The idea behind the algorithm is that even if the memory requirements of the Scrypt algorithm used by Litecoin were adjusted, there would always come a time when it would not be high enough to render ASIC development impossible. Since this issue must be dealt with from the start, Scrypt-N is a perfect solution. Scrypt-N relies on the “Adaptive N-Factor” in which N is the memory required to complete new hashing functions.
The idea is that N (memory requirement) will always increase over time, rendering ASIC development unfeasible. A coin with an adaptive 'n' factor usually starts at '11' , and stating it is adaptive that means that over time usually specific to a future unix time stamp it will become '12' , '13'... As it increases the amount of memory necessary to 'mine' the coin increases....quickly.