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OK, I know that I rant about Moore’s Law continually. It’s the key driver of the digital age. It’s why things that seem incomprehensible get invented, and it’s why things that flopped spectacularly just a few years ago are common and successful today.

But many people – traditional journalists especially – struggle to get Moore’s Law. “Half as expensive per unit of computing power every 24 months … wha?!?”

This analogy struck me today (and, thanks, Florida, for blowing my bracket on the very first afternoon): The NCAA tournament is an example of a Moore’s Law function in action. How do you get from 64 teams to the Sweet Sixteen in just four days? Simple: The number of teams drops by half every round.

The tournament grinds down 64 teams to the final four in just eight game days.

Moore’s Law grinds down a $500,000 server to under $10,000 in a decade.

Don’t let the math equations freak you. Just know that whatever kind of entrepreneurial journalism you want to try, the hardware is cheap. And it will only get cheaper. (The software, too.)

Fear the Turtle.

I’m a member of more frequent-traveler programs than should be legal, the legacy of nearly five years on the road. So last Friday, the email box overflowed with birthday wishes from Southwest, U.S. Air, Marriott, et al.

Monday, another arrived. From Amtrak.

In other words, just like the Northeast Regional trains I used to take every week, Amtrak was late.

I’d call this irony, but it’s not – it’s precisely what I’d expect from Amtrak.

A side note to my journalist friends: Read more on the progress of GrowthSpur and our upcoming training programs here.

Hal Varian – brilliant economist, one of the few to apply the discipline to information, and all-round nice guy — got off a terrific blog post  at Google today.

I’d love to write extensively on it. But, as usual, Hal expresses his ideas far better than my pea brain can. In about 1,100 words, he manages to explain why paid content probably won’t work for most news sites; remind newsies that Google isn’t the enemy; and exhort news organizations to “experiment, experiment, experiment” for the civic good.

I know this won’t stop the incessant whinging from some quarters, or end the drumbeat of self-referential and circular thinking: “My work has value! Therefore someone should pay for it! So throw up a pay wall! Because my work has value!”

For anyone willing to explore these topics with cool detachment, a couple more facts to give Hal’s work more weight. His Information Rules, written with Scott Shapiro, is a seminal book in the field of information economics (I’ve given away several dozen copies over the years, and it’s Book No. 1  in my personal essential bibliography of information economics). And odds are if you studied microeconomics in college, you read Hal’s work there, too.

Dismiss him as some sort of biased Googler at your own peril. This is one of the finest economic minds of our age.

A side note: I’ve heard some grumbling already about Hal’s assertion that very few advertisers are attracted to hard news.

I’ll go him one better, based on too many years of sitting in Monday-morning meetings where the previous week’s ad lineage results were discussed: About the only advertisers who insisted on being close to the hard news – in the A section, as far front as possible – were major regional and national advertisers like the department stores and cell-phone companies. Some wouldn’t even pay for the ad if they were bumped back to the Local section.

The rest of the advertisers? They didn’t care, or wanted to be far away from the news:
– Car ads (buried in the back of the classifieds sections, generally)
– Real estate ads (ever notice that they’re not in the Sunday real-estate or home section? Realtors hate news that isn’t “everything’s great! Buy a house!”)
– Help-wanted ads

– Sunday free-standing inserts, tucked in the comics or some other pre-printed section
– Zoned retail ads in the Neighbors or hyperlocal sections

At most newspapers, those categories easily comprised 60 percent or more of advertising revenues in the halcyon days. Think about that: The majority of the money didn’t want to be near the news; they simply wanted the newspaper as a convenient delivery package.

Eleven years ago, I caught the break of my life: I got a one-year Knight Fellowship at Stanford. (I still find it so shocking that I rarely mention it. Friends say it usually takes at least 18 seconds before I bring it up in conversation.)

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.

Publlishing hyperlocal information? Getting some grant money for it now from a local foundation? Or running a local foundation that’s interested in doing more to improve the flow of information, especially as traditional media suffer 1,000 cuts?

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.)

I had a quick conversation the other day with someone interested in using my colleagues at GrowthSpur  to help launch his news web site. As usual, I encouraged him to charge ahead – but urged him to pick a niche, not launch a general news web site.

This goes against years of training and experience most of us have as traditional journalists: Bigger is better, right? Cover more things, get a bigger audience?

It’s hard sometimes to pull ourselves away from topics we know too well. So to understand why niche sites work so well, let’s look instead at the same issue in another industry – retailing.

Sears' logo, circa 1970

In the middle of 20^th Century, Sears was the dominant store in America. It offered most things to most people, conveniently located at almost every mall in America. Their shirts weren’t the greatest, but they had a plentiful selection. Downstairs, the hardware department had most of the tools you’d need; out in the garage, you could get a new Die-Hard and fresh tires.

Today, Sears is a mere shadow of itself – and it wasn’t dethroned by Montgomery Ward or others who tried to do the same thing, just better. Continue reading →

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?

Pete Townshend – yes, that greybeard who played at the Super Bowl the other night – has always been one of my favorite pithy writers. Don’t Get Fooled Again’s best line may be its last – “Meet the new boss/ Same as the old boss.”

In this decade of unparalleled tumult at American newspapers, that cynical line could have been the motto for publishers. Sure, there’s been lots of talk about “dealing with change” and “transforming for a digital age.” But when it came time to hire their top editors, the new bosses have looked a lot like the old ones.

That’s why Thursday’s hiring of Jeff Light at the San Diego Union-Tribune was so refreshing.

I’ve never met Light, but I’m in serious envy of his resume: Most recently the VP of interactive at the Orange County Register. An MBA from Cal-Irvine. Impeccable Capital-J credentials as a member of the Register’s I-team (Pulitzer in ’96 for fertility-clinic fraud, a couple finalists as editor).

On paper, he’s the exemplar for the sort of digital journalists who are needed to rescue what’s left of the traditional industry. I wish him enormous success in a difficult job, and applaud the new owners of the U-T for moving boldly.

Sadly, there are still too few such bold appointments.  Let’s look at the top 40 U.S. newspapers by circulation. Since the beginning of 2008 – a time by which it was clear that the Good Old Days were gone, 10 of those shops have named a new top editor.

How many of those 10 came from digital roots?

By strict definition, precisely one – my former colleague, Debby Krenek, at Newsday. Debby’s previous role was managing editor – but she ran Newsday.com as well (and for all intents and purposes controlled big chunks of Newsday.com’s business operations too).

I’ve probably just offended any number of friends, so let me add quickly: Several more of the new editors have good digital instincts. Both Gerry Kern (Chicago Tribune) and Russ Stanton (L.A. Times) were closely involved with their shops’ digital initiatives (Russ even had the cool-but-inscrutable title of “innovation editor”). And my friend Monty Cook at Baltimore out-Twitters me exponentially.  

But there’s still a difference between understanding it as part of your job and living it day to day as your entire job. Even if we give those three a mulligan, far too many of the other appointments smack of “stay the course.”

Two of the “new 10” had previously been editors in chief at other newspapers, for example. Three others had been in a variety of editing roles at the shops they took over for 15 years or more (one for 27).

 They may be terrific editors and decent people. But, symbolically, it’s hard to convince a newsroom that it must change dramatically when the top leaders haven’t been part of the digital groups that have to lead the change.

Don’t try, either, to argue that there just aren’t enough Jeff Lights out there. There’s been a significant brain drain in U.S. newspaper newsrooms in the past two years – and I’m not just talking about the layoffs of senior writers and editors.

You could populate a terrific news organizations with the digital editors who’ve left newspapers. In fact, that’s exactly what plenty of terrific news organizations have done.

There’s Kinsey Wilson, online editor at USAToday.com (and co-editor of the whole shop), who bailed to take over as senior VP and digital GM at NPR. Or Jim Brady, who banged his head against walls at the Washington Post for so long it’s a wonder he isn’t brain-dead (hmmm – might explain the Jets fixation) – and now is running Politico’s digital efforts (including their coming Washington local startup). Or Christine Montgomery, who left the St. Pete Times to become managing editor at PBS.org.

 They’re among nearly a dozen high-ranking digital journalists who have left critical leadership roles inside U.S. newspapers in the past 18 months. Their landing spots? Start-ups, major portals, the reviving digital arms of public broadcasters.

So congratulations to Jeff, and kudos to his boss, Ed Moss.

 To every other publisher, a question: Who is the best digital leader in your shop – and are you sure they were “out sick”  that Friday a couple weeks ago?

Note: My friend and former colleague Bill Day is one of the sharpest sales-side guys I ever worked with. He’s adept at dealing with traditional, agency-driven advertisers and their massive buys – and maybe even better at bundling together innovative ideas like events, direct marketing and promotions to tap revenue from people who rarely advertise with local media. Bill has sold and serviced tens of millions of dollars in print ads – and quite a bit of online revenue for me, too.

He offers this guest post, from his seller’s perspective, on the publishing-industry frenzy over Apple’s iPad.

By Bill Day

Much is being made of the iPad as a vote of confidence from Apple for traditional publishers like The New York Times.  Boosters point to the resurrection of the music industry on the backs of iTunes and the iPod.  They predict a similar resurrection for publishers with the pending release of the iPad. 

Poynter has an interesting take on the potential impact of the iPad on publisher subscription models here.  It’s  kind of like the cell phone loss-leader model – giving away flashy tech toys for long-term subscription revenue.  It’s not a terrible idea.  It just misses the point. 

What’s lost in these discussions is a firm grasp of the mechanics of revenue generation for old-line media. As in “what’s the advertising model?” Continue reading →

While I’m obsessed with digital media, the smarter part of my household focuses on the world of book publishing.

That world is agog this morning, because The World’s Largest Bookstore (registered trademark, etc.) yanked all the books published by the conglomerate MacMillan overnight.

The reason: MacMillan wants its ebooks to appear first on Apple’s iPad, not Kindle. Fine, said Amazon: We’re taking everything down then – hardcovers, paperbacks, Kindle editions.

The NYT and LAT has more details. This one will be fun to watch.

Unless, of course, you’re a MacMillan author. Ya think those screams you’re hearing from MacMillan’s authors were the intended outcome from Amazon? Why, I do too!