WILL A FLOATING TECH FACTORY FLY?
(FORTUNE Magazine) – FORGET MEDICAL AND DENTAL. How about shuffleboard benefits? SeaCode is a San Diego--based startup whose founders have conceived a twist on global outsourcing: The company plans to make use of international tech engineers and coders--not in far-flung India or China but just three miles off the coast of Los Angeles--by stocking a cruise ship with some 600 computer geeks from around the world.
Founders David Cook, a former tanker captain, and Roger Green, a 25-year IT vet and former CIO of semiconductor equipment maker Cymer, are shopping for a used cruise ship, and the pair hopes to have SeaCode sailing in early 2006. Cook and Green, who met three years ago through mutual friends, have spent the past months securing funds from private investors out of SeaCode's Sorrento Valley offices. (Cook declined to specify how much has been raised.) Most all of those who have put up cash are what Cook calls "well-heeled" San Diego residents, including Barry Shillito, an angel investor and a former assistant secretary of defense.
The genius (or disgrace) of moving operations to the ocean is that SeaCode's floating tech factory, like regular cruise ships, won't be subject to U.S. labor laws but to the laws of whatever flag the boat decides to fly. (The banners of the Bahamas and Vanuatu are under consideration.) Moreover, clients won't have to travel halfway around the world, muddling through unfamiliar territories and foreign languages, to check on projects, which might include programming embedded code for cellphones, maintenance of a company's mainframe system, or writing applications from scratch. No clients have yet been signed, but Cook says SeaCode has approached FORTUNE 100 firms and claims many have expressed interest in moving overseas projects closer to home.
The seafaring recruits, who will legally be classified as ship's crew, will work ten-hour days, six days a week. They'll earn between $1,500 and $1,800 a month--a lot less than on the U.S. mainland but more than in many other countries. Plus, they'll get two months off every six, says Cook. By law, foreign nationals can't live in the States (room and board on the ship will be free), but they're allowed shore leave via water taxi. Green, 59, claims that he's been inundated with thousands of résumés from college-educated foreigners with various specialties who discovered SeaCode through newspaper articles and word of mouth. He says some Americans have also applied--many recent college grads who find life without a car or landlocked apartment attractive.
Not everyone, however, is, um, onboard. "SeaCode seems like a parody of what's wrong in the world today [with outsourcing], but it's real," says Elizabeth Drake, an international policy analyst with the AFL-CIO, who's been following the startup. The labor group, however, has no plans for a formal protest. Too bad. Those giant inflatable rats would work perfectly in the ocean. -- Reed Tucker