Today, the social networking and startup predicting site YouNoodle announced the release of its list of 25,000 startups, ranked by popularity based on social and news media traction. The company is exhaustive in the sources it draws on, but just about everyone I talked to was cautious and skeptical that such a list will actually contribute to wiser funding.
The company’s implicit assumption is that the amount of social and journalistic buzz a startup gets is roughly equal to success. A number of people pointed out to me that hype is, of course, not the sole predictor of whether a company will do well. But then again, certainly reputation and word-of-mouth has an influence on who gets invested.
The founders stress that they don’t intend to be a crystal ball, but more of a guideline for investors. YouNoodle’s ‘startup predictor, released last year, was met with scathing skepticism, though several sites, including Tech Crunch, ended up admitting it was fairly accurate retrospectively.
I wouldn’t be surprised if YouNoodle scores turn out to be popular—rankings are often fun and interesting to look at and I think founders and investors would check their companies’ scores, at least out of curiosity. Whether it does turn out to correlate to better funding decisions, we won’t know for a while.
For more information on the company and startups that made it to the top of the list, see my full news article, A Startup Popularity Poll at TechnologyReview.com.
“The company is exhaustive in the sources it draws on, but just about everyone I talked to was cautious and skeptical that such a list will actually contribute to wiser funding.”
Interesting point. The whole thing is a little strange to me, but in the end, I will be amused if YouNoodle ends up reaping most of the benefits (even if it is just for a short spike). I’m no day trader, but I suspect the fact that YouNoodle even makes these claims will help them out in the short run.
As for the long run? Let’s see what happens. YouNoodle could be right, they could be wrong, or (and most interestingly to me) they could be partially right. Consider crowd theory. Could/Would people follow YouNoodle’s predicted trends just because YouNoodle predicted them in this way?
That’s a good point! Would a high or low score be somewhat self-fulfilling? I think that might only be the case if YouNoodle scores were really widely regarded and influenced investors’ decisions.