Are YouNoodle's Startup Valuations Worth Anything?

Are YouNoodle's Startup Valuations Worth Anything?
Because SitePoint is home to the Marketplace, one of the web’s leading places to buy and sell web sites, startup valuation is something that we’re very interested in. Today, a new valuation tool launched called the YouNoodle Startup Predictor that gives predicted startup valuations three years out. How do they do it? And are the valuations worth anything?

YouNoodle’s main business, according to the About page, is providing a platform that helps entrepreneurship clubs to “manage business competitions, events, mailing lists and community development.” YouNoodle has deployed their tools to clubs at over 50 universities. The site is also building a social network for entrepreneurs, and their first public tool is the much-hyped “Startup Predictor,” which predicts startup values 3 years into the future.

“This is the first time technology has been used to help manage risk and predict growth for early-stage companies,” said YouNoodle CEO and co-founder Bob Goodson in a press release. “For more established companies, quantitative, systematic decision-making for investors is standard – using technology-driven credit rating services such as Moody’s and Standard & Poor’s. But until now, no similar system has existed for companies in their earliest stages.”

But does it work?

I put the Startup Predictor through its paces using information from my small network of Ruby on Rails community sites. The YouNoodle tool asked a long list of questions about the company (we’ll use that term loosely at this point) and its founders, digging very deep into the educational backgrounds of each founder and how long we’ve known and worked with each other. There were some oddities along the way.

For example, it asked if our company, called Railsify, was incorporated. It’s not. But then when asking for the titles of each founder it gave us pre-defined options that didn’t really fit the bill — we call ourselves co-founders, we have no officers. Later, it asked for information about the founding team, but only gave space for three founders — Railsify has four founders. Lastly, it analyzed our web site’s traffic and online buzz based on the name and URL for Railsify. The problem there is that Rails Forum is our most prominent product and receives the lion’s share of the network’s traffic and buzz. It never asked specifically about our products or other web sites.

Are YouNoodle's Startup Valuations Worth Anything?

In the end, YouNoodle predicted that the little network of sites that my friends and I have built in our spare time would be worth $1,530,000 by August, 2011 and gave us a “YouNoodle Score” of 188/1000. I think that’s a valuation that we’d be pretty happy with, but how did YouNoodle come to that conclusion?

According to VentureBeat, YouNoodle puts a lot of weight on its algorithmic analysis of the founding team — their educational background and previous startup experience, their connections to one another, and how much work they put into the new company. YouNoodle uses “social network theory” to assess team dynamics and delivers a score that essentially shows the strength of the founding team.

A couple of days ago, TechCrunch put some well-known startups through the predictor and found the results mixed. For some, it was way off, but for others it was on the mark — the law of averages would dictate that that’s bound to happen, though, if YouNoodle was just spitting on random valuations.

Both TechCrunch and VentureBeat think that the tool does a pretty good job of evaluating founding teams for comparison purposes — it thinks that Slide has a better founding team than RockYou, for example, even though the valuations were way off. That’s something that post-money valuations at both companies have born out (if that can be used as a good measure of the strength of the founding teams).

However, as Mike Arrington writes at TechCrunch, a good VC could probably do just as well at evaluating startup teams as the YouNoodle algorithm. Goodson hopes that startups will use their YouNoodle score as a key part of their pitch to VCs, but any founding team that’s strong enough to get a score worthy of using in a VC pitch is probably one that any investor worth his or her salt will already know is strong without the YouNoodle score.

YouNoodle is based in San Francisco, CA and is funded by Peter Thiel, The Founders Fund, Max Levchin, and other angels.

Replay

Category: news Time: 2008-08-08 Views: 0
Tags:

Related post

  • Are third party bundle deals worth it? 2013-12-03

    I was thinking of buying a Canon EOS 70d and when I was shopping around found a bundle offer with many accessories and lenses for what appears to be a fairly cheap price. I don't know anything about lenses though and the lack of reviews makes me susp

  • Are DEMO and TC50 Really Worth it for Startups? 2008-09-09

    Last year, I was writing for a publication that covered both the DEMO and the TechCrunch50 conferences. At each, half a hundred startups or more launch, and covering them is a hectic affair - very often the best end up slipping through the cracks whe

  • Where are bash profile startup files? 2010-09-13

    I know that you can have a .profile or .bashrc file in your home folder to customise Mac OS X 10.6.4 Terminal bash startup. Every time I start up Terminal, there is a line that tells me "You've got mail". I am trying to find where this line is s

  • how to identify and change apps which are set as startup items 2011-04-27

    I am coming from Windows back-ground (never used Linux), and HTC Wildfire is my first Android phone. I can see that many app like Facebook for HTC Sense, Flickr, Footprints, Friend Stream, Gmail, Peep, Stocks and many more as start-up apps. How can I

  • Are RSpec and Cucumber really worth it? 2011-08-29

    I know most RoR programmers are testing addicts and I understand the advantages of a large testing suite but when I start testing, I never get such a large suite and I always wonder "Am I testing the right way? Are there really efficient?". I'm

  • Seeing what files are run at startup (linux) 2010-04-05

    How do a check what startup scripts are run after I ssh into a machine? --------------Solutions------------- In a nutshell.. System wide with RHEL/CentOS, the initialization scripts are contained within /etc/rc.d, which is System V style initializati

  • Why are user-specific startup items starting for all users? 2011-09-22

    On my Win7 machine I have a number of programs in my user's startup folder ("C:\Users{USER}\AppData\Roaming\Microsoft\Windows\Start Menu\Programs\Startup"). A few of them like ZumoCast and OpenDNSUpdater pop up at logon asking for login info. I'

  • postfix- are these connects in the log anything to worry about? 2012-09-10

    I am noticing the following in my maillog. Lots of these: Sep 10 10:29:56 westc01-01-01 postfix/smtpd[26788]: connect from unknown[85.111.7.182] And these: Sep 10 10:34:58 westc01-01-01 postfix/smtpd[26768]: disconnect from unknown[85.111.7.182] Sep

  • How can I make sure that my two USB disks are mounted at startup? 2012-10-03

    When I start my ubuntu server, my two USB hard disks are typically not automatically mounted. However, if I unplug the disks and and plug them back in, they're detected and mounted. How can I ensure that they are automatically mounted at startup? The

  • Applications in the Menu Bar & The Ability to choose which are Active upon startup? 2012-11-25

    Are the applications located towards the right side of the menu bar next to system icons automatically active upon boot up of an apple mac. What decides which apps sit there & is there a way to choose which apps are active and sit in the menu bar by

  • Application Icons In the Menu Bar & the Ability To Choose Which Are Active Upon Startup of my Mac? 2012-11-26

    Are the application icons located towards the right side of the menu bar next to system icons automatically active upon boot up of an Apple Mac. What decides which apps sit there & is there a way to choose which apps are active and sit in the menu ba

  • Where are logon and startup scripts for graphical settings located and how are they managed? 2013-01-21

    Where and how are the Ubuntu equivalent of your personal Windows configuration stored? Something akin to HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Run as well as the Start Up menu. I have spotted the System --> Preferences --> Star

  • Where and how are logon and startup scripts for graphics desktop managed? 2013-01-25

    Where and how are the Ubuntu equivalent of your personal Windows configuration stored? Something akin to HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Run as well as the Start Up menu. I have spotted the System | Preferences | Startup A

  • Which applications and programs are vital at Startup? 2013-05-05

    The following applications from below are in my list of Startup. Which one of them are strict necessary for the system? How can I remove those not necessary from Startup (but not from my laptop)? AT-SPI D-BUS BUS Backup Monitor Bluetooth Manager Cert

  • How to find drivers that are loading on startup? 2013-06-27

    How can I find what drivers are being loaded on a Windows 7 x64 startup? I've seen a couple apps that show what programs are being run via registry entries and Startup folder, but I'm not sure how to see what other drivers are being loaded, in order

  • Used iPhone 3G 16G - Worth anything? 2014-03-15

    I currently have a an iPhone 5 64GB I am using and a iPhone 3 16GB I am not using. Planning to upgrade to the iPhone 6 when it comes out later this year. I've heard Apple will give you cash off purchase for trade in. Does anyone know what they might

  • Are netbook cooling pads really worth it? 2011-02-04

    I'm tempted to work with a cooling pad at home, since my netbook is my primary computer, and if you are following my questions I plan to buy a dual core netbook that I'll use as desktop most of the time. I want to assemble a little workstation and I

  • Photoshop CS5 Panels, extra ones are open on startup 2011-07-09

    I'm trying to set up a workspace in PS CS5. I create a new one, and set it up how I like, and as there's no explicit save option, I assume it saves on change/on exit. Which is fine, but on starting Photoshop again, it'll open the ones I saved, and so

  • Reorder the way in which scripts are run at startup 2011-10-21

    I just moved to debian squeeze and need to change the startup sequence of some scripts. I used to do this with update-rc.d service defaulta xx xx but now with the LSB way of doing things the update-rc.d method does not change the order. I need to sta

iOS development

Android development

Python development

JAVA development

Development language

PHP development

Ruby development

search

Front-end development

Database

development tools

Open Platform

Javascript development

.NET development

cloud computing

server

Copyright (C) avrocks.com, All Rights Reserved.

processed in 5.140 (s). 13 q(s)