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)

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."