coworking space. I think the space represents about 10 percent of the value, and 90 percent of it is the “soft services” or connections. It’s hard to put a quantitative value on it, because we have entrepreneurs who take incredible advantage of the community, and others who could just as well be working in their own garage.
X: You’ve got locations in Sunnyvale, Palo Alto, and Redwood City, but not San Francisco proper, which is obviously an increasingly dense startup hub. Have you looked at opening a San Francisco location?
SA: Yes, we’ve considered it a few times. I think San Francisco is really going through a boom. But right now, for both residential and commercial [property], the cost is reaching really high.
X: How do you spend your time? There’s still a larger real estate business here, right?
SA: We are still involved in real estate. For example, we have an operation in LA called the Hollywood Production Center, which is similar to Plug and Play but caters to the Hollywood film industry. We have a project in LA called TenTen Wilshire that we call a “lifestyle” place where you can work, live, and have fun.
So yes, Plug and Play originally started as a real estate business, but it soon deepened to much more than I never imagined. It’s the point now that I think 10 percent of our activity is in real estate, 30 percent is acceleration of startups, 30 percent is corporate innovation and building a bridge between the startup world and the corporate world, and the last 30 percent is our international bridges with Belgium, Germany, Japan, Austria, Australia, et cetera.
Up until about a year ago, I spent a lot of time in my international activities. I feel there is a considerable amount of talent and great ideas to be tapped from all around the world. But quite frankly, it is a lot harder than I ever imagined. So in the last year and in the future, I am refocusing my attention to early stage startups out of the best universities in California and America. Today I am spending 70 percent of my time finding good investments, mostly in California but a little bit overseas.
X: Say a little more about “corporate innovation” and these bridges you spoke of between startups and corporations.
SA: We have gone through a great boom of social networks and B2C businesses, but I feel that in general, B2B is coming back as social and mobile move into the corporate world. We feel there is a great opportunity to collaborate and partner, and that our entrepreneurs can have the inside track to build products and innovate, with great brands like Audi or Volkswagen.
We just announced Volkswagen Plug and Play Acceleration Program. If you could pilot a project with a company like VW, it would confirm that the technology is really interesting and has a lot of excitement around it. That is where we feel corporate innovation could be interesting. There have been a lot of corporate incubators, or what they used to call incubators, but really I think if you try to innovate inside the corporation, you fall hostage to the corporate structure. With our Silicon Valley bridge, we feel we can play a part in the relationship between the enterprise/corporate world [and the startup world]. It becomes a valuable platform for [startups] to execute their ideas, and get funding and connections from the corporate world.
GM is a member with us, VW was originally a member, Mercedes is a corporate member. They want to scout new ideas to take back to their automotive design people. Especially the information systems part of the automobile, the connected car.
