
Will YouNoodle Predict Its Own Inevitable Failure? - nickb
http://www.techcrunch.com/2008/02/18/will-younoodle-predict-its-own-failure/
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vegashacker
_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._

This is a bit unfair. It might be that their software isn't a perfect
predictor, but just improves the prediction powers of a human VC by some
amount. Their publicly available software, then, might be the company's
bootstrap. Once they make enough cash to invest _and_ ride out the swings,
they can do (approximately) what Arrington is saying.

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gojomo
Also: even if you could create an excellent predictor with the right inputs, a
tiny startup wouldn't be able to collect the inputs -- including
inside/detailed info -- all by itself. So starting as a service to the people
who can demand such info (investors) makes sense -- and if it works, _then_
they can "raise a fund themselves and beat the tar out of" the old guard.
That's how it usually works in finance -- prove yourself first in the service
of others, then once you have a track record, run your own show.

~~~
jyothi
Totally agree. A pitch as a service to provide data points makes so much more
sense - provide contacts, connections, past track record, competition profile,
team profile, current user base, marketing efforts etc.. would be excellent.

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jyothi
Just to pick brains. 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_...](http://en.wikipedia.org/wiki/Type_I_and_type_II_errors#Type_I_and_type_II_errors))

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

#2 Prediction: success Result: failure false negative [speculated reality?
pun-intended]

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

#4 Prediction: failure Result: failure true negative [It failed, but hey AI
worked then, hmm.. whats the point]

There is no good position except the rare event of a true positive. Banking on
rare events isn't bad but, thats the fun of startup, isn't it?

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fiaz
First step in building a successful ANYTHING: make sure your product works!
They are claiming to possess algorithms that are able to predict the success
of a given startup. I'm curious to know how many startups they have
successfully invested in that they have developed algorithms against.

I would imagine PG would be in a better position on MANY levels to write
something like this, if possible. Indeed if such a thing were possible, I
would imagine there would be some serious PhD research in this area.

I find it funny that this got as much initial positive press as it did whereas
programs that can predict the stock market reliably (a much simpler problem
given the relatively controlled/closed system of any given market compared to
the virtual chaotic environment of a startup in the wild) are often passed off
as snake oil in many circles. Taking this problem alone (automated trading
programs) there are multi-billion dollar investment firms that spend millions
on teams of developers and PhD working out formulas and algorithms to crack
this problem; I know from personal experience that these systems are only good
for a few months and are constantly changing. This fact alone diminishes the
predictive value of whatever algorithms they have developed over time...

If two 20 somethings have something that groundbreaking that does NOT require
constant tweaking (unlikely) then they must have discovered some new
mathematical property governing human decision making at a large scale (even
more unlikely).

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akkartik
<nit/rant>

 _"..there would be some serious PhD research in this area."_

PhD research? I think you mean just 'research'. PhDs aren't the only ones
doing research in this world. Neither are they the ones doing the 'hardest' or
'highest' research. Academia is just a different community from that of
founder/VCs, or writers, or movie makers, or chess players. It has its own
language, its own jargon, and its own objective functions for assigning value
to work. But it's not more 'research-y'.*

'PhD research' means 'research work for which the audience is in academia'.
The way it's normally used, one can just drop the first word without loss of
meaning. Just like in the phrase 'personally believe' that William Zinsser
picks on. ([http://www.amazon.com/Writing-Well-25th-Anniversary-
Nonficti...](http://www.amazon.com/Writing-Well-25th-Anniversary-
Nonfiction/dp/0060006641))

</rant>

* - Nor is it more open anymore, with all the emphasis on open software in industry, and the increasing commercialization of academic projects.

~~~
fiaz
Yes good point, you are correct. I poorly worded that comment; thanks for
making the distinction.

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redorb
I bet this program does better at picking success than techcrunch.

~~~
icky

        import random
        print random.choice(('yes', 'no', 'maybe', 'outlook hazy',))

~~~
marcus
I thought all VCs used a magic 8ball as standard divination tool.

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marcus
If they really wanted to create value through AI prediction of success based
on social connections, they should have leveraged LinkedIn Accounts instead of
trying to create a new social network.

A lot of people already have their network in there so the barrier to entry
would be a lot lower.

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imgabe
Wouldn't their prediction necessarily affect the outcome? Even more so if they
intend to market it to investors. If they predict startup X is going to fail,
and this prevents people from investing in Startup X, then it's more likely
that Startup X will fail. On the other hand if they predict that Startup Y
will succeed, and Startup Y gets a lot of press coverage and interested
investors because of that, then they helped it happen. It's kind of self-
fulfilling.

In order for them to prove that their algorithm is really accurate, they'd
have to make the prediction and keep it secret, then see later if it came true
or not. Of course, that doesn't really make for a marketable service...

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wallflower
Does anyone else think YouNoodle is a name that is almost a prank?

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ivankirigin
The snark level of this post is off the charts.

