Hidden Valleys

Silicon Valley Crash Pad Becomes Crash Course for Global Startups

Photographer: Plug and Play Tech Center via Bloomberg

A Plug and Play event, where people worldwide come to meet up. Close

A Plug and Play event, where people worldwide come to meet up.

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Photographer: Plug and Play Tech Center via Bloomberg

A Plug and Play event, where people worldwide come to meet up.

There's a United Nations feel to Silicon Valley's Plug and Play Tech Center. Amid people speaking French and Russian, a group from Hong Kong recently toured the startup accelerator, where more than a dozen foreign flags hung prominently in the lobby.

The decorations aren't just for show. Seven years after Saeed Amidi started a real estate venture to provide cheap and easy office space to startups, his Plug and Play has evolved into the go-to place for international entrepreneurs in need of connections, capital and talent.

While cities across the globe have been building their own tech hubs, the ecosystem of Silicon Valley is still hard to beat. That's a big reason why many startups from around the world arrive at Plug and Play, which helps entrepreneurs develop business models, pitch to investors and get face-time with potential customers.

"This is the kind of stuff that you will not find in Spain or in Europe," said Alfonso de la Nuez, who stumbled upon Plug and Play when he was looking for office space for his Spanish startup in 2007. Through the incubator, he said his business software service, UserZoom, has grown to $5 million in annual revenue and counts Cisco and Twitter as customers.

The main campus houses in excess of 300 companies, and more than $1 billion in funding has been raised by startups that have come through the doors.

Among its international alumni, Plug and Play lists Lending Club, which has funded $1.6 billion in consumer loans, and Zong, a mobile payment startup founded by PayPal President David Marcus that sold to EBay for $240 million.

The success of your graduates is key in attracting the top entrepreneurs, especially as the crowded incubator business gets more competitive. In the U.S., Amidi vies with Y Combinator and TechStars, which tend to be the more popular programs for ambitious, young entrepreneurs. Silicon Valley-based Founder Institute has a global network of entrepreneurs and investors. In Europe, Seedcamp and Startupbootcamp have gained traction.

To maintain its edge as tech hubs around the world grow, Plug and Play is working closely with 20 countries, including Austria and Turkey, to offer 30 to 60 startups at a time a three-month crash course in tech entrepreneurialism. Companies that stand out get introductions to some of the 180 investment firms connected to Plug and Play.

"We feel that less than 5 percent of our value is real estate," said Amidi, whose company offers renters a cubicle, Wi-Fi, shared conference room space and a cafeteria for about $500 a month. "The rest of it is - you make one good connection or get one big customer or one big funding, it changes the whole startup's life."

Amidi's next challenge is to bring his self-described "Silicon Valley in a box" to major cities around the globe. The Iranian founder already has locations in Canada, Malaysia, Singapore, Spain and Russia. He admittedly "overstretched" himself in trying to open one in Cairo's Tahrir Square just before the Arab Spring hit Egypt in 2011.

He plans to open a site this year in Berlin with Axel Springer, Europe's largest newspaper publisher, which is looking for startups to help guide its transition from print to digital.

"The whole world is trying to copy Silicon Valley," said Amidi, who acknowledged that such a feat is impossible. "We try to help the country or the city build their own ecosystem."

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