I do not see any logic in your article. Somethings are NOT meant to be predictable. Fate of a startup company being one of them.

Can you predict about earthquakes? Can you predict about stock market?

TC quality is going down the tubes.

No algorithms. Just common sense, some open source social networking tools, and a LOT of research and hard work.

Cheers,
Kevin

It worked for baseball….

The full review entitled “I Predict YouNoodle is Worth Nothing” is here for those interested:

http://www.chub...le/reviews/amyz

Review excerpt below:
”
First and foremost, the business model is fatally flawed because the product, The Startup Predictor, is interesting but hopelessly inane.

* Valuation is an art – Financial models, no matter, how sophisticated and dressed up they may be are always wrong. We just need to look at our current financial/economic predicament to see where our financial models got us. They’re very good at predicting things when companies are growing or declining at steady/predictable rates and if you have some understanding of key business indicators, but no matter what, they are wrong. The valuation models are consistently wrong, often significantly, even when there are reams and reams of historical data as there is with public companies. Private companies where the data is much more spotty and where financials are non-existent are therefore even more difficult to model. While the goals of disintermediating the “old boys network” sounds interesting, evaluating startups is a mix of skill and luck and so diligence is required but so is a good gut instinct.
* Intangibles cannot be modeled – The idea that “the concept itself, the advisors and the team” can be considered, evaluated and modeled is appealing because it sounds tidy, but there is no way to credibly do this no matter how fancy the diagrams or logic YouNoodle shows look. Startups are inventing markets in many instances so how does the concept get evaluated in such instances? Using comparable companies and their data? What if there isn’t a real comp? Perhaps it’ll be a hybrid of existing companies? There is way too much room for error – very significant error. You can look at the connections & relationships between the founders, but beyond anecdotal evidence that this matters, there is little real proof. When we talk about advisors, I assume this means folks like the VCs and advisory board of the company. Problem #1 is that if the startup has any legitimate VCs, they’ll never have a need for this. And modeling advisors will be rudimentary at best in my view. Oooh, Kleiner Perkins is an investor so we’ll give your valuation a factor of 2x since they’re an A-list VC. Same with modeling the team. You’ve done well in a prior business so we’ll give your valuation a bump. Doesn’t sound too complex or fancy.

So beyond the fundamentally flawed product, what is wrong with the business model:

* Let’s be the Moody’s of startups – As the recent news makes clear, the rating agencies which Moody’s is one of are not very good at their jobs. And they get lots and lots of information from companies they rate. And they still aren’t very good at it. With startups, you’re inherently data-constrained making the idea that a quiz with user-submitted inputs is useful even more laughable.
* It makes sense to be biased to the upside – Even if the Startup Predictor generated credible valuations, the company is incentivized to ‘grade inflate’ if they want startups using it. As an entrepreneur, I’d only use the Startup Predictor if it told me an answer I like which is a high #. So the target for this product is for entrepreneurs too inexperienced to develop their own credible valuations. If I’m an investor seeing a YouNoodle valuation, I would be suspect of the upside bias and an entrepreneur bringing a YouNoodle valuation.
* Investors will pay for this? – If the price was insignificant, then yes, this might even be an interesting data point to a time-strapped investor. But, given that as an investor, you may be making a large bet with money given to you by your investors, are you really going to rely on a report vs your own expectations and model for an investment? I doubt it or at least I don’t think smart investors would do this. If it’s a $100 per report, sure why not? But if all investors seriously look at 500,000 companies per year and 10% of those evaluations get a YouNoodle report (this is a high market penetration rate), that is 50,000 reports per year in total (I’m not talking about the pitches they see but those they seriously evaluate). That is a $5 million opportunity. I’m not sure how much they raised, but that doesn’t seem like a big # given some of the brand name investors they have and the very organic, grassroots effort probably required to get these investors on board. According to the company’s CEO, he thinks “YouNoodle will be worth $96 million in 2010″ based on their own algorithm. Wow. (source: http://www.tech...ctor-is-coming/)
“

The thing that always strikes me as wierd (wierd in that no one questions them about this) is: if they can predict startup success, why would they not start their own VC fund rather than sell the software. The reason is obvious: its the same reason why psychics can pretend to tell you the winning lottery numbers for a fee, rather than buying lottery tickets themselves.

Those who can, do. (entrepreneurs)
Those who cant, invest.
Those who cant invest, advise.

Keep it up YouNoodle

TechFilipino

(We should do a recalculation to see if we increased our value)

YouLocator.com – find yourself

It’s as good as astrology.