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2/1/2013
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Ship Ahoy: Inside Blueseed's 'Googleplex Of The Sea'

Blueseed's "Googleplex of the Sea" for international startups and entrepreneurs has a waitlist of more than 350 companies and 1,100 workers who want to come aboard.

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It's not easy to build a boat that goes nowhere. It's downright difficult when that boat must safely harbor 1,000 entrepreneurs.

Such is life these days for CEO Max Marty and the team at Blueseed. The company plans to build a cruise ship that serves as a floating office park and housing complex for technology startups and other entrepreneurs. Once complete, the boat will sail 12 miles off the coast of northern California and drop anchor in international waters, where its tenants can legally live and work on their startups without a United States work visa.

What might sound like a Silicon Valley reverie has generated serious interest since its inception. Blueseed, itself a startup, is about halfway through a seed round of financing that has recently attracted capital from Mike Maples at Floodgate, Trevor Kienzle at Correlation Ventures, and Chinese investors. Blueseed's waitlist counts more than 350 companies and 1,100 people -- representing 67 countries -- who want to hang their shingle at sea. Software and IT services firms top the list of would-be industries on board.

[ For more on Blueseed's innovative floating office, see Blueseed Builds Floating Office For Tech Startups. ]

Like most viable new ventures, Blueseed initially set out to solve a market need. H-1B visas must be sponsored by an established employer; there's no equivalent "entrepreneur visa" for non-U.S. citizens who want to found a startup on American shores. Yet Silicon Valley has retained its powerful allure for technology and other growth-minded startups, in part because it remains the epicenter of the venture capital community. If you want to found the next Google or Facebook, you move to Silicon Valley; Blueseed touts a 90-minute commute to the heart of it. Residents need only a valid B-1 visa to conduct many kinds of business on the mainland, such as meeting with prospective investors or partners (B-1 visas prohibit employment).

But a fascinating thing occurred as Blueseed's waitlist grew: Nearly 25% of the interested companies are already based stateside; U.S. companies make up by far the largest segment on the list. The second-largest, India, accounts for just under 10% of future Blueseed occupants.

"It was a bit of a surprise," Marty said in an interview. It turns out the visa issue that spawned Blueseed is more of a "check box" than something driving excitement for the project. "What really inspires them to want to be on board is the environment itself, the internal community [and] other people there that they will have access to. Entrepreneurs have an adventurous streak, and there is a sense of adventure in living in a community 12 miles offshore that's geared toward startups and their success."

There might be another, more practical reason driving interest from American entrepreneurs: Bay Area housing costs. "We've turned away a lot of people who want to be on board despite not being a growth-stage startup, and that's kind of an interesting surprise," Marty said.

Blueseed's business model includes a small equity stake in each of its tenant companies. As a result, it's interested in only the kind of high-growth firms that tend to attract venture capitalists and angel investors. "They just want a place that they can afford to live, and the cost of living here in the Bay Area is skyrocketing," Marty said of some of the prospective occupants he's had to turn away. Blueseed's rent is a relative bargain by Bay Area standards, roughly $1,600/month per person for both residential and office space on board. Blueseed has also turned down several companies in the general category of "financial services" because it wants to avoid any appearance of impropriety, given its maritime location.

Building and staffing a boat that will house more than 1,000 people on an ongoing basis is not for the meek. There are a host of operational, financial, governmental, and other hurdles to clear between now and the ship's target launch in spring of 2014. To get there, Marty said Blueseed will work with a diverse list of partners and vendors that specialize in areas such as cruise ship hospitality and ferrying people between ship and shore. "[These] are things that we're looking to work with the best in the business [on], so that we can outsource it," Marty said. "If we had to actually put together a lot of the logistics [ourselves], it would be impossible to launch within a year. There's too much to deal with."

There's also Blueseed's own growth chart to consider. Marty noted that even fast-growth startups typically expand according to a plan over time. Blueseed, on the other hand, will need to go from small to large practically overnight.

Which night is the pressing question. Of all the moving parts and pieces, the major milestone will be putting down a sizable -- and nonrefundable -- deposit on the lease of a 1,500-person cruise ship, which must be done 90 days before Blueseed wants to set sail. But if it's not ready to take delivery -- and take paying tenants on board -- when the boat's ready, it could cause the firm significant financial trouble.

"It's such a nexus of complexity to put together an organization like this," Marty said. "We have to jump over a chasm from being a small business to being a substantial business."

As with many high-tech startups, funding will be a key to bridging that chasm. In Blueseed's case, it's tougher to come by because of the unique nature of the business. "There are a number of VC firms [where] it's just not in their mandate to invest in companies like this, and unfortunately they just can't," Marty said. "We have to find the right sort of investor who has a much better position with her [limited partners]."

And then there's everything else, including a litany of inquiries about everything from broadband access to seasickness to safety. Blueseed's website FAQs deal with, among other concerns, the potential for natural disasters and pirates. (Rest assured, matey. The pirate threat 12 miles from Half Moon Bay, Calif., is minimal.) Addressing those questions and issues is all part of the planning and execution of an unorthodox business idea. The Silicon Valley culture adds an extra X factor to the equation.

"A remarkable number of people ask about wanting to bring their pets on board," Marty said. A pet owner himself, Marty initially resisted the idea because it sounded like a logistical nightmare. ("We'd have to make sure we have enough space on the lifeboats," he said.) But the sheer volume of requests and a growing number of pet-friendly workplaces in the Bay Area, such as Google, have forced him to reconsider. Blueseed is now investigating the feasibility and safety of allowing residents to bring certain animal breeds on board.

"I am taking it quite seriously," Marty said. "It's really about creating that culture that feels like Silicon Valley, and that's now part of the culture."

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SMB Kevin
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SMB Kevin,
User Rank: Apprentice
2/8/2013 | 3:28:36 PM
re: Ship Ahoy: Inside Blueseed's 'Googleplex Of The Sea'
Lorna, your shipbuilding instincts are sharp. Blueseed's CIO Dan Dascalescu sent an email to clarify: "Since constructing a ship would be an affair on the order of $200M, we are going to start lean by leasing an existing cruise ship with a capacity of about 1,500 passengers. We plan to be in the water by Q2 next year."

The story has been updated accordingly.

-Kevin C.
InformationWeek.com
jc
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jc,
User Rank: Apprentice
2/4/2013 | 8:13:35 PM
re: Ship Ahoy: Inside Blueseed's 'Googleplex Of The Sea'
Very interesting concept for start-ups who employ foreigners. It might be fun to work out there but I'm disappointed it looks more like an office park than a cruise ship.
lgarey@techweb.com
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lgarey@techweb.com,
User Rank: Apprentice
2/4/2013 | 3:37:28 PM
re: Ship Ahoy: Inside Blueseed's 'Googleplex Of The Sea'
It only takes 90 days to build an entire cruise ship? That's much faster than I would have expected. Fascinating concept though. What's the waiting list like for journlists who want to visit?!
Lorna Garey, IW Reports
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