YouNoodle Is A Terrible Idea • Hacker News Board

Re: YouNoodle Is A Terrible Idea

#11

Post by aneesh » Sat, Aug 09, 2008, 5:27 PM UTC

Even as a self-proclaimed math nerd, I'll be the first to admit that certain things just don't lend themselves well to predictive models. You can probably predict success in aggregate, but the individual cases are really tough to predict in situations where a lot of luck is involved (dating, starting a company, etc). Stop trying to find a mathematical formula for the success of a startup. It's hard to find a good one.

I think they're overestimating the valuations. Most startups' valuations will go to ZERO within 2-3 years, and yet YouNoodle tells you anyone is worth millions. I played around with their numbers: a startup that hasn't done anything yet, and that the founder is working on 2 hours/wk gets a valuation of over half a million dollars.

Re: YouNoodle Is A Terrible Idea

#12

Post by grag » Sat, Aug 09, 2008, 5:56 PM UTC

I get the feeling that the startup predictor is just a marketing gimmick to garner some press and that more useful services will be coming... It's certainly not a bad way to get people to talk about their company and register on their site. If / when they do come out with a more useful service they'd likely to get some good press simply because they've already been on the blogosphere radar.

Re: YouNoodle Is A Terrible Idea

#13

Post by sdpurtill » Sat, Aug 09, 2008, 8:00 PM UTC

swombat wrote: post #2

I am naturally skeptical of unknown people asking for details that belong in the business plan. If you're a potential investor, I don't mind sending you the plan, and without an NDA, but for random sites to ask for such details just seems wrong. Moreover, I think that any business owner who gives in to such requests is either desperate or stupid. I applied to thefunded.com at some point, and they asked for those kind…

Hey guys, Sam from YouNoodle here. The research and development project behind this was the biggest of its kind ever conducted. If you want to learn more about predictive analytics you can read some of the well-informed recent articles about Startup Predictor.

Harvard Business Publishing: http://discussionleader.hbsp.com/anthony/2008/08/younoodle_i...

The Telegraph: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/...

American National Public Radio: http://tinyurl.com/625gva

Venture Beat: http://venturebeat.com/2008/08/07/younoodles-startup-predict...

We are listening to your privacy concerns and will be making changes to how we convey our measures to protect you. Realize you're giving us sensitive information and we take our role in handling that very seriously. Appreciate any further comments or feedback you guys provide as we are iterating fast on this.

Re: YouNoodle Is A Terrible Idea

#14

Post by kirill » Sat, Aug 09, 2008, 8:01 PM UTC

aneesh wrote: post #11

Even as a self-proclaimed math nerd, I'll be the first to admit that certain things just don't lend themselves well to predictive models. You can probably predict success in aggregate , but the individual cases are really tough to predict in situations where a lot of luck is involved (dating, starting a company, etc). Stop trying to find a mathematical formula for the success of a startup. It's hard to find a good on…

Aneesh, it's hard to provide an objective experience if you use fake data. Nevertheles, based on the data we analyzed, a 500k valuation was the most likely outcome for the profiles of entrepreneurs you entered, working on a startup for approx 2 hrs/week. Remember that this is a 3-year prediction and the hours is relevant to that initial timeframe pre-funding. Many of those teams will have increased their hours/week during those three years; and 500k is an indication that they are most likely to achieve an angel round within 3 years, but not much more.

Re: YouNoodle Is A Terrible Idea

#15

Post by jon_dahl » Sat, Aug 09, 2008, 8:22 PM UTC

sdpurtill wrote: post #13

swombat wrote: post #2

I am naturally skeptical of unknown people asking for details that belong in the business plan. If you're a potential investor, I don't mind sending you the plan, and without an NDA, but for random sites to ask for such details just seems wrong. Moreover, I think that any business owner who gives in to such requests is either desperate or stupid. I applied to thefunded.com at some point, and they asked for those kind…

Hey guys, Sam from YouNoodle here. The research and development project behind this was the biggest of its kind ever conducted. If you want to learn more about predictive analytics you can read some of the well-informed recent articles about Startup Predictor. Harvard Business Publishing: http://discussionleader.hbsp.com/anthony/2008/08/younoodle_i... The Telegraph: http://www.telegraph.co.uk/money/main.jhtml?xml=/mo…

Thanks for being a part of the discussion, Sam. As a startup founder, here are my privacy concerns.

-- I'd like internal details of my startup to NEVER be released without my knowledge (including ownership breakdowns, investment amounts, number of employees, strategy/expected launch date, revenue/traffic numbers, etc.), under any circumstances - even anonymously. (If you released info on a "video startup in Minnesota", but left out the name, that would be potentially be enough to be traced back to http://zencoder.tv.)

-- If you want to use my information in the aggregate, that doesn't bother me as much, and I understand that you may use information about my company as a part of your predictions.

-- Obviously, you should take data security very seriously and go above and beyond 99% of companies in this area.

-- I should be able to cancel my account with a click of a button, and this should remove all of my private information from your system.

These would make me comfortable with YouNoodle, and if I felt certain that you'd follow these standards, I'd probably try it out.

Re: YouNoodle Is A Terrible Idea

#16

Post by 13ren » Sat, Aug 09, 2008, 9:23 PM UTC

Has anyone managed to get a fail out of YouNoodle (whether for a present, past or hypothetical startup)?

Re: YouNoodle Is A Terrible Idea

#17

Post by staunch » Sat, Aug 09, 2008, 10:28 PM UTC

sdpurtill wrote: post #13

swombat wrote: post #2

I am naturally skeptical of unknown people asking for details that belong in the business plan. If you're a potential investor, I don't mind sending you the plan, and without an NDA, but for random sites to ask for such details just seems wrong. Moreover, I think that any business owner who gives in to such requests is either desperate or stupid. I applied to thefunded.com at some point, and they asked for those kind…

Hey guys, Sam from YouNoodle here. The research and development project behind this was the biggest of its kind ever conducted. If you want to learn more about predictive analytics you can read some of the well-informed recent articles about Startup Predictor. Harvard Business Publishing: http://discussionleader.hbsp.com/anthony/2008/08/younoodle_i... The Telegraph: http://www.telegraph.co.uk/money/main.jhtml?xml=/mo…

If you could make it a desktop application and store data locally I'm sure you'd have a lot more takers. I'm sure you want to use information from your users to improve your system -- so let people send in anonymized information (and let them see _exactly_ what's being sent and remove anything they're uncomfortable with).

I'm guessing it's unlikely you guys will do that. But if someone else does I'd be happy to try it out :-)

Re: YouNoodle Is A Terrible Idea

#18

Post by staunch » Sat, Aug 09, 2008, 10:29 PM UTC

ericb wrote: post #7

YouNoodle failed to use BCC when announcing the site to their beta signup list (I was curious...). There were about 120 other people on the email some of whom immediately started Replying to All. Ugh. Thankfully, I used my gmail account.

Not exactly confidence inspiring.

Re: YouNoodle Is A Terrible Idea

#19

Post by aneesh » Sat, Aug 09, 2008, 11:07 PM UTC

sdpurtill wrote: post #13

swombat wrote: post #2

I am naturally skeptical of unknown people asking for details that belong in the business plan. If you're a potential investor, I don't mind sending you the plan, and without an NDA, but for random sites to ask for such details just seems wrong. Moreover, I think that any business owner who gives in to such requests is either desperate or stupid. I applied to thefunded.com at some point, and they asked for those kind…

Hey guys, Sam from YouNoodle here. The research and development project behind this was the biggest of its kind ever conducted. If you want to learn more about predictive analytics you can read some of the well-informed recent articles about Startup Predictor. Harvard Business Publishing: http://discussionleader.hbsp.com/anthony/2008/08/younoodle_i... The Telegraph: http://www.telegraph.co.uk/money/main.jhtml?xml=/mo…

From the Harvard Business Publishing Article:

> "Before the 1950s, lending depended on the wisdom and judgment of loan officers. Then, a company called Fair Isaac developed a way to use four simple variables to develop a credit score that reliably predicted the risk of lending to an individual."

That is a very misleading analogy. YouNoodle is not the present-day analog of Fair Issac. This goes back to the idea that while it's very difficult to predict random events individually, you can predict them well in aggreggate. Fair Issac isn't really betting on customer X defaulting on a loan -- they're really betting on a thousand customers like X. Same with insurance premiums. A model won't be a great predictor of one person, but if you have hundreds of thousands of customers, you can have a much more accurate estimate. This is the law of large numbers. For a simpler example, you wouldn't want to bet on the outcome of a single coin toss, but it's a pretty safe bet that if you toss a (fair) coin a million times, the heads percentage will be very close to 50%.

Fair Issac played the game by lending to lots of customers. YouNoodle is trying to play this game for each individual case. They're bold enough to mathematically estimate the value of one individual startup, and say that they have some confidence in it. It's the analog of making a loan to 1 person, insuring 1 person, or betting on a single coin flip. Probability tells you this is very risky. VC don't make thousands of bets like insurers or banks do. For the bank, my individual outcome doesn't really matter to the big picture. VCs on the other hand invest in a very small number of startups - each startup matters.

Re: YouNoodle Is A Terrible Idea

#20

Post by aneesh » Sat, Aug 09, 2008, 11:13 PM UTC

kirill wrote: post #14

aneesh wrote: post #11

Even as a self-proclaimed math nerd, I'll be the first to admit that certain things just don't lend themselves well to predictive models. You can probably predict success in aggregate , but the individual cases are really tough to predict in situations where a lot of luck is involved (dating, starting a company, etc). Stop trying to find a mathematical formula for the success of a startup. It's hard to find a good on…

Aneesh, it's hard to provide an objective experience if you use fake data. Nevertheles, based on the data we analyzed, a 500k valuation was the most likely outcome for the profiles of entrepreneurs you entered, working on a startup for approx 2 hrs/week. Remember that this is a 3-year prediction and the hours is relevant to that initial timeframe pre-funding. Many of those teams will have increased their hours/week d…

> "a 500k valuation was the most likely outcome for the profiles of entrepreneurs you entered" (emphasis added)

Exactly my point. Given 100 startups with that profile, you can say with some confidence that the average outcome will be 500k. But you're ignoring the distribution! It's very risky to make the bet that one individual startup will be worth 500k.

I'm not saying you should make better predictions. I'm saying that it's a very risky game to make mathematical predictions on individual valuations at all.

Most machine-learned models aren't better than humans, they're just much, much faster than humans. It's a bold bet you're making if you're trying to be better than humans at predicting valuations. Models don't allow for intangibles like "killer sales ability" that may not be reflected in your degree or past job, but that a VC can pick up on 5 minutes after meeting you.

See my reply to Sam's post here: http://news.ycombinator.com/item?id=272015

Edit: Someone put in the relevant numbers for WebVan or Pets.com. I think those two failed within ~3 years.