
Startup that Predicts Success of Other Startups - kul
http://www.nytimes.com/2008/02/18/technology/18vc.html?ex=1360990800&en=b4de6ef1f784e0b7&ei=5090&partner=rssuserland&emc=rss&pagewanted=all
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pg
Though I know and like these guys, I worry they have set themselves an
impossible task. As someone who spends literally every day trying to predict
the success of startups, I know how hard it is. And worse still, in this case,
hard to automate: the success or failure of a startup depends almost entirely
on the personalities of the founders.

What makes the problem more complicated still is, founders can change. E.g.
when we meet someone who seems smart and energetic but a bit timid about
starting a company, we have to ask ourselves if the guy's intrinsically timid,
or just put off by the weirdness of the idea, like we were before we started
Viaweb.

~~~
ivankirigin
Silly idea:

1\. take every email exchange you've had with past YC companies whose outcomes
are now known. Good=bought, IPO, etc., Bad=no longer exists (with exceptions
for folks like Kiko?)

2\. train a bayesian filter on the set

3\. Apply to the rest with as yet unknown outcomes

4\. Publish the results :D

~~~
pg
We do plan to try this with the applications one day. I'm not super
optimistic, but it's worth trying.

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

Which makes me think have they run the software on their own company? But it
makes for interesting reading. A quick look around it appears to be
positioning itself as doing all things to all parties:

\- dating site for startups & engineers

\- business reporting (analysts) for VC's

\- euro-style-facebook for engineers & entrepreneurs

 _"... We provide business competition, event, networking and mailing list
functionality for real-world groups that support startup communities. For
investors, we're building technology to help inform their decisions. ..."_ [0]

Interesting to see Harj [1] there (with a low id) and ycombinator listed as a
Startup but not a direct competitor. [1] Is uNoodle trying to do too much at
once? There is another problem with this approach. Startups make new things
using Ideas so new that historical data points are no real predictors of
success. So how predict such Startups are going to succeed?

Make no mistake, though. The real target for these guys is to set themselves
up as middle men for VCs. Mini-blood suckers.

[0] <http://younoodle.com/about.php>

[1] Not very surprising due to the number of Oxford & Entrepreneur alumni ~
<http://younoodle.com/profile.php?id=23>

[2] <http://younoodle.com/group.php?id=74>

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ntoshev
"If it says we’ll fail, and it’s right, that’s something of a paradox"

It is a paradox only if you assume that the quality of the product makes or
breaks a company (not to mention their "AI" could be right only accidentally,
in this particular case). It is weird that they believe that, given that
"their algorithm uses sophisticated modeling pertaining to how social capital
and networks can affect an organization’s performance".

It's an entertaining idea, but I doubt how they got to score such a PR hit
with no substance whatsoever.

~~~
dkokelley
Good point. The product may be a success, while the company as a whole is a
dog. If their product works as well as it should, they should be able to use
it in reverse to tweak startups according to what the box says will increase
their chances.

Hmm. I see a world where VCs and other investors use "the box" to pick the
companies they invest in. I also see a world where startups use "the box" to
adjust their companies "box score" to present to investors. In the end, "the
box" may be a self-fulfilling AI system.

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xirium
This looks like a social network for entrepreneurs, many of which lack
programming ability and are seeking junior people who can implement the
technical details of their vision.

Coders: don't be fleeced of your valuable skills. If these people had good
connections, foresight, understood technology or valued programming then they
wouldn't "Need someone with coding skills" (
<http://www.younoodle.com/profile.php?id=989> ), be "on the lookout for web
design jobs" ( <http://www.younoodle.com/profile.php?id=16> ) or "have leet
skillz" ( <http://www.younoodle.com/profile.php?id=4> ). That's just the
founders' alumni ( <http://www.younoodle.com/group.php?id=2> ).

~~~
sharpshoot
hmm, if this was true then why do you see members like
<http://www.younoodle.com/profile.php?id=288> (Founder of HotorNot)
<http://www.younoodle.com/profile.php?id=557> (Partner in Founders Fund)
<http://www.younoodle.com/profile.php?id=11> (CTO of Yelp)
<http://www.younoodle.com/profile.php?id=455> (CTO of Mochi Media &
contributor to pylons)

Do these guys fall under the 'entrepreneurs, who lack programming ability who
are seeking..."?

~~~
xirium
Hey! Quote fairly. "many of which lack programming ability".

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

Ridiculous. One of the silliest things I've ever read in NYTimes. Kedrosky was
being way too kind on them.

As for their algorithm, it's probably along the lines of how connected you are
on their site.

How did they score funding from Max Levchin? One of the cofounders worked at
Slide. <http://younoodle.com/about.php> So I doubt it's due to their amazing
AI alone.

It's just a social network, folks. You can make your own on Ning or Facebook.

A better predictor would probably be someone's comments here on N.YC.

~~~
icky
> A better predictor would probably be someone's comments here on N.YC.

Don't you mean, someone's _karma_ , nickb? ;-)

~~~
nickb
No. Definitely comments :).

~~~
yters
And the best comments are recursive.

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Frocer
If they just predict every start-up to fail, statistically, they would be 90%+
accurate :P

Predicting the success of a start up is probably just as hard as predicting
where the market is going to go tomorrow (if not harder). There are too many
variables in play. I think this is just a PR stunt; it definitely created
enough buzz!

~~~
rrival
Funny =) Article says 90% aren't home runs - I'm curious: what's the expected
rate of profitable exits (non-loss exits)? Is there enough activity in the vc-
backed space / volume in the startup space to classify investments in tech
startups on a mutual fund-like scale of risk vs growth expectation or is
everyone, to massively oversimplify it, playing roulette hoping for another
google?

~~~
Frocer
I read that 1 out of 10 VC-funded start up succeeds, on average. I am assuming
"succeed" means profitable exit.

Activity wise, there certainly are enough data to pull a reasonable sample
size to create a model. However, the tricky part is to identify the right
variables. In my opinion, unlike the stock market, the variables to start-up
success is much difficult to quantify. Would love to see their theory behind
their model though!

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rms
I think they made a social network for startups and investors that has this
clever hook about predicting success.

~~~
wumi
something potentially useful for many of the HN users

------
Shooter
Look at that pile of uneaten dogfood!

~~~
andreyf
?

~~~
Hexstream
<http://en.wikipedia.org/wiki/Eating_one%27s_own_dog_food>

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redorb
I think their PR firm is the real news! Getting them on the nytimes homepage.
bestpr.net is them.

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edw519
“So far, we haven’t run ourselves through it,”

Then why should anyone else?

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dshah
They really lost me with this claim.

I have a hard time believing that anyone that would build such a thing could
resist running it on themselves.

I don't know these guys, but if it were me:

Run software on self. It says I'm going to fail. There's a bug in the
software! Tweak, tweak. Run software on self. It says I'm going to fail.
There's a bug in the software! Tweak, tweak...

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herdrick
Sounds very bogus.

~~~
jamiequint
Its as bogus (or not) as you believe statistical machine learning is.

~~~
davidw
There are plenty of things that are not bogus at all, but are very bogus for
given applications.

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tyohn
ummm, they have seed funding? Amazing! If there is one thing I know its that
you can't predict what passion can and will accomplish. I've been coaching
gymnastics for over 20 years and I've come to realize that people with heart
can and do beat out the most talented, accomplished, educated... "sure
winners" time after time. If they've found a way to predict talent and passion
I'd love to see it. And of course if your team "gels" - the whole can be much
more than the sum of the parts. I'll try to keep an open mind but just look at
the Superbowl - who won... And if its possible to predict the success of a
business - they really wouldn't need startup funding - they could just play
the stock market. p.s. - if this is a simple case of marketing/PR - Good Job
Guys...

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eusman
if this worked why make it public and not use it for them selves?

doesn't everyone know failure feed success? So them problem is more how to
increase your chance of success, not tell you Yes, No if you will succeed

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motoko
Ok, so they're trying to be like a hedge fund for startup companies.

With what data are they building their models?

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yters
Something like this could be a self fulfilling prophecy. Then the momentum
would just build.

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jsjenkins168
Can someone with a login please copy the contents of the article?

~~~
aneesh
Get your own login. NYT is free & doesn't spam you.

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jamescoops
the AI thing is really good linkbait im amazed so few people spot it for what
it is

