YouNoodle Makes Me Feel Much Better about My Finances
Here at SarahLacy.com you could say we're investing in the growth of the business. Think the User Generated Book Tour makes money? HA! My credit cards are wheezing from overuse. And the very talented Olivia certainly isn't volunteering, nor should she be. Combined with a new mortgage and an upcoming $10,000 electrician bill, Mr. Lacy is getting a little antsy about all the money flowing out of our accounts. YouNoodle just made me feel a whole lot better.
The new startup boasts an algorithm that crunches all kinds of data to tell you what your company will be worth in three years. SarahLacy.com will be worth...click for it....
...$21.6 Million according to the site. When told this my husband IMed back: w0000000000000000000000000000000000000t!
YouNoodle was started by Kirill Makharinsky and Bob "I always see Sarah in elevators and airports" Goodson. (A running coincidence that'd be borderline creepy if he weren't so British and charming.) They also employ regular SarahLacy.com commenter and all-around good guy Sam Purtill. I met all three while working on my book. Kirill was working at Slide and Bob was working at Yelp. (Sam was at a party.) They clearly impressed their PayPal mafia overlords because the dons-- Peter Thiel and Max Levchin-- both invested in YouNoodle.
I was surprised when Michael Arrington reacted so violently to the idea when the company launched several months ago, because I immediately thought it was intriguing when Kirill debriefed me one rainy day at Samovar Tea Lounge in San Francisco. In a Valley of constant me-too, over-engineered iterations on Facebook, Twitter and Digg this was a refreshingly new and contrarian idea. (Classic Thiel investment, of course.) As I say over and over again these days, the Internet is at its most powerful when it is disintermediating gatekeepers, so I love the idea of a free algorithm replacing a central part of the venture capitalists' job-- an industry that's famously described as an "apprentice-style business" and one that takes a decade to learn how to do well.
Of course, like Arrington, I was skeptical, because typically valuations aren't based on any real metrics. YouNoodle seems to be taking the right approach. The questionnaire focuses on the team, its experience and how long they've worked together and know each other. It asks questions to gauge the team's expectations: How much do they hope to be worth? What would they accept? And it scours the Net to asses buzz and attention (sadly, if this is any guide, that's probably where most of my value came from.) It asked if the company was generating revenues but didn't ask how much and didn't ask a single question about profits or business models. Sounds like a venture capitalist's due diligence to me.
There are a few cons. While the site is a simple idea and beautiful UI, it takes a good thirty minutes to fill out the questionnaire-- that's a long time to wait for a payback on the Net. And it asks a lot of personal information including your cell phone number, and details on everyone on your team including their personal emails. More than a few times I almost aborted because it felt too invasive; I can only imagine a stealth company worrying about privacy concerns. It also can make you feel like a loser the same way buying a house in San Francisco can make you feel poor. (ie: wait, you only have ONE degree and you've never started another company??)
Of course, that last one isn't an issue for serious entrepreneurs. It's not like VCs welcome you with hugs and cookies. All three drawbacks are obviously crucial for the algorithm to be worth anything-- but that's just the thing. For you to deal with them, it has to be worth something. And that's up for debate. I think it is, especially for startups outside the Valley who are trying to get a snapshot of their business and can use the social networking features to connect with investors and other potential team members. One-third of the way through my book tour, I'm realizing how much entrepreneurs crave community and reassurance and-- most of all-- just practical feedback and how much we take all that for granted in the Valley. I'm hoping some of the folks I've met with try out YouNoodle. Let me know what you think in the comments!
BTW: I mentioned the social network aspect. It's the least exciting
part about the site to me, because there are just so many other ways to
connect online. But one thing stuck out to me: When you clicked to
accept someone as a friend it shows a warning screen that asks you if
you really know them, and cautions you should only add people you
really know. In this day and age of cheap, forced virality, I
absolutely love this feature. I am rabid about only adding people on
LinkedIn or Facebook that I know, and that's why the sites are so useful
to me. I know so many people who feel obligated to add everyone, and
they all eventually wind up abandoning these bloated profiles
and declaring the sites unusable.
[NOTE: Yes, this is the post that got deleted when Vimeo crashed my computer and yes it was better the first time :( ]
