How entrepreneurship in Cuba is rising both fast and slow
Amy Guttman, Contributor, Forbes
Opinions expressed by Forbes Contributors are their own.
“There are tons of wifi spots and super fast speed. Change is happening very rapidly,” Cuba tourism expert Johnny Considine tells me. His answer would have surprised me just nine months ago. After all, we’re talking about Cuba, a place I visited last June, and by the time I returned just three months later, in September, it was like someone had switched on the internet.
As recently as a year ago, there were only a handful of reliable and affordable places to get online. Then, wifi spots became available in parks and a few other public places, where Cubans and foreigners can buy scratch cards. In fact, at night, it’s quite a site to see entire communities gathered in parks, the darkness broken by the light emitting from screens. At two or three dollars per hour, it’s not cheap, considering the average income in Cuba is about $300 per month. But, by the end of 2016, the government rolled out wifi in 2,000 homes as part of a pilot project, and signed a deal with Google to bring faster connections to the island nation.
But well before Google came to town, entrepreneurs have been so determined to build a future for themselves and for Cuba, that they’ve defied the odds – forming a small startup community – largely offline.
Undeterred by the structural and political obstacles of living in a society where until President Raul Castro eased restrictions on entrepreneurship – years ago, it was forbidden; a generation of Cubans is building an ecosystem – slowly, but surely.
The country’s first Startup Weekend, held in 2015, attracted participants hungry to learn how to turn their ideas into businesses.
Here are some of the official and unofficial winners of Cuba’s growing entrepreneurial ecosystem:
Solving local problems
Mi Escaparate is a platform for buying and selling used clothing. Thirty-one year old team member Asley Arbolaez Malboa studied computer science, a popular, but difficult choice since only three universities in Cuba offer the curriculum. After six years at a government job, Arbolaez Malboa began doing printing work and then coding and designing websites. How does anyone make money building websites in a country that, until very recently, was largely off-line? Simple, Arbolaez Malboa says, through tourism and the Cuban Diaspora.
“Businesses who want to market to tourists need to have websites. There isn’t much of a local market, but for visitors, it is big. Tourism has been increasing for the last six years, which has driven the demand. Our main market is Canadian tourists.”
Yondainer Guiterrez and his business, AlaMesa, is one of the most promising to emerge from Cuba’s young startup scene. Similar to Open Table, AlaMesa is a dining platform and app with reviews and regular updates featuring new openings and restaurants generating the most interest. Users are both locals and tourists with information in Spanish and English. Guiterrez founded AlaMesa five years ago with no capital, and a listing of just 20 restaurants. Today, Guiterrez and his four other co-founders work out of an office with 17 part-time developers. There are more than 800 restaurants listed, with every province represented. The app is available on iTunes and the Google store.
Guiterrez attended Cuba’s only design school and started out developing websites and apps. His clients were mostly Cubans living everywhere except Cuba. Cuba’s pool of cheap labor has kept Guiterrez and others busy. The low cost, high work ethic among programmers is what Guiterrez believes could help sustain the country’s economy in the future.
“We are good designers, we are good at programming and we work hard. I work all day, every day, seven days a week. Cuba could take on a very competitive role in this area.”
AlaMesa generates revenue by selling advertising to restaurants, and there are plans to enable local and foreign reservation bookings, which will become another income stream.
Guiterrez says AlaMesa was profitable in its first year, and by the second year, he and his co-founders were taking small salaries.
The app works offline and delivers users a weekly newsletter, either through the site, or via El Paquete, a booming business providing Cubans with newspapers, magazines, soap operas and other media, on demand, distributed on USB sticks, or discs. Think of it as a modern newspaper delivery service.
Cuba’s food scene is fast improving. Restaurateur Niuris Higueras Martinez and her brother own Atelier and Chanson, two of the most popular, sophisticated restaurants in Havana, both inspired by candle-lit French restaurants with paintings and cut crystal scattered throughout the interiors. Martinez hand-writes the menu daily on a typical ration card, because in Cuba, what’s available one day, may not be the next. It could be could be fried taro, seafood salad or peppers with tuna.
Since the Martinez’ opened six years ago, they’ve seen enormous changes. Originally, restaurants couldn’t have more than 12 chairs and all of the employees needed to be part of the family.
Now, Martinez says, “It’s completely different. It takes just five days to open a restaurant.”
The biggest challenges are supply and human resources. Without a wholesale system, restaurants must source goods from the same markets available to consumers, where quantities are very limited. Regular customers from abroad are often counted on to hand-carry imported exotic items like wasabi or pesto.
Martinez says the workforce has suffered from decades of living in a culture where a government job was the best career choice.
“The toughest part of owning a business in Cuba isn’t the market, it’s the human resources. It’s difficult to get and train the staff. They’ve lost the passion for work. It’s because of the work ethic that comes with government jobs.”
That’s why Guiterrez hopes to use Atelier as a social project to train local women in the service culture.
The hospitality industry is one of the fastest-growing sectors in Cuba. A combination of President Raul Castro’s easing restrictions on private businesses, along with increased demand, and a shortage of modern, high quality hotels, has drawn members of the Cuban Diaspora, like Ydalgo Martinez, back to Havana.
“When they changed the laws for private business about six years ago, my niece and I started with a penthouse. It did so well, that I bought a place called Canaveral House a few years ago. It’s of a different standard that has not really existed in Cuba.”
Martinez spent more than a decade working in Zurich for European fashion house Bally, and appreciates good service and great design. His Canaveral House is like entering an upscale 1950s showroom, adorned with local art and original period furniture and fixtures. Though Air BnB entered the market in 2015, which has enabled many Cubans to earn good money renting rooms and entire houses, Martinez has resisted. Instead, he only rents his properties through a handful of operators, like Johnny Considine.
While many of Cuba’s developing industries are making progress with the advancement of technology in the country, Considine is one of a not-yet-dying breed: the man in Havana. Everybody needs one. Considine has worked in Cuba since 2003, and he’s carved out a niche gaining exclusive access to special places and properties, like Martinez’ 1950s design house, and a castle formerly occupied by generals. Much of his work is for high-end travel agencies like The Ultimate Travel Company in London, whose Cuba specialists say that despite rapid changes, particularly in the last year, it’s still a place where personal relationships and cultural know-how go far. They rely on Considine for most in-country arrangements. In many cases, some of the homes and activities aren’t even advertised or featured in guidebooks or online – like new food tours featuring the latest restaurants, such as a tiny Japanese café that’s always full and cleverly uses hot cocoa powder to make ‘chocolate’ crepes. Availability calendars and bookings for the few luxury hotels that now exist in Cuba, Considine says (and reflects my own experience) are often not updated.
“Things are changing so fast. We’re now seeing many private homes opening up, being renovated, offering us a whole section of old Havana that was not available before. Visitors are surprised by their boutique-style. It’s hard for anyone to keep up unless you’re on the ground. It’s a different world since 2003. It’s a 180-degree turn with tons of optimism.”
With so much mystery still shrouding a country that has only recently become accessible to American tourists, the man in Havana and apps like Alamesa will be relevant for some time.
IN ENGLISH LANGUAGE
FOR PEOPLE WHO READ IN ENGLISH: ORIGINAL DOCUMENTS IN ENGLISH OR TRANSLATED. PUBLICATION DOES NOT MEAN WE ENDORSE OR REJECT CONCLUSIONS OR STATEMENTS OF AUTHORS