Hacker News Reader

Comment by sdpurtill | Hacker News Reader

Hey guys, Sam from YouNoodle here. The research and development project behind this was the biggest of its kind ever conducted. If you want to learn more about predictive analytics you can read some of the well-informed recent articles about Startup Predictor.

Harvard Business Publishing: http://discussionleader.hbsp.com/anthony/2008/08/younoodle_i...

The Telegraph: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/...

American National Public Radio: http://tinyurl.com/625gva

Venture Beat: http://venturebeat.com/2008/08/07/younoodles-startup-predict...

We are listening to your privacy concerns and will be making changes to how we convey our measures to protect you. Realize you're giving us sensitive information and we take our role in handling that very seriously. Appreciate any further comments or feedback you guys provide as we are iterating fast on this.

View on HN

From the Harvard Business Publishing Article:

> "Before the 1950s, lending depended on the wisdom and judgment of loan officers. Then, a company called Fair Isaac developed a way to use four simple variables to develop a credit score that reliably predicted the risk of lending to an individual."

That is a very misleading analogy. YouNoodle is not the present-day analog of Fair Issac. This goes back to the idea that while it's very difficult to predict random events individually, you can predict them well in aggreggate. Fair Issac isn't really betting on customer X defaulting on a loan -- they're really betting on a thousand customers like X. Same with insurance premiums. A model won't be a great predictor of one person, but if you have hundreds of thousands of customers, you can have a much more accurate estimate. This is the law of large numbers. For a simpler example, you wouldn't want to bet on the outcome of a single coin toss, but it's a pretty safe bet that if you toss a (fair) coin a million times, the heads percentage will be very close to 50%.

Fair Issac played the game by lending to lots of customers. YouNoodle is trying to play this game for each individual case. They're bold enough to mathematically estimate the value of one individual startup, and say that they have some confidence in it. It's the analog of making a loan to 1 person, insuring 1 person, or betting on a single coin flip. Probability tells you this is very risky. VC don't make thousands of bets like insurers or banks do. For the bank, my individual outcome doesn't really matter to the big picture. VCs on the other hand invest in a very small number of startups - each startup matters.

I haven't used their site, and I don't have a startup to use with it (so if this is exactly what they do then I apologize), but a tool that states "20% of startups in your industry with similar circumstances succeeded. Here are some ways you can increase your percentage." and then shows different ways that a startup could increase its chances based on the statistical data would be interesting to me as a startup founder, and I think it would be helpful to VCs and others as a pre-screening tool for their investments.

Thanks for being a part of the discussion, Sam. As a startup founder, here are my privacy concerns.

-- I'd like internal details of my startup to NEVER be released without my knowledge (including ownership breakdowns, investment amounts, number of employees, strategy/expected launch date, revenue/traffic numbers, etc.), under any circumstances - even anonymously. (If you released info on a "video startup in Minnesota", but left out the name, that would be potentially be enough to be traced back to http://zencoder.tv.)

-- If you want to use my information in the aggregate, that doesn't bother me as much, and I understand that you may use information about my company as a part of your predictions.

-- Obviously, you should take data security very seriously and go above and beyond 99% of companies in this area.

-- I should be able to cancel my account with a click of a button, and this should remove all of my private information from your system.

These would make me comfortable with YouNoodle, and if I felt certain that you'd follow these standards, I'd probably try it out.

If you could make it a desktop application and store data locally I'm sure you'd have a lot more takers. I'm sure you want to use information from your users to improve your system -- so let people send in anonymized information (and let them see _exactly_ what's being sent and remove anything they're uncomfortable with).

I'm guessing it's unlikely you guys will do that. But if someone else does I'd be happy to try it out :-)

Reply on news.ycombinator.com