Tech entrepreneurship, innovation, apps in Cuba thrive in difficult ecosystem

By October 9, 2017

In Cuba it is not easy being an entrepreneur, or a capitalist threat to a Marxist–Leninist regime, working mostly offline, moving information secretly in thumb drives, and surviving in an underserved and restricted environment.

But despite this, for decades, Cuban entrepreneurship simply refused to die.

And today, over a year after the Cuban thaw milestone of March 2016, entrepreneurship is growing faster than ever.

Private businesses have been allowed in Cuba since the 1990s; from that moment the sector has been flourishing to the point where it employs a large portion of the population, with entrepreneurs making the highest average wages. In the tech sector in particular there are many more CS graduates every year than available positions, many joining the ranks of Cuban entrepreneurs out of necessity.

The products spawned by this trend are unique. For distribution in an internet-starved island, Cubans have developed ingenious solutions such as El Paquete: a frequently updated compilation of media, applications and other digital data that is sold or passed around from person to person using flash or hard drives.

Every iteration of the highly sought-after El Paquete includes the latest versions of popular Cuban-made offline apps. Alamesa, for example, is a five-year-old food-tech startup with a unique adaptation to the island’s poor internet connectivity. The restaurant aggregator, featuring hundreds of establishments and special offers all over Cuba, has an offline version for PC and mobile devices that is updated every 15 days. Also included is Ke Hay Pa’ Hoy? a portable database of upcoming cultural and entertainment events; and La Chopi, an offline eBay of sorts, constantly updated with things for sale and their location throughout the island.

Other Cuba-specific solutions have sprouted up as well. Zapya, although not Cuba-made, enables smartphone group chats via Bluetooth turning gatherings around places like town squares into offline social networks.

With Nauta, Cuba’s resourceful techies seize the country’s only data plan, a 2G email-only service offered by government-owned ETECSA, to update apps via the Cuban email service.

Entrepreneurship thriving in a difficult setting

The friendly attitude of Cubans toward technology and entrepreneurship kept both very much alive, despite difficult access to the internet and the high cost of technology for the vast majority of the population. An hour of rather slow internet access costs $2 to $3 in a country where 4 out of 5 households live on less than $650 a year. Computers are highly expensive but are increasingly common as they are also necessary for a lot of jobsat least for the urban population.

The silver lining to this situation is that Cuba has an army of developers and other tech professional working at unbeatable rates, making it attractive for software companies abroad even after paying for expensive internet. In line with the recent opening up trend, the government has started to sponsor higher-speed internet in selected households and to place more hot spots around the island.

cuba tech innovation

Fernando Franco, Executive Director at PuenteLabs

As internet access improves, Cuban entrepreneurs might find opportunities within and without.  “We are open to any industry and country from Latin America,” said Fernando Franco, CEO of PuenteLabs, a San Francisco-based accelerator specializing in the region. “We acknowledge not every Latin American startup will be able to come to Silicon Valley, so we want to share ‘Silicon Valley know-how’ with them,” he continued.

Some of the Cuban startups with the most potential for growth involve services for Cuban expatriates. Cubazon is a service that allows expats to purchase and send gifts to their loved ones on the island; its team made a significant appearance on Disrupt NY 2017. Likewise, Fonoma lets expats send prepaid cell phone and WiFi services to those within the island.

Many of the crafty solutions mentioned earlier made it to the 10x10KCuba startup competition, specifically aimed at Cuban startups. With the help of accelerators such as NXTP and BoomTown, the competition’s 10 winners will receive much needed help to develop the Cuban presence in the entrepreneurial scene of Latin America.

The island still faces many challenges related to international and domestic policies. Recently, the issuance of permits for private businessesentrepreneurial endeavors includedhas been halted due to widespread irregularities in taxation, as well as the increased competition it entails for state-controlled companies.

Nonetheless, the winds of change are swelling the sails of tech startups hailing from the Caribbean island. Full of fresh ideas that only new eyes can come up with, Cuban innovation is seeking for opportunities as it arrives to new portsmetaphorical ports this time around, not USB ones.