Sam Bhagwat, CFO of Blueseed (www.blueseed.co) recently sat down with me in order to update me on their process of building their unique start-up.
The Blueseed concept is meant to fill the enormous gap between economic growth through entrepreneurship and the challenges of navigating the current US visa system. By giving entrepreneurs access to the Silicon Valley network without visa restrictions, Blueseed will stimulate innovation around the globe while facilitating the entry of new innovative growth companies into the US economy.
Sam is a Stanford graduate with a global business perspective, a passion for the Seasteading movement (http://en.wikipedia.org/wiki/Seasteading) and a commitment to eliminating barriers to accessing American innovation.
Sam’s parents know firsthand how challenging it can be to navigate the US immigration system. After completing his PhD at Penn State, Sam’s father went home to India for a visit. While he was home, he was informed that he would not be able to return to live and work in the US. Sam’s father made a 5am marriage proposal over the phone to Sam’s German mother (His girlfriend at the time) who was living in the US and the rest is history- Sam assured me that despite the dramatic proposal, his parents are still together and are living “happily ever after”. Sam remarks, “Quite possibly the US visa system could have resulted in me not being born!”
Blueseed wants to see if it can change situations like Sam’s father. Blueseed aims to be a visa-free start-up incubator. The start-up plans to have a ship 12 miles off of Half Moon Bay, California to host entrepreneurs from all over the world.
Many entrepreneurs with great tech ideas have a hard time securing the necessary visas to live and work in Silicon Valley. Typical US visas are not designed for international entrepreneurs; they are more geared to company employees (as in the common H1-B visa).
Read on for more of my interview with Sam:
Alex: So how did you get involved with Blueseed?
Sam: In 2008, there was the first Seasteading conference. The idea of building communities on sea sounded really cool to me. So I started getting involved in the Seasteading movement. I got back from a two-year mission to India in 2010. Once back I got in touch with Max and Dan (who are also involved in the movement- http://www.blueseed.co/about-us.html).
Seasteading is a far off idea. There’s this vision of the future, but it’s not much of a concrete plan. How do you get from where we are now to where these things would be viable? Blueseed struck me as something that is a viable way to start this new environment. It solves the ‘where does the money come from’ problem for global entrepreneurs.
Alex: This is a very big, and unique, undertaking. What were some of the first milestones that took it from a concept to a real project?
Sam: There are several milestones that all are happening simultaneously. When people came online to our website and they filled out a detailed survey, saying that they would want to come onto Blueseed, when they would like to move onto Blueseed, and how they would be able to pay for their stay on Blueseed. So far we have received over 120 applications (start-ups), which equates to about 500 people. That is a big milestone, which has only developed over the last 6 months. We could fill half the spots if all those people came on the ship right now.
Alex: Where is the project at right now?
Sam: We’ve closed our pre-seed funding round. We are building the customer base, reaching out to the people who might be interested; we are searching for the necessary knowledge that we are going to need to build this project. Blueseed is in the intersection of a number of different spheres. There is the visa situation, the maritime law situation, being 12 miles offshore plus, what kinds of laws are applicable on a cruise ship? There is the entrepreneurial space both looking at the kind of start-ups that we want on board and what kind of people are interested in that, and then how do we take that and create a community on board. If you think of colleges, how do we create a cohesive dorm? There is a whole cultural aspect. There is the engineering side of it, we need to find the right type of ship, and we need to make sure it’s steady.
Alex: What is your time line?
Sam: We are fleshing out details over the next 6 to 9 months and then we are planning right now to launch in Q3 of 2013. A lot of businesses have the opportunity to start small and iterate. Unfortunately that is not a luxury that we have. Either we have a cruise ship in the water or we don’t have a cruise ship in the water. We are making sure that we spend an extra amount of time in order to flesh out all of these details so that we are ready to raise the money to buy and retrofit the cruise ship.
Alex: What is your strategy for raising the money?
Sam: There are several avenues that we are exploring at the moment. There is the normal strategy…where you are giving away equity in Blueseed in return for funds. We are also considering the possibility of raising a venture fund. There will be many start-ups on board; we would be taking equity positions in each of these start-ups. So we are exploring the possibility of raising the money up front, then returning our investors the portion of equity that we would be taking from the start-ups onboard.
Alex: At the presentation (about Blueseed) that I saw, it was interesting because half of the people were very skeptical and laughed, and the other half were really pumped (excited) like me. There will always be skeptics, so what is it going to take to minimize the skepticism?
Sam: One of the great things about entrepreneurs is that its not really important how many skeptics you have, its important how many customers you have. The main thing we need to do is find people that are interested in this idea and willing to partner with us.
Whenever someone has a big new idea that has never been done before the natural response is skepticism. One of the big things for us is all of the media exposure that we have gotten. The fact that we have been generating both enthusiasm and skepticism to us is almost a marker itself. There’s the continuation of these start-up surveys, we take that as people showing interest in our project. As we talk to these people, develop relationships with them, know them and know that they are going to come on board, that convinces us.
Obviously the big statement is going to be when the ship is in the water. When it is profitable, when we have all these cool start-ups on board. When people see a start-up that is on Blueseed hopefully become the next Facebook or Google…we’d settle for the next Zynga. As people see it in the water and see that it is a successful project and atmosphere and environment, and a cool place to live and as they come on board and see the kind of people that are there. That is the best way to win over the skeptics.
Alex: What are you going to do about a boat full of guys?
Sam: Good question, there are several avenues. We are making a proactive effort to partner with Women 2.0, and other similar organizations because it will be really important to build a community that is diverse. It’s the same on the ship as anywhere in the valley in computer science. We know this is a problem in Silicon Valley. Everyone in the valley realizes that we need to address this diversity issue. Blueseed is trying to partner and reach out to organizations, and do whatever we can to make it conducive to have women on board.
Alex Mason, MBA