The local ABC affiliate dropped by YouNoodle’s offices in San Francisco to get an idea of how useful their new startups valuation predictor is. ABC’s Sue Thompson interviewed CEO Bob Goodson on how the service works, and I dropped in for a cameo and a dose of healthy skepticism.
We first covered YouNoodle in February way before it launched. It entered public beta last week, and now anyone can enter their startup information and see how the service scores it from 1-1,000 along with a dollar valuation prediction a few years out.
Attention all valleywatchers!
This is precisely where Michael Arrington loses his way and where his blind ambition colors his view of a start-up. If YouNoodle becomes wildly successful then it is a serious threat to techCrunch and he cannot let that happen, so, best way to ensure this doesn’t happen is to go negative on YouNoodle — early and often — so that people don’t really like it.
I think it’s potentially useful for investors, but the savvy ones will of course take any scores with a healthy pinch of salt.
That aside, the predictor is achieving what I believe is it’s real goal: to be incredibly powerful PR drvier for YouNoodle. Mike – you are good on TV.
>> to be incredibly powerful PR drvier for YouNoodle
yep
and jervitz – you’re an idiot
Here is the problem with YouNoodle. Echoing what Michael said on the video, if someone were to YouNoodle Google when they first started, they may not have received funding to kickstart their company. Just imagine the waste in opportunity and the state of technology without Google.
So how many potential “Googles” will be undervalued by YouNoodle using their “algorithm”?
Agreed. However doesn’t the same thing happen today (at a lower level) with the venture community? I’m sure there are/were some good ideas that never went forward because the VCs didn’t like them. Of course it is easier for one algorithm to be wrong than for a lot of people.
Chris – that potential problem with the predictor is overblown. Above all, the predictor is a fun tool. Are any good investors seriously going to make decisions solely on what the predictor says? Of course not.
It’s a cool tool I guess but should only be used as a approximate measurement, sorta like websiteoutlook.
This service reminds me of the flawed University ranking system. the magazines go about asking 200 ppl in a pool of 3000 and based those credentials, an index is printed and inflation takes its course
What mike said is correct. jervitz you’re an idiot!
yep
read my comments below
there’s one similarity between the college ranking system and this indicator thing – when they are successful they become a self-fulfilling prophecy.
If the YouNoddle predictor will ever become a standard of a startup’s valuation – I’m saying if, I am pretty skeptical about it – perhaps entrepreneurs could totally skip the VC part and go to public markets.
Sure, companies need profit and positive cashflow in order to handle all the procedures of IPO and staying as a public company. But, if YouNoodle says a company is gonna worth 100 mil in 3 years, and the public market investors treat it as a reliable reference, the valuation could become a self-fulfilling prophecy. Then the startup could raise enough capital and that hypothetical valuation is gonna pay for itself.
Just some wild speculation here at 5am.
- Eric Wan
http://www.ledova.com
Job Reviews from Inside Employees
How reliable can a valuation tool be when they don’t even qualify their ratings? I used YouNoodle to rate my own start-up and was amused to see that after I got my rating, there was no information to qualify what that rating meant. YouNoodle states what it bases it’s rating on, but subsequently doesn’t tell you what your score means. What’s the point then?
Additionally, employing a few ‘experts’ and scanning the web for content on your startup is not an accurate indication of strength. True success comes from the entrepreneur themselves – their ideas, goals, drive, etc. How can software, unless personality-based, rate that?
YouNoodle, to me, was a fun experiment, but nothing more. I wouldn’t base a damn thing off of what it says.
youNoodle? I think i’m gonna eat noodles because i am hungry. haha
I used the service, seems like it needs more to be credible. What exactly? I don’t know. But it said Jippidy.com would be worth $60m in 3 years so I like it.
What is younoodle’s younoodle score?
Total BS- If Wall Street and the billions it pours into computer driven research can’t get investing right all the time, how can a tiny startup with a small sample size? This sort of nonsense has been going on since the Computer Age started and it never works as predicted. Yet people seem to fall for it, time and time again. How do you run the data on fads and human behavior? At least a lot of consumer facing Internet startups are all about those things, first and foremost.
It was a fun toy. Amusing for a 1 time deal. http://www.edmodo.com should be worth 15 million according to them in 3 years. Eh whatever, I take it with a grain of salt. It may drive a bit of traffic to my site with their publicity so any startup would be stupid not to put their info in it, but that’s probably about it.
-Jeff
I just took a look and it was kind of fun, but seems to have way too much emphasis on the founders and many of today’s “leaps of faith” would have been deemed losers by it. There is too much emphasis on this algorithm and not enough on the “luck/ timing” factor that plays a big role (how could that even be quantified?) Flip side – many of the successful founders’ second start-ups aren’t exactly bringing in the billion$ yet, which might reinforce the notion that the elements of luck and timing play a big role.
The idea of a startup predictor is so startlingly absurd and so transparently a marketing gimmick that I can’t believe media are taking the bait. There’s no chance in hell that even their own investors (Founders Fund) believe it; it’s patently silly. When will someone just clearly state that the emperor has no clothes so we can move on?
YouNoodle should come with a disclaimer: “For entertainment purposes only.”
I think the best startups are based on passion. Where is the passion meter? So what happens if you have a Masters Degree in Philosophy? Does that mean less chance of success? The real deal is in niche markets. OpenSocial for example has 350 million + users and growing so it seems much more viable to make a service to cater to a massive userbase. How do they even make money? How about charge $5 a month for a service that has 350+ million person audience! Investors will not buy into this Your-Noodle (is small) service if they are true entrepreneurs!!
I have created software which tells me tomorrow’s share prices of NASDAQ companies. The algorithm it uses is top secret, I can’t tell you anything about it. This software will shake the entire investment world, I will make us all millionaires! You just need to buy my software…
Um, what’s their valuation prediction for YouNoodle?