N Reduce Opens Up As Alternative to Ultra-Elite Startup Incubators

5/14/12Follow @wroush

Maybe getting rejected by Y Combinator isn’t such a bad thing. For Jacques Crocker, Ash Bhoopathy, and Rich Lengsavath it turned into the beginning of a new adventure: alongside their own startup, called Lizi, they’re introducing a new, more open startup accelerator called N Reduce.

Announced on May 10 and known for less than a week as N Combinator (more on the name change in a second), N Reduce is a crowdsourced alternative to exclusive programs like Y Combinator, TechStars, or 500 Startups. Companies that get into such programs give up a small equity stake in exchange for mentorship, living stipends, and introductions to investors—but alumni uniformly report that collaboration and networking with the other teams is one of the biggest benefits of admission. The idea at N Reduce, which is taking applications now and gets underway formally on June 5, is to replicate that kind of mutual support on a Y-Combinator-style timetable—an intense 12-week session with weekly product shipping deadlines.

“Our friends in the YC program say the most valuable aspect of YC is the other YC companies—the collaboration and friendly competition where everybody strives to do more,” says Crocker, whose team applied for the summer 2012 session at Y Combinator but was rejected. “Since we loved the YC program so much, we said to ourselves that whether or not they accept us, we are going to flow through a program where we ship every Tuesday and collaborate with other people and have a demo at the end of the cycle. We realized, after we started talking with some other people, that they’d love to do this too.”

Crocker says more than 1,500 teams have already contacted N Reduce to express interest in joining up. With teams applying from around the world, the accelerator will be largely virtual, with most collaboration taking place online. But Crocker says that in startup hubs like San Francisco, New York, and Berlin, clusters of N Reduce founders will meet up every Tuesday night to hear speakers and exchange progress reports—just as they do at Y Combinator.

In fact, Crocker and his co-founders are patterning the new program after Y Combinator so consciously that for the first few days, the organization went by the name N Combinator. (The N wasn’t explained, but it’s easy to imagine that it stood for Not Y Combinator.) “The new name is a result of, basically, our YC friends who all told us ‘The idea is great, but we hate the name, it’s probably trademark infringement, and you’re going to get a [cease-and-desist] letter,’ et cetera,” says Crocker. “We don’t want to deal with that. It wasn’t really a serious name to begin with—it was kind of jokey.”

But the new name is still a geeky in-joke. YC founder Paul Graham has said that he chose the name Y Combinator because it refers to “one of the coolest ideas in computer science” and is also “a metaphor for what we do. It’s a program that runs programs.” Similarly, N Reduce has mathematical connotations. “N reduction is a way to reduce complexity in a function,” Crocker explains. “That fits our program pretty well, because we are distilling a couple of things from the most successful incubator programs and taking the things we think will work best.”

Crocker is a 2003 graduate of the University of Washington’s computer science department who says he has spent the last 10 years moving back and forth between Seattle and San Francisco, doing consulting work and Ruby on Rails development. His friend Rich Lengsavath is also a programmer, while Ash Bhoopathy is an MBA and designer. After collaborating on side projects such as DietPicture, a mobile diet tracking tool, the trio decided to cooperate on a bigger project that Crocker calls an “assistant in the cloud”—an automated personal agent. It’s reminiscent of Apple’s Siri, Crocker says, except that it runs on cloud servers, not directly on a smartphone, and it’s activated through SMS messages, not voice commands. “We are solving the problem of there being too many apps and too many programs—there are 200 apps on my iPhone and I can’t keep track of them all,” Crocker says. “You tell Lizi what you want and it just does it.”

Alas, the idea didn’t make the cut at Y Combinator during the accelerator’s spring round of startup interviews. “We only had 10 minutes to explain it to them,” says Crocker. “It sounded like we were close, but they didn’t quite buy it.”

Now the Lizi team will be looking to other N Reduce startup founders for support. Getting admitted to the program is simple, Crocker says: teams just have to demonstrate that they have developers on board. (That’s “to make sure it’s not just one business guy who doesn’t have an actual product team,” he says).

The hard part will start on the second Tuesday, when teams will be expected to show what new code or features they’ve added to their product. “Every week we will require everyone to check in online and give their status,” says Crocker. “What have you shipped, what have you learned, and what are you going to do next? The teams that don’t check in get on the ‘Did not ship’ list, and if that happens two weeks in a row we will talk to them and say ‘Hey, this is probably not going to work out.’”

The weekly check-in requirement will give startup teams a deadline to work against and the opportunity to get help overcoming obstacles, Crocker says. In addition to the online discussion, N Reduce companies located in startup hubs will meet face-to-face for pizza and beer once a week. The San Francisco meetings will likely take place at a coworking space in SoMa, and there will be separate meetings in the South Bay, New York, and Berlin, Crocker says.

The program will end in mid-August, around the same time as Y Combinator’s demo day, with a series of two-minute pitches available via webcast to media and investors.

“We want to make it clear to investors that it’s not easy to get through this program,” says Crocker. Because N Reduce teams must ship every week or face expulsion, “we’ve got to work a lot harder than YC companies do,” he argues. “It’s do or die. In that sense we think we have a lot more in common with the early days of YC, when Paul Graham preached this how not to die mentality. It seems like they have not had to worry about that for a while—it’s hard to imagine a YC company dying in its first year because they have so much investment. We are in a different situation, and we have to make the best of it.”

N Reduce certainly isn’t the first group to try tweaking the accelerator model Y Combinator pioneered in the Web and mobile industries. Organizations like Blueprint Health and Greenstart have veered away from the YC pattern by supporting startups in specific industries like healthcare and cleantech, for example. And other accelerators such as Rock Health, which focuses on health IT companies, have dispensed with the equity investment.

But all of these groups have retained a central element: mentorship from a network of investors and seasoned entrepreneurs. N Reduce will be the first to strip the model all the way down to its bones, emphasizing collaboration between the startups themselves. Crocker says the organization is already getting e-mails from volunteers interested in advising the startups, but in essence, N Reduce companies will be mentoring each other.

“Everything is going online—why can’t accelerators?” says Crocker. “There’s an ability to start a startup from anywhere in the country and have that support network. I think the end result is just going to be more startups, which is going to be better for the economy. It’s definitely an experiment, but our goal is to take a step in that direction and encourage a lot of other people to do the same.”

[Update 5/15/12: The saga of N Reduce's name and logo continues. In the Y Combinator Hacker News comment thread for this story, Crocker says in response to one commenter that the mathematical function referred to in the name is eta reduction rather than N reduction. Overnight, N Reduce has changed its logo and is now using the lowercase eta or η symbol---which looks enough like a lowercase N to justify keeping the name N Reduce.]

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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