Y Combinator Funding Application

Winter 2010
Application deadline: 10 pm (PST) October 26, 2009.
Please try to answer each question in less than 120 words.
We look at online demos only for the most promising applications, so don't skimp on the
application because you're relying on a good demo.
We do usually look at the video. Submitting one greatly improves your chances.
Though we don't make any formal promise about secrecy, we will try to avoid disclosing
your plans to potential competitors.
We recommend you save regularly by clicking on the update button at the bottom of this
page. Otherwise you may lose work if we restart the server.
Your YC username:
lloydarmbrust
Company name:
Seeing Interactive, Inc.
Company url, if any:
http://seeinginteractive.com/

YC usernames of all founders, including you, lloydarmbrust, separated by spaces.

(That's usernames, not given names: "bksmith," not "Bob Smith." If the startup
has 3 founders, there should be 3 words in this answer.)
lloydarmbrust jnovek
YC usernames of all founders, including you, lloydarmbrust, who will live in the
Bay Area January through March if we fund you. (Again, that's usernames, not
given names.)
lloydarmbrust jnovek
What is your company going to make?
A local business directory sold through small-town newspapers. The goal is to integrate
hyper-local community and business information into a format that users can trust in their
small towns.
The directory will be branded as the newspaper's own, allowing businesses to update their
information, add photos, news, and daily specials. Consumers will be able to comment and
review. Eventually businesses will be able to pick a domain name and template to have a
full-fledged website with the ability to sell their products on the internet. Think the Yellow
pages plus Yahoo! Merchant Solutions divided by Angie's List.

By leveraging trust that small newspapers have with their local advertisers we will create a
nationwide network of businesses that feels local.

Meanwhile, we automate and streamline every news-delivery task that we possibly

can. The eventual goal is to create an all-encompassing online suite of tools for small
newspapers: we won't be happy until small, ailing newspapers are able to cut their
workforce by 30%. Eventually we will provide the tools necessary to abandon print media
altogether.

If this application is a response to a YC RFS, which one?

1
For each founder, please list: YC username; name; age; year, school, degree
and subject for each degree; email address; personal url (if any); and present
employer and title (if any). Put unfinished degrees in parens. List the main contact
first. Separate founders with blank lines. Put an asterisk before the name of
anyone not able to move to the Bay Area.
lloydarmbrust; Lloyd Armbrust; 28; 2006, York College, B.A. English;
lloyd.armbrust@gmail.com; lloydmedia.com; and The Texas A&M University System and
Web Developer. jnovek; Jason Novek; 27; 2006, University of Minnesota Duluth, B.S.
Computer Science, B.S. Mathematics; jnovek@gmail.com; http://www.jnovek.com/; and
Seeing Interactive and CTO.

Please tell us in one or two sentences about something impressive that each
founder has built or achieved.
While running the web department for a small daily newspaper, lloydarmbrust grew pageview traffic by 850% and revenue by 400%--during that process he built a web presence
that won several national awards and accomplished goals that he was told would never work
at a small-town newspaper.
Nine months after starting his first job, jnovek had to ask his boss for a new set of
responsibilities because he had replaced his entire daily routine with a collection of cron jobs
and shell scripts.
Please tell us about the time you, lloydarmbrust, most successfully hacked some
(non-computer) system to your advantage.
Our very first customer wanted a contract. This customer is notoriously picky about
contract terms, and a bolierplate off the internet wouldn't work. We had just spent about
$3k on the incorporation process, and didn't want to drop another $2k on additional lawyer
fees.
Instead, I spent twelve hours scouring the web for example web-service agreements,
random contracts, and a few forms purchased from Legal Zoom. It turns out that lawyers
use code just like hackers -- it felt a bit like learning PHP. Being an English major at heart,
it was actually pretty fun.
At the end I had a 15-page contract. I paid the lawyer $300 to look it over, he
said: "Nice. Well written. Where'd you get it?"

Please tell us about an interesting project, preferably outside of class or work,

that two or more of you created together. Include urls if possible.

High school produces much that is sub-impressive. One result for us, now 12 years in the
running, was the creation of an international holiday. Mind you, it is only celebrated by
about 100 people--but we have met people outside of our influence, and even from other
countries, who celebrate the day.
Observed on Dec. 27th and known as the "twenty-seventh" or "the new day". We created
the day in response to the nonsensical notion of people being over-excited about the new
year, when in fact it is just another day. Festivities include your standard revelry on the
evening of Dec. 26th, followed by the collective singing of Louis Armstrong's rendition
of "What a Wonderful World" to bring in the day.
How long have the founders known one another and how did you meet? Have any
of the founders not met in person?
14 years and we met in high school. Lloyd is a Libra and Jason Pisces--we both enjoy long
walks on the beach, and the gentle sound of the mandolin.
What's new about what you're doing? What are people forced to do now because
what you plan to make doesn't exist yet?
Newspapers have been operating under a failed business model for 10 years.
We're rebuilding newspapers by creating profitable web products and optimizing their sales
process with online tools. This both makes money and cuts costs. What's novel is that
we're saving the newspaper for their relationships with millions of local businesses, and
showing them how to make money again.
What are newspapers doing without us? They are dying: http://
www.newspaperdeathwatch.com/ and that doesn't include weeklies. Our products make
newspapers money and bring local communities together.
What do you understand about your business that other companies in it just don't
get?
While everyone else writes off small newspapers as dead, we think that their tight-knit
relationships with local businesses make them worth saving.
Although Google, Yahoo!, and Facebook are big players in advertising none of them have
been able to forge relationships with small-town businesses in a big way. Those companies
all seem less trustworthy to consumers and less memorable to small business owners than
the local paper.
We take the trust that newspapers have earned with local businesses and use it to sell those
businesses our web services.
Who are your competitors, and who might become competitors? Who do you fear
most?
Not Google or Yahoo. They've both tried to partner with newspapers, and never thought big
enough. Facebook is a definite possibility: their biggest growth right now is coming from
baby boomers. Thankfully Facebook hasn't figured out how a local online community should
look, as they seem to think that business information should be displayed in the same way
as profile information.

Like many YC applicants, we're most worried about other start-ups. Right now there are
other start-ups working on this problem -- and they're not married, have no social life, and
have been doing it for a lot longer.
How will you make money?
We are already making money. Our current product grosses several thousand dollars per
month in revenue.
Our most immediate source of revenue is direct from newspapers. Each newspaper pays us
between several hundred and several thousand dollars for services. In the future, we will
also present products directly to small businesses through newspaper ad reps in a tiered
pricing scheme.
For example, the local directory product that we are currently developing will sell directly to
businesses for between $20 and $200 per month and we get a cut. The customers who are
buying these services are accustomed to paying $40 just to place business-card sized ads in
the paper once a week, so if they are interested in marketing via the internet, this purchase
should be a no-brainer. Really though, it doesn't matter what we charge: $n 6,000,000
small-business is a number we can live with.
If you've already started working on it, how long have you been working and how
many lines of code (if applicable) have you written?
7 months and 2834 lines of Ruby, SQL and sh, plus a large but uncounted volume of HTML
templates.
If you have an online demo, what's the url? (Please don't password protect it; just
use an obscure url.)
Our first product was a print-to-web conversion system that immediately generates revenue
for small newspapers: http://newspaperdemo.com
We are currently working on our next product, which is an online directory system. We do
not have a demo for that right now, but we will by the time YC interviews roll around.
How long will it take before you have a prototype? A beta? A version you can
charge for?
Our first product is nearly ramen profitable. Although our current product is in a market
that is rapidly losing value -- print to web ad conversion -- it still helps us build relationships
with these newspapers and makes them money (adds about 5% to their bottom line).
Our second product is weeks away from its first release. We are launching at one of our
partner newspapers on November 9th--they have already pre-sold about 50 customers to
the online directory so we will have immediate revenue from that, and several of our other
papers are anxious to launch as well.
If you're already incorporated, when were you? Who are the shareholders
and what percent does each own? If you've had funding, how much, at what
valuation(s)?
We inc'd as a Texas S-Corp in March 2009 and we each own a 50% share. lloydarmbrust
put in $18k for start-up costs and jnovek put in sweat--lots of it.
If you're not incorporated yet, please list the percent of the company you plan to
give each founder, and anyone else you plan to give stock to. (This question is as
much for you as us.)

Not applicable.
If we fund you, which of the founders will commit to working exclusively (no
school, no other jobs) on this project for the next year?
Both--we don't want to become butchers or bakers, we want to be start-up founders. When
we're 80 we both hope to be starting-up something . . . we love this crap.
For founders who can't, why not? What level of commitment are they willing to
make?
Not applicable.
Do any founders have other commitments between January and May 2010
inclusive?
Depending on some vacation vesting at the old job, lloydarmbrust may be tied up on the
4th or 5th of January, but if this is unacceptable we can work around it.
Do any founders have commitments in the future (e.g. finishing college, going to
grad school), and if so what?
Paying for food and shelter is the only thing on the table. Our commitment is to this
company--we aren't some kids out of school who want to flip a start-up for quick exit and
fast cash. We are serious about saving the newspaper industry and we will succeed with or
without funding.
Are any of the founders covered by noncompetes or intellectual property
agreements that overlap with your project? Will any be working as employees or
consultants for anyone else?
No. jnovek already works full-time for Seeing Interactive and lloydarmbrust will quit his
current job when YCombinator starts. The YC money will be used to get lloydarmbrust
running fulltime faster than we could just bootstrapping it.
Was any of your code written by someone who is not one of your founders? If so,
how can you safely use it? (Open source is ok of course.)
We subcontracted two developer friends to do some work for us, but we paid them for their
time and we have contracts and releases saying the code is ours.
Are any of the following true? (a) You are the only founder. (b) You are a student
who may return to school when the next term starts. (c) Half or more of your
group can't move to the Bay Area. (d) One or more founders will keep their
current jobs. (e) None of the founders are programmers.
(Answering yes doesn't disqualify you. It's just to remind us to check.)
No.
If you had any other ideas you considered applying with, feel free to list them. One
may be something we've been waiting for.
We spend so much time thinking about newspapers and local advertising, that we find that
our ideas can almost always be integrated into our current goals. However, here are some
annoying things that need to be fixed: a clothing recommendation engine or Zappos plus
Amazon for shirts and pants; online grocery shopping application with an Amazon-style
recommendation engine, ie, "it's been two weeks since you've purchased milk, do you want
that added to your order?"; a search or recognition engine that matches houses or cars to
a unique set of user-entered values, ie, John is a traveling salesman who wants an efficient
vehicle with plenty of room to install his laptop; and a kayak-style travel search for idle
corporate and private jets--both for buyers and sellers.

Please tell us something surprising or amusing that one of you has discovered.
(The answer need not be related to your project.)
Children are useless until around the age of three. I never thought it would take them that
long to become real people.