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OwnLocal YCombinator Application

OwnLocal successful YCombinator application from 2010 winter batch (YC W10).

OwnLocal automates marketing for over 129,000 SMBs through 3,300…
OwnLocal works with more than 3,300+ local media companies to transform their legacy customers base into sophisticated local digital advertisers. Our technology has been designed to work seamlessly with your current sales processes and makes it simple for any newspaper, radio station, or broadcast television station to help your local customers win online.
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If you have a demo, what's the url?

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Our first product was a print-to-web conversion system that immediately generates revenue for small newspapers: 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.

What is your company going to make? Please describe your product and what it does or will do.

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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 Yellowpages plus Yahoo! Merchant Solutions divided by Angie's List. By leveraging trust that small newspapers have with their local advertisers we will create a nation wide 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


Who writes code, or does other technical work on your product? Was any of it done by a non-founder?

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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.

How long have the founders known one another and how did you meet? Have any of the founders not met in person?

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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.

Please tell us about an interesting project, preferably outside of class or work, that two or more of you created together.

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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

Please tell us in one or two sentences about something impressive that each founder has built or achieved.

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While running the web department for a small daily newspaper, lloydarmbrust grew page-view 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 most successfully hacked some (non-computer) system to your advantage.

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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?"


How long have each of you been working on this? How much of that has been full-time?

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7 months and 2834 lines of Ruby, SQL and sh, plus a large but uncounted volume of HTML templates.

When will you have a prototype or beta?

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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.


What's new about what you're making? What substitutes do people resort to because it doesn't exist yet (or they don't know about it)?

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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: and that doesn't include weeklies. Our products make newspapers money and bring local communities together.

Who are your competitors, and who might become competitors? Who do you fear most?

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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 do or will you make money? How much could you make?

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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.


Please list all legal entities you have and in what state or country each was formed (e.g. Delaware C Corp, Mexican SAPI, Singapore Pvt Ltd, etc.).

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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 had any other ideas you considered applying with, please list them. One may be something we've been waiting for. Often when we fund people it's to do something they list here and not in the main application.

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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 plusAmazon 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.

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Children are useless until around the age of three. I never thought it would take them that long to become real people.

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