My friend and former colleague Bill Day and I just finished a great six-week course in entrepreneurial journalism for 18 graduate students in American University’s Interactive Journalism master’s program.

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.)

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.

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?