Floating a New Approach to Nearshoring

Blueseed two TowersYou've probably heard about the guys who want to dock a floating office park/living space off the coast of California, where entrepreneurs could have quick access to Silicon Valley but not be stifled by US immigration laws. Blueseed LLC, a startup, is raising funds to develop its idea of a ship, or platform thing, that sits in international waters, 12 miles from San Francisco, where people from other startups can live and work and be just a short boat ride or heli-jaunt from the venture capitalists and potential partners or customers in Silicon Valley. They call it an "offshore technology incubator."

Looking at the Blueseed concept drawings – which fans of painter/New Yorker illustrator Bruce McCall will appreciate – my first reaction was: Neat, but what could this kind of offshore tech-town rig mean for IT outsourcing providers?

That's not who Blueseed seems to have in mind, yet, so for a minute, let's get back to their main idea.

As Blueseed cofounder Max Marty told an AP reporter: "A lot of people say, 'I'd like to go to Silicon Valley' but there is no way for them to do it." On the Blueseed vessel, these people can develop their business and not have to worry about being sent home after their visa runs out, he says.

Abiding in international waters, the site's inhabitants would not be subject to the visa restrictions they'd have to deal with to actually work in the US. They'd need temporary business or tourist papers to get in to go see investors or clients, or go to a Giants game, of course, but they wouldn't need one of the highly coveted work visas. They would be expected to live according to the laws of whatever country the vessel is registered with, which the company says might be the Bahamas or the Marshall Islands. (I would've thought they'd go with Freedonia.)

To the dubious ones who say "Have you guys not heard of telecommuting or videoconferencing?" Blueseed president Dario Mutabdzija says "physical interactions are of paramount importance" when trying to launch or grow a company. He says that some investors won't even talk to you if you're not located within 20 miles of the Valley.

So, what might this mean for outsourcing companies? The visa angle could be worth considering if you need to be physically near your customers. Limited availability of US work passes can have implications for projects. As Kathy Welch, senior advisor at TPI, explains, "the problem is that any delay risks derailing implementation schedules that have very little wiggle room." A visa hitch can turn a two-week turnaround into a four-week turnaround, she says.

This applies to providers from many countries besides India. One exception would be Mexico. NAFTA grants favored status that makes it relatively easy for US businesses to bring in Mexico IT workers. Also, as is kind of obvious, many Mexico-based companies are already near the US. It's about a three-hour flight from, say, Monterrey to San Francisco.

Blueseed modernSo, the stationary-boat idea probably would not make much economic sense for many firms that are already pretty close to the USA. But for a provider or businessperson further south, below Central America, the proximity could be appealing. It's a long flight from Argentina and Chile to the States. Brazil is closer spatially, but one thing you hear from people doing business between SF and SP is that the trip is not one they'd like to make routinely, and it's not inexpensive either.

For Nearshore companies that want closer proximity to what the Valley has to offer, in terms of both human and capital resources, it might make most sense to just rent office space in the vicinity. It's hard to do an economic analysis at this point because one of the only estimates Blueseed has offered is that a living/working space would cost about $1,200 a month. Other living expenses would not be cheap, as anyone who has lived on an island knows. How much will it cost to take a boat to America to schmooze with the VC set? How long will it take to make the trip? Will incoming visitors be subject to extra-special screening because they're from, you know, that weirdo place?

There are lots of questions about the Blueseed project, including if the actual site will look anything like the excellent vessels in the drawings or be merely a modified cruise ship or barge. So who knows if intrepid Nearshore IT companies would see enough advantage to operating from Waterworld.... or the inevitable comparison to another place in the foggy offshore waters of San Francisco, Alcatraz. But if nothing else, the Blueseed concept could bring new meaning to the term "nearshore."