,000 on something you could easily do for $500.

I offer some-more practical advice – not just more harrumphing – over on the GrowthSpur blog. (Fair warning: There’s a pitch in there for GrowthSpur’s partnership services.)