How to Launch a Silicon Valley Start-Up When You Can’t Live in the U.S.

This Mexican programmer has a successful California business developing animated educational games for mobile devices. The only catch? He can’t live here.

Manolo Díaz, CEO and co-founder of tech startup Yogome, presents the company's educational mobile games to investors in July 2012 at Microsoft's office in Mountain View, Calif. The 31-year-old Mexican entrepreneur has raised nearly $1 million from Silicon Valley investors, allowing Yogome to hire 20 employees in California and Mexico City.
National Journal
Alexia Campbell
July 2, 2014, 10:07 a.m.

This pro­file is part of a weeklong Next Amer­ica series on the ex­per­i­ences of minor­ity small-busi­ness own­ers in the United States.

Man­olo Díaz didn’t know where Sil­ic­on Val­ley was when he first flew to San Fran­cisco from Mex­ico. On his second trip, the 31-year-old com­puter pro­gram­mer from Cent­ral Mex­ico ar­rived in Cali­for­nia with no money and no re­turn tick­et. It was early 2012, and he and his busi­ness part­ner were bank­ing on one out­come: per­suad­ing Sil­ic­on Val­ley to in­vest in their tech start-up.

It was a gamble, not least be­cause Sil­ic­on Val­ley rarely took chances on for­eign en­tre­pren­eurs. Díaz and his part­ner, Al­berto Colín, had just launched a com­pany called Yogome, which de­vel­ops an­im­ated edu­ca­tion­al games for mo­bile devices. “I told my part­ner: Let’s do everything we can to raise cap­it­al, and if noth­ing hap­pens, then who knows? Maybe we’re do­ing something wrong and we need to re­think this,” says Díaz.

The duo presen­ted their game Trash Chaos (now called Re­cycle Her­oes) to more than 100 in­vestors that day at Mi­crosoft’s of­fice in San Fran­cisco. Their squad of an­im­ated “yogotars” bounced across the screen, re­cyc­ling and com­post­ing to save the world from drown­ing in the trash of evil queen Ig­nor­antia. After the demo, a ven­ture cap­it­al­ist in­vited them to join 500 Star­tups, a four-month busi­ness ac­cel­er­at­or for small tech com­pan­ies.

“It was in­cred­ible,” says Díaz, who later moved the com­pany’s headquar­ters to Sunnyvale, Cal­if. “They gave us $50,000, which is just what we needed.”

Since then, Yogome has cre­ated 11 more app-based games that have been down­loaded more than 4 mil­lion times in 157 coun­tries. Pop­u­lar games like Sci­ence Her­oes and Hol­i­days Re­cycle Her­oes, which are avail­able in Eng­lish and Span­ish, helped rank Yogome as one of the top 200 pub­lish­ers of free edu­ca­tion apps for Apple devices, ac­cord­ing to ana­lyt­ics for the first quarter of 2014.

The com­pany’s steady growth re­cently spurred an­oth­er round of in­vest­ment—$750,000—from a hand­ful of donors and in­vestors in Sil­ic­on Val­ley. A por­tion of that money now pays the salar­ies of Yogome’s five Amer­ic­an em­ploy­ees in Cali­for­nia and 15 game de­velopers in its Mex­ico City of­fice.

But there’s a prob­lem: Colín and Díaz can’t live or work in the United States. They don’t have work visas. They can vis­it and raise cap­it­al in Cali­for­nia on a visa for busi­ness vis­it­ors, but Díaz must leave his Sunnyvale of­fice every six months. He col­lects his com­pany salary in Mex­ico.

Get­ting U.S. work au­thor­iz­a­tion is a huge chal­lenge for for­eign en­tre­pren­eurs who are in­creas­ingly start­ing busi­nesses in Amer­ica’s tech cap­it­al. Díaz hopes to get a tem­por­ary work per­mit through the North Amer­ic­an Free Trade Agree­ment, which grants visas to cer­tain pro­fes­sion­als from Mex­ico and Canada. “Re­gis­ter­ing my busi­ness in the United States was the easy part. Get­ting paid a salary is an­oth­er thing,” Díaz says over the phone from his of­fice in Mex­ico City, where loc­al school­chil­dren of­ten stop by to test out new games.

Still, it’s not an op­tion to move the com­pany out of Sil­ic­on Val­ley. Tech start-ups could nev­er thrive in places like Mex­ico, Díaz says. The tech com­munity there is too small and in­vestors would rather fund safer ven­tures, such as real es­tate pro­jects. “In Sil­ic­on Val­ley, it’s all about risk,” says Diaz, who hopes to raise a fam­ily in San Fran­cisco or Pa­lo Alto one day. “Face­book would nev­er have happened in Mex­ico.”

Diaz cred­its his par­ents, who run a heavy-equip­ment re­pair shop in San Lu­is Po­tosí, Mex­ico, for en­cour­aging him to take chances. They bought him a com­puter, magazines, and in­struc­tion­al CDs when he first showed in­terest in com­puter pro­gram­ming as a teen­ager. He later got a schol­ar­ship to study com­puter en­gin­eer­ing at the San Lu­is cam­pus of Mex­ico’s pres­ti­gi­ous Uni­ver­sid­ad Tecnoló­gi­co de Monter­rey.

He and Colín began their own busi­ness by build­ing web­sites for oth­er small busi­nesses. Be­fore long, the two were design­ing on­line math games for a loc­al kinder­garten. That’s when they real­ized they could make more money selling the games dir­ectly to con­sumers who use smart­phones and tab­lets. In one week­end, Díaz learned to make games for iPads. Then he hired aca­dem­ic ex­perts to de­vel­op edu­ca­tion­al con­tent. “It was the best de­cision we ever made,” says Díaz, who got Yogome star­ted with $10,000 from re­l­at­ives and $20,000 from a small Sil­ic­on Val­ley fund for Mex­ic­an start-ups. 

The two friends from San Lu­is haven’t looked back since. They’re now aim­ing to fi­nally turn a profit in early 2015 with twice as many games in their port­fo­lio, which con­sumers can cur­rently down­load for free or pay a few dol­lars to up­grade. Their biggest cus­tom­ers are in the U.S. and Asia. Next, they want to of­fer the games in Por­tuguese and maybe even Ja­pan­ese.

Diaz said he’s ex­cited to see Sil­ic­on Val­ley tak­ing more chances on en­tre­pren­eurs from de­vel­op­ing coun­tries. The 500 Star­tups pro­gram he com­pleted in 2012 re­cently launched a Mex­ico City pro­gram. “There are tal­en­ted and cre­at­ive people all over the world,” he says. “Any­one can cre­ate any­thing that comes to mind. If you can think of it, you can find the money for it.”

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