RescueTime actually rescues time — nine percent of it for productivity

Anyone who sits in front of a computer every day — all day — realizes how many ways there are to get distracted. There are games, instant messaging software, music — hell, I even have fun using the calendar application when I’m procrastinating from doing work. Then there’s the Internet. If it wasn’t invented as a time suck, it has grown into just that. RescueTime is a startup that aims to evaluate and help you manage the distractions.

The core idea is simple: If you see how much time you are wasting, you’re probably going to correct it. Using a small application that runs in the background on your computer, RescueTime monitors what you do and sends data such as what applications you have open for how long and what sites you are looking at in the web browser up to its servers. When you then login to RescueTime’s site, you can get detailed analysis complete with charts and graphs for any day, any week, any month, any year or forever.

People into stats will love this. People into productivity may love it even more.

I say that because while it’s easy to have a company goal that states that you will make people more productive by using your application, that isn’t always the case. But RescueTime has some data to back it up.

Using two full months’ worth of data from both business and personal accounts across its entire user base, RescueTime saw the amount of time spent on applications and sites that were labeled in their database as “work” rise nine percent from week one to week eight. RescueTime founder Tony Wright thinks the difference would be even more pronounced if compared with how people were using their computers before RescueTime came into existence.

Now, you might think that people can just cheat the system and label a site like Facebook as “work.” That may be true for personal accounts (though I’m not really sure why you’d want to cheat when you are trying to get real data), but for business users, the manager on the account does the labeling.

“I often liken it to seeing a breakdown of spending from your credit card statement for the first time… Once you actually start paying attention to how you spend a resource, you spend it quite a bit more mindfully,” Wright told me. “I think it’s mind-boggling that businesses work very hard to track every dollar to the penny, but haven’t the slightest clue where they are spending their time. RescueTime gives ’em a way to do that without actually compromising individual privacy.”

I’ve just started using RescueTime myself. The early data I’m getting back is very compelling. (Said as I slowly close my calendar application.)

The company has just raised its first round of funding, as TechCrunch noted a couple days ago. The $900,000 round was led by True Ventures. It was joined by angel investors Tim Ferriss (author of the 4 Hour Work Week), Mike Koss (an early pioneer at Microsoft), Chris Sacca (a former Google executive) and Mike Seckler (formerly the founder of Employease).

RescueTime is one of the companies that has risen from the Spring 2008 Y Combinator Demo Day.