There is definitely a place for such a model in RI. We have the existing talent, magnets for new talent(Brown, RISD, JWU, PC to name just a few in the university category), experienced local entrepreneurs, and the capital. Our challenge is to create transparency into these assets and connect them appropriately. A successful model will utilize the unique assets and scale of RI.

I've looked at thee interesting models and know some of the people who run them.  I've met with a couple teams that came out.  I thought Slater was at the far end of the "you-don't-always-need-$10M" spectrum, but these models are as far out as possible!  They rely on incredibly large numbers of applicants and projects, with a high failure rate, but some exits.  I would think they would be HIGHLY dependent on the quality of the people promising coaching, both to get good applicants, and then to produce good coaching.  Seems like the money has almost nothing to do with it, right?  That's pretty much the thesis.

 The Slater Fund started with a low money, high touch thesis, but has been moving the other direction, funding fewer companies more deeply, and trying to attract great teams with that thesis.

That doesn't make me negative on the whole strategy -- I actually think it could be a clever way to attract a broad array of deals if executed correctly.

I'm wondering what the definition of success would be?

Thorne 

Thorne, good points. Definitely the ones that are furthest along, YC, TechStars, and SeedCamp, are about the people over the idea (YC so much so that they plan for the idea changing). The focus gets narrowed by demographic, all sub-30, majority @ end-of-college or immediately-after.

The money's only function is to make sure the entrepreneurs can pay their rent for a few months while they build and launch an Alpha version. So the added juice in the model is the support environment that the entrepreneurs get (and that they provide to each other). 

 I don't know that the failure rate is any different than a traditional venture fund. I think Slater has to be more choosy as you can make less bets, especially as you move up the investment level.  YC has had a string of exits via acquisition, and Techstars first batch saw 7 out of 9 get Series A funding. But the whole investment curve, from seed through to exit, is much smaller $.

One thing that we know out of entrepreneurial surveys is that people who start one company tend to start multiple ones. So with a high failure rate but low initial investments, these seed platforms are looking to recycle the failed teams into new launches. 

I think there's room for the YC model in any metro. The real benefit to startups participating in these programs, though, is not so much the money (though being able to pay for rent and food is nice -- I've heard that many teams in YC have stretched the money beyond 3 months by living frugally). The real benefit is in the culture -- working with other startups, getting mentoring from seasons entrepreneurs, listening to industry vets speak, getting access to future funders, etc.

That sort of thing would be great for RI.

I just blogged about Launchbox the other day, actually: http://www.readwriteweb.com/archives/launchbox_digital.php

like owen points out above, i think this conversation has alot in common with the conversation about co-working environments. the cambridge innovation lab, for example, not only provides space and support services to members, but also has been selected by a VC firm to manage their IT fund. and, like josh pointed out as well, the benefit is not just the money, but also the culture.

sally

@Josh. I agree that most metros could support a YC model. I think though that the YC model is much more relevant to PVD than it is to most other metros. This is because of our huge college student population - on a per capita basis one of the very highest concentrations in the country. Moreover our schools are particularly strong in relevant disciplines like design and computer science. We have just the sort of young entrepreneurial, innovative talent that a YC Model needs for fuel.

Offline, I've heard Allan raise the possibility of applying the YC Model not only to web startups but also to product companies, e.g. the next-gen bread slicer, the better mousetrap, etc.

Given our metro's deep resources in industrial design including RISD ID, Hasbro, and Item New Product Development, not to mention hundreds of other talented local individuals and organizations, I think this is an intriguing idea. And it's especially interesting at the intersection of info-tech & digital media and traditional industrial design. As so many more items become network-aware and web-available, it's an increasingly rich area in which to work.

I think the YC model (and other similar startup boot camps) is interesting.  I'd tend to agree w/ Thorne and others who've already weighed in here that the coaching staff is probably the greatest factor in having a successful program.  They can help draw interest from good candidates, but more importantly need to commit time/energy to screening and then actively mentoring participants.

Personally, I think it might be best when starting a program like this to focus on a particular sector even if broadly defined.  For example, both Techstars and YC seem to stick to software / web services.  I think if you have a range of participants from different sectors, it becomes harder for them to draw as many common insights from one another and you have to have a broader set of mentoring capabilities.

To clarify Jack's previous post, I've been wondering whether there is a "hook" for Prov/RI that draws more deeply on the successful entrepreneurs, academic resources, and potential corporate customers/partners that we have here.

One thing we are rich in is industrial design, and its extension into the digital and experiential realms. It's no secret that design is becoming a differentiator for the web (37 signals, flickr), consumer products (Dyson), electronics (Apple, B&O), housewares (OXO), retailers (Target) and so on. A question I've been posing is whether there is a "design centric" sector that

• plays to the strengths of local design-rich support resources
• is a rich vein for startups that can scale and have successful exits
• can prototype, launch, and show customer progress on small $ in 90-120 days

I agree with Lee that the concentration of the startups has to hold together, and it also has to match the investment and support constraints of the "seed platform" model. New medical devices or drug discovery won't work ! Web 2.0 companies fit the model well because the tools to launch them have come down so dramatically in cost, and you can prove the product out via this internet thingy.

I think Web 2.0 startups have become increasingly "design-centric"; is there another "design centric" startup theme that works, or not?

Interesting idea to apply the YC model to product companies... I imagine "personal fabrication" technology would make that significantly more viable in many cases. In this PBN interview from last February, Brian Jepson mentioned a joint project between the Providence Geeks, AS220 and The Steel Yard investigating inexpensive 3D printing technology. Does anyone know the current status of that?

Hi Matt,

Since this ties into the upcoming RI-Nexus event, I've replied to your question in a separate thread.

- Brian

Owen:  Yes, yes, and YES  not only is there a place for this in RI there is a need from 2 perspectives: keeping RI on the move to attract the all important "high paying technology" jobs we all here so much about but also to meet the nascent community coming out of our great educational institutions.  RI has so many benefits going for it; small size, we are talking about a distance shorter from border to border than SF to San Jose, lower cost of living than Boston or New York, great potential workspaces in reclaimed mills/warehouses, access to brilliant minds and capital, proximity to Boston and the entire eastern seaboard. 

Thorne to address your point and piggy back on Alan, I am not sure the volume needs to be all that different that the traditional VC model, how many "home runs" does a VC see per fund?  I would argue that if you have 2-3 home runs you are doing very well.  I would also suggest that the majority of the investments over the past 5 years are singles and doubles.  If you look at the model of YC success is defined as getting to the next stage, funding, acquisition, or in the rare case self funding from a revenue model.  Also I have yet to meet a VC that is searching for business plans to read; I heard an interesting metric that while it may have changed slightly over the past few years but the thinking is one out of 10 investments will be a success.  In fact currently funds are looking for creative ways to put money to work without expecting a home run return, look at some of the funds in Boston that have opened up part of their current funds as a loan facility on the level of typical angel investments   We are also seeing the true angel investor moving upstream so the question is how does a great idea get funded initially? 

I think if you read the original comments from Alan the point is the company never would have been started were it not for YC, and that is the group I think Ala is trying to reach.  YC does not depend on huge numbers, yes they may see a large pool of applicants but they are from all over the world and they work with only a few each semester.  I guess a question for you is how do you invest in a team or idea that has no revenue or product but you believe in and allow the founders to align themselves with investors?  Your comments seem to suggest that you only provide larger sums than a typical angel would.  From this I would infer that you are also asking for a large piece of the equity to manage your risk exposure.  I think what YC and others are trying to do is allow the team to still retain ownership in their idea but move the ball forward.

Jack and Alan you mention expanding into product companies, an interesting company to look at is P’Kolino  http://www.pkolino.com/index.php?main_page=about_us the company launched out of a semester of work between 2 Babson MBA students and several RISD students and a professor.  That was 2 years ago and they are still  going strong continuing to develop products and  grow as an organization. 

Philadelphia just got a "pre-seed" venture firm - DreamIt Ventures:
http://dreamitventures.com/

Philadelphia Business Journal has a story on them here:
http://philadelphia.bizjournal...

A few excerpts follow:

"Modeled on organizations such as Y Combinator in Silicon Valley and Boston, and TechStars in Boulder, Colo., it plans to raise a fund of $350,000 to $500,000 to provide eight to 12 teams of entrepreneurs with money and assistance to develop a prototype of a technology product or service over a three-month period."
"The three men are willing to put up the money for DreamIt's first fund but would like to get some economic-development money from the state and/or the city for it, and aren't willing to back future funds without assistance."

"The vision is that we'll have the public sources of funding and the private involvement to make this happen," Bookman said.
"The University City Science Center, Temple University, Penn State and 11 entrepreneurs and investors also have indicated their willingness to support DreamIt, Bookspan said."

Revelant Wall Street Journal article:

VC's New Math:Does Less = More?
Thiel Seeks to Change Old Habits by Investing Small on Start-Ups
http://online.wsj.com/article/...

What it's really like to be in YCombinator

This post lays it out terrifically

http://mattmaroon.com/?p=319

It appears that Vancouver just got a new Y-Combinator-style incubator: Bootup Labs.