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February 18, 2008

Will YouNoodle Predict Its Own Inevitable Failure?

Michael Arrington

58 comments »

New startup YouNoodle debuted to some first class press coverage this morning - a headline in the NYTimes that reads “A Start-Up Says It Can Predict Others’ Fate.” The really choice quote from the article from CEO/co-founder Bob Goodson is this:


“Give us some information, and we’ll give you some idea of what the company will be worth in five years.”

The best part about the article is that the prediction feature hasn’t launched, so no one can see if it’s for real. For now, the site is a database of startups with very light information. Hardly what I would consider NYTimes material. If not for the investors, which include Founders Fund, Peter Thiel and Max Levchin, there’s no way we would have covered this.

The NYT did cover themselves somewhat by bringing in some venture capitalist quotes calling bullshit on the whole thing. “If their tool did such a good job, they’d raise a fund themselves and beat the tar out of us,” said Paul Kedrosky, who didn’t bother to write about the company on his blog.

And he’s exactly right. Just like the people who say they can sell you a book and a seminar to help you get rich quick off of distressed real estate - if these guys found some sort of magic formula that actually predicted the value of a startup down the road, they’d keep the information to themselves and make, well, unlimited amounts of money.

It’s hype and nonsense, and it won’t work. The NYTimes bit on it hard, but our readers are smarter. In a poll that Duncan ran earlier the vast majority say there’s no way YouNoodle can pick winners based on some algorithm.

I propose this as a test - If and when YouNoodle launches this magic predictor thingy, they should run their own founding team through it. If it predicts failure, then it’s spot on and we know it will work.

So far, Goodson says, they haven’t run themselves through the model. Smart move.

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YouNoodle
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This entry was posted on Monday, February 18th, 2008 at 7:44 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Trackbacks/Pings (Trackback URL)

  1. Dekut.com

    February 18th, 2008 at 8:53 pm

  2. YouNoodle: An Over-Hyped Startup That Predicts Startup Success or Failure

    February 18th, 2008 at 9:00 pm

  3. Citizen Jake

    February 20th, 2008 at 1:11 pm

  4. YouNoodle: Smarter than you think « The Guidewire

    February 25th, 2008 at 1:09 pm

  5. KI + VC = YouNoodle.com « Laufwerrk

    February 28th, 2008 at 9:07 am

Comments

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  1. Scott from popularo

    February 18th, 2008 at 7:50 pm

    YouNoodle predicts popularo will be worth $58 billion in 5 years. At least that’s what we hope it will say… right now it says ” Startup Predictor will be available shortly. Enter your email below and we’ll let you know when it’s ready.”

  2. Your Daddy

    February 18th, 2008 at 7:51 pm

    The whole youXXXX.com crap is soo 2007.

  3. Technicle

    February 18th, 2008 at 7:51 pm

    Interesting PR gimmick to get themselves into mainstream media coverage.. 8-)

  4. Michael Arrington

    February 18th, 2008 at 7:52 pm

    “gimmick” being the key word, technicle

  5. sharpshoot

    February 18th, 2008 at 7:55 pm

    I know these guys well and considering their drive and track record they know how hard it is to get right.

    Goodson was 1st employee at Yelp, and Makharinsky ran metrics at Slide. Both of these startups went through multiple interations to get their offering right and both these guys have real world experience of how hard it is to make something work well.

    What YouNoodle is suggesting is that startup success is not black box magic. How many entrepreneurs so you cover who have no idea about how to promote their startup, or network, or are smart enough to keep iterating, or have mad drive, or have a track record of doing stuff and churning out projects. This is what every angel investor looks for.

    If they can differentiate between savvy founding teams and non savvy teams thats the first step in identifying who may succeed. Your assertion suggests that they will predict with 100% accuracy the valuation of a startup in 3 years, which is plain wrong.

    However it isn’t totally bogus to suggest that you can differentiate between a good founding team and extrapolate from a combination of factors who has the chops to succeed or not. Good teams win, ideas count less as they can be changed. What YouNoodle is building has a lot of value and for people who can’t get their head round it, well stop over interpreting the assertions and give them a chance.

  6. Michael Arrington

    February 18th, 2008 at 8:00 pm

    sharpshoot - not my assertion. their quote.

  7. yongfook

    February 18th, 2008 at 8:06 pm

    course, now they’ve been covered twice on techcrunch almost in the same day and in a major newspaper - that’s the kind of exposure you can’t earn or buy, it has to be *spun*…

    bravo to the team if exposure was their only intention, because it bloody well worked.

  8. sharpshoot

    February 18th, 2008 at 8:06 pm

    Have a look at the venturebeat article on them - much more balanced and accurate. Did you approach them for comment?

  9. l-m-a-o

    February 18th, 2008 at 8:08 pm

    I give these guys a less than 6:1 odds they’ll succeed

  10. Technicle

    February 18th, 2008 at 8:10 pm

    @4
    despite, it worked less successful than Mr. Alex Tew’s milliondollarhomepage, wrt the no. of worldwide press coverages received for a startup — http://www.milliondollarhomepage.com/press.php :-D

  11. Nis

    February 18th, 2008 at 8:12 pm

    Hi.
    What about http://killerstartups.com/
    I think they deserve to be in media than this younoodle…Certainly there is some connection thus in such media….

  12. R.J.

    February 18th, 2008 at 8:19 pm

    The algorithm is just the ‘hook’ to get folks in, and an interesting lever is all. This service in its entirety could be something useful for great innovators/novice entrepreneurs at universities and such. Worth watching.

  13. Michael Arrington

    February 18th, 2008 at 8:20 pm

    sharpshoot - oh boy, here we go about balance again. The NYTimes article was beautifully balanced. And total bullshit.

  14. Paly

    February 18th, 2008 at 8:22 pm

    why aren’t my comments showing up for me!?

  15. Paly

    February 18th, 2008 at 8:24 pm

    If they run themselves through it and it says ‘failure’ then their algorithm works, meaning they will be successful, meaning their algorithm was wrong, meaning they won’t be successful, meaning…

    But if it says ’success’ then their algorithm is wrong and they will fail.

    Thus, it is only reasonable to assume that their algorithm will predict self-success. Both in the interest of the company and in not making the universe implode

  16. un.valley

    February 18th, 2008 at 8:34 pm

    but…

    these guys are based in the valley…I would say that gives them much better odds…I would say they are probably the best of the best.

    - wounded troll

  17. blah

    February 18th, 2008 at 8:56 pm

    It could be that these idiots want to collect as much data as possible on founding teams and their companies and company history to later spin it off into a job site of some sort for people wanting to start companies.

  18. AnonTroll

    February 18th, 2008 at 8:57 pm

    If their stuff works, no more need for TechCrunch! Except of course to see Michael go off on people.

  19. Joe

    February 18th, 2008 at 9:01 pm

    Loren Feldmen pretty much summed it up in one of his 1938 Media rants this morning - “The ultimate in stupidity”

  20. Baher

    February 18th, 2008 at 9:04 pm

    Now… this is what YouNoodle deserve from TechCrunch, great post Michael.

    I have no idea how this startup managed to convince their investors, maybe they showed them that their super-intelligent AI engine predicted the success of their startup :P

  21. Josh

    February 18th, 2008 at 9:08 pm

    Ever take one of those personality tests from Gallup or someone else before a company offered you a job?

    What about those future nfl players who have to take a written test to show their thinking skills before the draft?

    I bet you have. This is most likely the same thing, but geared toward startup founders.

    Not sure if it will work because of the luck variable involved with a startup being as big as it is.

    I would have to agree with the above poster who asked, if it works so well why wouldn’t they just use it themselves and make gobs of cash? well, that would be clue number one that this is a novelty product and perhaps provides accurate and well researched results like other great companies…Alexa comes to mind.
    ;)

  22. Andrew

    February 18th, 2008 at 9:10 pm

    if you find this start up to be bullshit why did you cover it in the first place? Twice actually…surely you get a ton of email from other start ups that are more deserving.

    You are proving these guys right, because you gave them a ton of exposure, that they would otherwise not get. So when they launch officially, they get a really nice amount of those early users.

  23. Jean-Michel Decombe

    February 18th, 2008 at 9:13 pm

    So when is the feature actually launching? April 1st?

    Seriously, predictive analysis tools do exist for established companies, but I think it will be interesting to see what information they need to doevaluate startups, and how they use it (if they ever reveal that secret sauce). The founding team is very important, for sure, but how would have one predicted the success of Facebook, since Mark Zuckerberg had no prior experience? And what about Bill Gates and founding team when they started Microsoft? It should be fun to see what they’ve got, though.

  24. Harold

    February 18th, 2008 at 9:20 pm

    Have you read most of the comments on this site? It’s mostly people who would clearly pay to find out some mythical valuation of their “company”.

    You can usually tell who these people are by clicking their name in the comments and being led to some complete useless, poorly executed site with no userbase and google adsense ads everywhere.

  25. Ben

    February 18th, 2008 at 9:32 pm

    Way to go, Mike. The NY Times really made assess of themselves on this one and it goes to your point about Fred Wilson’s misdirection earlier this week. As you mentioned, domain-specific bloggers are in most cases much better sources of information that journalists. Instead of having to write something that is “objective,” you can call out bullshit like this.

    YouNoodle may end up being a decent service for start-ups, but the prediction engine is downright silly and an insult to our intelligence.

  26. AnonTroll

    February 18th, 2008 at 9:45 pm

    I think michael is just mad they went to the times without talking to him first.

  27. JosefVirek

    February 18th, 2008 at 10:18 pm

    Did anyone check if YouNoodle was funded by Fred Flinstone..i mean Wilson?

  28. Ivan Kirigin

    February 18th, 2008 at 11:18 pm

    Talk about a Delphic oracle!

    If it works and you’ll fail, you’ll have unlimited riches.

  29. Matt

    February 18th, 2008 at 11:30 pm

    @#15 it’s actually a conundrum… or perhaps a tragedy. If it predicts self failure then it will be sadly correct. Not meaning ‘it’s right and a success’, but just plain right (and a failure)… see?

  30. Jyothirmayee

    February 19th, 2008 at 1:43 am

    Can there be a better example ;) I couldn’t help but map this discussion to statistical inference: Type I error and Type 2 errors (http://en.wikipedia.org/wiki/Type_I_and_type_II_errors#Type_I_and_type_II_errors)

    YouNoodle Own Predition ->
    Result | success failure
    V
    success true positive false positive (Type I)
    [excellent] [AI failed, so what.. err.. is there a point?]

    failure false negative true negative
    [close to reality? ;) [AI works but I fail.. err.. no luck?]

    What is truly amusing is the founders would find themselves in absolutely clueless points 3/4. Now if you are as amused, go ahead put some numbers against each and compute the posterior probability. :P

  31. Jyothirmayee

    February 19th, 2008 at 1:50 am

    (Whoops formatting was lost. Here is what i came up with)

    Prediction: success Result: success
    true positive [excellent, no one believed huh]

    Prediction: success Result: failure
    false negative [reality? ;)]

    Prediction: failure Result: success
    false positive [AI failed, so what.. err.. is there a point?]

    Prediction: failure Result: failure
    true negative [I failed, but hey then AI worked, but whats the point]

    There is no good position except the rare event of a true positive.

  32. mike

    February 19th, 2008 at 2:05 am

    oh Come on, that article was rather one sided?

    What’s wrong with creating intelligent filters? Obviously it can’t predict the future (nothing can), but I bet it’s probably better at probabilities.

    There are only so many deals you can look at in a day.

  33. mike

    February 19th, 2008 at 2:08 am

    It really is a great idea and an advancement of the art.

    The idea that *parts* of Venture investing can not be boiled down into scientific, statistical analysis is just pure ignorance.

    Mike, stick to the facts. That’s the value of techrunch. Expressing your opinions about the value of things isn’t helping your credibility.

  34. Jeff

    February 19th, 2008 at 2:22 am

    I am not of course as sure as YouNoodle may be in predicting the future, but I can’t help but think that the company name is refering to us… the public for beleiving anything they are saying!! Basically YouNoodle if you can’t see we are taking the piss and its just to get your attention for something else we have planned…. Maybe wrong though :)

  35. I Am Not Posting To Spam My Blog

    February 19th, 2008 at 3:51 am

    @22: “surely you get a ton of email from other start ups that are more deserving.”

    While I can’t speak for Mike, I’m guessing that most of those emails are crap along the lines of “We’re X with revenue-sharing”. The fact that 90-95% startups fail is a timely reminder of this.

    This is newsworthy because it’s interesting (not in a good way, but it’s nice to know what Septic Peg is doing nowadays) and it’s got some credulous MSM coverage.

  36. Paul Shafft

    February 19th, 2008 at 4:43 am

    There are many factors that VCs use to evaluate the potential of a startup. It’s easy to see how somone would establish ratings for the personnel involved, the investors, the market etc and come up with some overall score. What seems is nonsense is the AI bit. It implies there is some machine based intelligence working this out, rather than simply a computer running a formula dreamed up by VCs.

  37. Peter

    February 19th, 2008 at 4:47 am

    not sure i understand the noodle hate. i mean, all sorts of experts in important positions and expert system predict all sorts of things all the time - and about important things like peak oil, peak coal, end of food, human population - and they get published in the most respectable places all the time, but apparently, some startup claims to have a helpful predictor. why so scared of a little piece of software? might it put you out of business? no trip to sxsw necessary?

  38. jerjer

    February 19th, 2008 at 6:34 am

    I too have much skepticism about younoodle, who wouldn’t? yet I find the whole concept plausible.
    “if these guys found some sort of magic formula that actually predicted the value of a startup down the road, they’d keep the information to themselves and make, well, unlimited amounts of money”.
    hmm, Michael. let’s suppose the magic formula did exist and you had no money to begin with, wouldn’t you try to do just like them??

  39. Magic 8 Ball

    February 19th, 2008 at 6:45 am

    Outlook not so good.

  40. Bryan

    February 19th, 2008 at 7:18 am

    > In a poll that Duncan ran earlier the vast majority say there’s no way YouNoodle can pick winners based on some algorithm.

    Aren’t polls just a way to pick winners with some algorithm? ;)

  41. MikeT

    February 19th, 2008 at 9:19 am

    @40: good point Bryan!
    The polls reflect the “wisdom of crowds” (read this book, by the way) and it’s the best way to find out what the people think. And it’s not even an algorithm :)

    @YourDaddy: the youxxxxx.com stuff will still be en vogue while youtube is alive. I just don’t understand why I don’t see many other winners with “you” in their domain names… Many are taken but no good products yet - an example is this younoodle stuff.

  42. Alex Hammer

    February 19th, 2008 at 9:41 am

    Michael, I’m sure it’s no CrunchBase, which is very good.

  43. dave

    February 19th, 2008 at 9:44 am

    well, first of all we know the algorithm will be tailored and tweaked to make younoodle *shine* brightly…as for the dbase, i think crunchbase is actually cleaner…why not open source that shit? come on…

  44. Ron Patiro

    February 19th, 2008 at 9:57 am

    1. Not surprised NYT is covering this.

    2. YouNoodle is an awful name

    3. Great title for this post!

  45. Keith

    February 19th, 2008 at 10:05 am

    I think everyone’s missing the point.

    They’re generating buzz with the ’start-up predictor’, but that’s not the focus of their site.

    YouNoodle is a cool name I think, very memorable.

  46. YouChump

    February 19th, 2008 at 11:22 am

    Congrats Michael, congrats TechCrunch. The whole entrepreneur / blogging community is in hysterics today, I’ve received this and the likes of “Is it Wrong to Hope They Fail?” (Entrepreneur.com) over a dozen times on email, Facebook etc. It seems like it’s a small clique of London boys (YouNoodle, Sharpshoot, Auctomatic etc) who make a living through pure bullshit, spin, hype and lies. Ridiculously overvaluing their companies to gullible angels, media whores hungry for any sort of press attention using ridiculously overspun fables to get coverage. Well finally let’s hope the curtain has shut, you’ve lost credibility amongst important respected peers, who are intelligent enough to sift between the noise and the humble, modest, true winners out there. Shame you’ve peaked early, and won’t be respected entrepreneur pioneers a decade down the line, because you got greedy. Enjoy the final scrapes of your angel investment boys, that’s all you’re going to see, and enjoy having to resort to dull office jobs when the fairytale shortly ends.

  47. xoost.com

    February 19th, 2008 at 12:51 pm

    cool idea

  48. Laura

    February 19th, 2008 at 3:41 pm

    I would like to hear the opinion from other A.I. experts on this. It is embarrasingly obvious from they’re NYT article that they have fundamentally have no idea what they’re talking about.

  49. Laura

    February 19th, 2008 at 4:19 pm

    Sorry the previous post was incomplete.

    I would like to hear the opinion from other A.I. experts on this. It is embarrassingly obvious from their NYT article that they have fundamentally no idea what they’re talking about.
    Their motivation is that other industries of similar size use A.I.? And a false negative/positive would be a paradox? It smells like fairytale.

  50. Youchump2

    February 19th, 2008 at 5:08 pm

    Hi Youchump,

    You brought a tear to my eye. It’s good to see there are other people who have figured out what these guys are all about. That was spot on. I wouldn’t have said it better myself. Thank you.

  51. rick

    February 19th, 2008 at 7:32 pm

    Haha, it’s so obvious that this is personal for Arrington.

  52. Diana

    March 13th, 2008 at 7:46 pm

    1. Unorganized site. Much of the logic doesn’t make sense.

    2. YouNoodle has identity crisis: is it a start-up community? a job search place? recruiting site? facebook-like social networking? or all of the above?

    3. Just plain too much non-serious users on the site.

  53. Diana

    March 13th, 2008 at 7:47 pm

    oh and boost that popularity by forcing this YouNoodle down to students’ throat. (tie to competition…etc)

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