It is a personal record. Very much on the honor system. It is used during interviews as a culling criterion. Must meet certain minimum hours and so on.
Would you care to help me build an app as j* suggests?
Suggestion: After you have a reasonable facsimile of a working log for pilots (if you choose to go this route), consider generalizing/expanding for scuba divers - Same kind of honor-system log-book for dives performed. I would imagine there are other disciplines that would benefit, as well...
I was about to suggest mountain climbers. I use some of the services on summitpost (climbers logs etc). The site has a vast amount of information, but it's backend is garbage. I routinely use google to extract information out of the site.
The quickest path to some income would seem to be to find a co-founder that has the exact skills that you need, together you should be able to go from concept to working prototype in a couple of weeks.
Sound out your pilot buddies if they want to be your 'pilot' ;) customers.