Several weeks ago I wrote a post about a twist on traditional offshore development. Companies such as Blueseed are proposing the development of entrepreneurial start-up hubs located on the California coast just outside of US jurisdiction.  After doing a little further research, there are a few clarifications I want to make on this endeavor. I’ve taken some time to explore this proposal a little further, and while my initial understanding was not quite accurate, the project still raises questions.

Initially, it appeared Blueseed would be hiring programmers to work on a boat just offshore to circumvent US immigration laws and restrictions. It seems instead of programmers, however, they are interested in creating an incubator community for entrepreneurs on a floating work center. Without proper documentation, these individuals would not be eligible to work in a traditional setting on the mainland. With the proposed arrangement, they would have the ability to visit the mainland, permitted they could obtain the required documents. Instead of being beholden to the US tax code, they would be required to pay taxes according to their nation of origin and/or the flag that the ship eventually flies under. So while the target audience for employment on a Blueseed ship was amiss, it seems the issues of immigration and taxation remain fuzzy.

The hope is that this incubator community will generate the next great start-up and that, even though it’s not on US soil, it will help stimulate the American economy. How Blueseed proposes this will occur is three fold: First, the new startups will create jobs, and the jobs needed to support life on the ship will be available to Americans. Secondly, a new supply chain will need to be established to ferry supplies to the boat, operate the transit ships. Third, according to Blueseed, “the majority of the startup companies hosted by Blueseed will create high paying jobs.” While Blueseed is the starting point, the company projects that within a few years of existing on the ship, the startup companies will be too big to remain and will need to relocate to Silicon Valley. This could be a very clever idea – if it works.

The concept is not too far removed from the Plug and Play Tech Center in Sunnyvale, California. They have become the iconic single location that represents all of Silicon Valley – its culture, its style, and its entrepreneurial spirit. The Tech Center took over an old building in Sunnyvale where entrepreneurs can rent a cubicle. They’ve created this whole business culture where there are meetings and venture capitalists coming through – in their words, it’s Silicon Valley in a box. It seems to me that Blueseed is trying to create the Plug and Play Center on the sea.

Blueseed isn’t alone in this offshore community creation. The Seasteading Institute, an organization founded by Peter Thiel, (who is also backing Blueseed), is also at work to create floating cities “because our governments profoundly affect every aspect of our lives, and improving them would unlock enormous human potential.” The impetus and eventual creation of these separate societies echoes Ayn Rand and “Atlas Shrugged.” It’s clear that people are seriously considering these projects as viable, however, the actual implementation will be a long, uphill battle.