Interview with Andy Sack, CEO of Judy’s Book

Judy?s Book is a company that was incorporated in May of ?04 and we?ve been in business about a year and a half now. Simply Judy?s Book is your friendly yellow pages. It?s a community directory that is meant to be shared and accessed by the community and by your friends and trusted affiliates.

The original idea behind Judy?s Book came from my mother-in-law who has since passed away. My wife and I moved to Seattle in 2000, and when we moved here my mother-in-law who was a long time Seattle resident actually gave us the original Judy?s Book. It was a little green book that has probably 130 entries in it or somewhere in that neighborhood with recommendations of all kinds. The recommendations were for Jacob the painter, for Larry the plumber, etc. They were for Susan the dental hygienist, and they had comments like, “Make sure you ask for Susan to do your teeth, because Sally wasn?t nearly as detailed as Susan.”

I mean the book itself is actually quite funny and it?s really a testament to her personality and character. She was highly detailed, highly quality conscious, a conscious consumer and she gave it to us as a house warming gift. It was hand-written and cross referenced. We used the book a lot when we moved here and lent it to Chris Devore, my now partner. He used the book during a remodel and I told him he could borrow the book on the condition that he add to it.

Fast forward a few more months. My business partner and I were talking about what we wanted to do next. We really wanted to do something that had some social impact and was consumer oriented. We came up with the idea of Judy?s Book by discussing trends we were seeing on-line, but also with our own experience of me moving to Seattle and Chris doing the remodel.

It?s an interesting combination of different things. I might modify that or add to it and say it?s bringing a section of local search to user generated content and community networking.

We launched in February 2005. Just about nine months ago.

I used to be the chairman of Bodyshop Digital here in Seattle. Bodyshop Digital was the attempt by Bodyshop International to do a bricks-to-clicks, much like Barnes and Noble did. Bodyshop International is UK-based and also a Bath and Body Works competitor and there was an employee there a guy by the name of Jeff Rosenberg who I actually ran into at Thanksgiving, two years ago. We were chatting in the line at Whole Foods and at that point I had had the idea of the Judy?s Book and the idea that Chris and I were going to do something.

February ?05 was the launching site, November of ?03 is when I ran into Jeff at the Whole Foods. We, Chris and I basically holed up in Jeff?s basement. We would basically map out what we thought the site would look like. That took a couple of months to do, and then we got Jeff on board. Jeff started working on an initial alpha test in basically February of ?04 and then a year later we launched the site.

It?s been really, it?s been primarily word of mouth and free PR.

The site does have an invite feature, so that?s definitely one component. When we originally started the idea we definitely had a social networking engagement. I think we have sort of migrated from that a bit. I mean it?s still present and important to the site, but we see it and use it. We see it more as becoming a community resource that?s simply a social networking site.

That?s a really good question and I?d say yes. Meaning I think that there?s pros and cons to both approaches. There are people who focus and go vertical and there are people who like Judy?s Book who go horizontal and I don?t think there?s any one right way. However, Judy?s Book is in the directory business. Judy?s Book is not in the classified business.

That?s an important distinction to me because sometimes people compare us, and I think appropriately so, to Craigslist and I think we?re complimentary to Craigslist but I don?t see Craigslist at all as a competitor. The reason for that is that Craigslist is fundamentally in the classified business. I mean classifieds are a great business and it?s a huge market. There are some similarities, but at the core they are different and complimentary.

The directory space has a number of factors that make it distinct from the classified space. I mean the yellow page business national in the U S is a $15 billion business. You could expand beyond that and call it local advertising in general, which is a $100 billion+ market. That is a huge market opportunity, which is why there are a lot of entrants into this space. They see the same market trends that we do. So from a market opportunity standpoint it?s just big market big dollars in the local space.

Classified have a sort of a shelf life as long as the transaction is open, so a typical transaction is less than a week and a max of 30 days. When we get a piece on content we think that has a shelf life of a minimum of two years and arguably 40 years.

Yeah as long as that service hasn?t materially changed, right? So, Larry the plumber is a perfect example unless he materially changes his business; then that piece of content has a much longer shelf-life. And inherent in that has been a real difference in terms of the way the fundamentals of the business work.

Well today we?ve just started to introduce our merchant offering and over the next six months you?ll see a lot more from Judy?s Book being introduced to small and medium size businesses. We sell two products that customers may purchase. One is an inventory product, which is basically an ad so Larry the plumber can buy as ad an the area featuring Seattle?s plumbers.

He is indeed. And he?s a good plumber. And then the second offering we have is a pay-per-call offering, which is basically the small to medium-size business paying on a per lead basis for calls that come in from the Judy?s Book site. So in other words the consumer either does a search on a search engine like Google or Yahoo and they?re looking for a landscaper or a chiropractor in a particular geographic and Judy?s Book will come up in the search results. The consumer will see that and then we can deliver leads via the telephone to the small or medium size advertiser.

The answer to your question is yes, we do both and I think we need to do both. We need to both work on word of mouth as well as contacting them directly. I think we?re in the learning stages right now in determining what the best approach is to accessing the market.

That?s exactly correct.

I?d say we?re in the learning stages and we?re doing both and we?re sort of experimenting with what works. We?re doing direct mail, we?re doing telephone, we?re trying to do word-of-mouth. We?re trying it all and trying to track what works and identifying the pros and cons of both. Our goal is determine what the most cost-effective way will be to target advertisers. We have not yet figured that out and that?s one of the real reasons that we just raised our most recent round of financing.

Yep!

One of the things that I firmly believe in is building a really strong open culture that?s team-oriented. It?s all the team members at Judy?s Book who work well together and also have a lot of fun. I think that?s definitely one of key beliefs about starting a business, which is that is a team effort.

Not all of them. Although that is in the process of being changed.

Yeah we raised $8 million. The investment was led by Mobius Venture Capital, the lead partner was Brad Feld who has really led a bunch of investments in community generated companies like Newsgator, Tech Variety, and Feed Burner. Our plans for funding are really what I was talking about before, which is sort of opening up the financial resources, human resources and trying to figure out the approach to the merchant side, trying to accelerate the merchant offering as well as continue in accelerating the consumer side.

There is and we really take a sort of Google approach to the model, which is to present the natural search results to the consumer as the primary objective and then the commercial advertising is separated on the right side of the page.