Cuba will fail at tourism, but it can win at creative technology

Sunrise over Havana as seen from the Hotel Nacional. Photo Credit: Marcelino J. Alvarez

Earlier this month I returned to Cuba as part of a diplomatic delegation sponsored by the Aspen Institute and the Richardson Center for Global Engagement. As part of a person-to-person cultural exchange, these delegations enable American citizens from a variety of backgrounds to meet and connect with their counterparts in Cuba in order to further an understanding of the economic, political, and social climate on the island. It was my second trip to Cuba; I participated in their October trip last year.

Combining my professional skills with my Cuban heritage allowed me to contribute unique insight to our conversations. In the six short months since I first visited, a lot has changed. Cranes for new construction and billboards featuring renderings of new buildings were sprinkled among the historic and otherwise crumbling facades of Havana. A sense of renewed enthusiasm permeated nearly every conversation between parties on both sides of the Florida Straits. American businesses and entrepreneurs trying to understand the economic landscape met with counterparts eager to show a land of opportunity, openness to engagement, and a changing wave brought on by recent exchanges between our governments.

Each side wonders what awaits beyond November, as the uncertainty of U.S. elections casts a shadow of doubt over the enthusiasm. In the meantime, however, preparations are being made for an influx of American dollars via tourism, as if the embargo had magically been lifted and the rapprochement of the last few months has erased nearly sixty years of discord.

The enthusiasm and energy around tourism to Cuba is misplaced. In the short term, Cuba will fail miserably in this industry. It has a long way to go before it becomes a plausible tourist destination for the average American family. U.S. efforts in reestablishing business connections with Cuba should focus elsewhere — to the intersection of art and technology — a place where Cuba already has the infrastructure and the talent needed to compete at a global level.

The enthusiasm and energy around tourism to Cuba is misplaced. In the short term, Cuba will fail miserably in this industry.
Havana Harbor, as seen from the original Bacardi building in Old Havana. Photo Credit: Marcelino J. Alvarez

Broken Infrastructure

The challenges to Cuba’s tourism industry begin with its crumbling infrastructure. Disintegrated building facades are present everywhere, some blaming the embargo and others years of disrepair and lack of maintenance. Beyond the photos captured by tourists who wonder what they must have been, they offer little solace (or accommodations) to the throes of people bound for Cuban shores. Cosmetic upgrades, made in haste with a limited supply of materials, are unlikely to survive the first hurricane season they face. Nature’s most punishing force will restore them to their previous states.

A building undergoes repairs in Havana. Photo Credit: Marcelino J. Alvarez

The food supply chain, fraught with distribution challenges, remains a thorny issue on the island. Currently unable to produce enough food for its citizens, Cuba’s food supplies will likely buckle under the increased demand and scrutiny for the quantity and quality that American consumers demand. Nascent food cooperatives, rising to the challenge, will likely be unable to keep up with the demand, and even if they could, the lack of refrigerated vehicles will likely lead to tons of food spoilage before products can reach the buffet tables at Havana’s historic hotels.

Paladares, home-grown restaurants that serve dishes whose price exceeds the monthly salary of the average Cuban, lack the wholesale purchasing options enjoyed by restauranteurs elsewhere. They compete for the same supplies as everyday Cubans, visiting multiple locations every day to find enough food to supply the offerings on their menu. In case of food scarcity, the average paladar will not be able to source all the ingredients to prepare the dishes on their menu. American tourists, unable to comprehend scarcity, will complain of bland food, small portions, or boring culinary presentations. Many will fail, even before the Trip Advisor reviews sink in.

Not at your service

Decades of communist rule do not make for an empathetic service industry. Cuba’s waiters and staff at hotels lack the same level of customer service that is seen in other tropical destinations. Forget about room service, a second helping of food, or asking for a condiment. The lack of enthusiasm and motivation is evident even if you don’t speak Spanish; it’s more visible if you do. Some of this can be attributed to the Communist system, where an employee at a state-owned enterprise will be paid regardless of the quality of service.

In the short term, Cuba will likely appeal to those fascinated by the seeming bubble in which it has been contained since the sixties. Classic cars, antiquated buildings, and a culture of ingenuity against remarkable odds will all appeal to the first waves of American tourists. But once that wave has receded, it’s unlikely to become a repeat destination. Those who are less adventurous need not apply for their tourist visa. Cuba’s not ready for the mainstream, even if it’s served up via Carnival Cruise Line and high speed ferries from Key West.


Art Meets Technology, Cuban-Style

One area where Cuba can win today is at the intersection between art and technology. Despite giant gaps in the digital network, an emergent class of ambitious creative minds, seeking to innovate to solve for decades of disconnection, is pushing to make uniquely Cuban works for the Cuban market. Some of those creations push the limits of accepted expression — paintings, sculptures, music, and exhibitions challenge the status quo, while others use software and technology to address the pain points Cubans face daily in their disconnected world.

The main thing these makers lack is the tools needed to grow, distribute, and scale their creations. This is a challenge that is significantly easier to overcome than repairing roads, buildings, the food supply chain, and an uninspired service workforce.

The early successes emerging from this nascent industry show promise. Cuba in some areas needs to play catch up, but in others, it’s already ahead.

The Fábrica de Arte Cubano. Photo credit: Marcelino J. Alvarez

Fábrica de Arte Cubano

Once the headquarters of Havana’s electricity company and later an olive oil factory, the Fábrica de Arte Cubano holds its own among any avant-garde art museum in the world. Spanning multiple floors featuring contemporary art, live music, a movie theater, and food and drinks, the F.A.C. presents art and technology in a uniquely Cuban way. Interactive installations surround a bar, serving fancy cocktails quickly and efficiently. Payment is handled at the end of your visit — a passport full of drink stamps is reconciled on the way out.

Among the exhibits, “Minimal Leidy,” a collaboration between Enrique Rottenberg and Carlos Quintana. It is a mixed media piece comprised of a nude photo of an older woman seated in a chair with exaggerated elements painted over her body, including a large demonic hand and a face on her right breast. This piece, like others at the F.A.C., pushes against the norms one would expect from a country that has limited expression elsewhere. But art is the exception in Cuba, a medium through which what is normally unsaid can be screamed at the highest volumes. Historically, art in Cuba following the revolution aligned with propaganda and Soviet-style influence. In the 1980s and 1990s, the New Art movement emerged in Cuba, which aligned with the fall of the Soviet Union and the subsequent Special Period of economic hardship on the island. Art during this period challenged political norms through conceptual expression and a Cuban style of sardonic humor known as choteo.

A mixed media collaboration between Enrique Rottenberg and Carlos Quintana at the F.A.C. Photo credit: Marcelino J. Alvarez

For a moment, the F.A.C. feels like Berlin or Barcelona. But the throes of Cuban youth dancing to reggaeton brings it back to Havana. And in Havana’s Vedado neighborhood, the smoke stack of the former factory rises up like a giant middle finger to the rest of the decaying infrastructure that surrounds it. And yet, unlike its neighbors, the F.A.C. isn’t broken or crumbling. It shines. Within its walls, art tells the complex narrative of Cubans innovating against all odds. It’s a story told with art made from found objects, nude photographs that have been painted over, bootlegged Pixar films, and people standing in a queue that wraps around the entire building. Because they have nothing to lose in artistic expression, Cuba excels at it. And at the fringe of art exploration enters technology as an artistic medium. Sensors and LED’s make the narrative interactive. And once you introduce technology as an artistic component it becomes a trojan horse into commentary on the digital divide in Cuba.

Because they have nothing to lose in artistic expression, Cuba excels at it. And at the fringe of art exploration enters technology as an artistic medium.
The smokestack to the Fábrica de Arte Cubano juts out in the skyline of the Vedado neighborhood in Havana, Cuba. Photo Credit: Marcelino J. Alvarez

Google + Kcho

Speaking of art and technology, nowhere are the two more interwoven than in the public wifi zone and library sponsored by Google and Kcho, a Cuban artist who is active politically and also a representative in the National Assembly of Cuba.

Browsing the internet from the only free wifi zone in Cuba. Photo Credit: David Ewald

In the open atriums sitting beneath a sign that reads “Con Internet Yo Puedo” (With the Internet I Can) people of all ages connect to family and friends. The zone, which opened originally in 2013, was augmented recently by a sponsorship from Google, which included a room full of Chromebooks, Google Cardboard, and various branded areas for experiencing products such as Hangouts and YouTube.

Free wifi and good coffee at Google + Kcho’s art and technology center. Photo Credit: Marcelino J. Alvarez

According to our tour guide, visitors to the Google lounge have access to faster internet, which is served up from the morning till midnight. Anecdotal glances at people’s computers revealed what one would expect — video chats, Facebook messages, Gmail, and an online dating site.

Among the various gathering points are various art exhibits, a library, and a cafe serving quality Cuban coffee. The art varies from a collection of works from Wilfredo Lam, one of Cuba’s most renowned artists to silkscreened works, sculptures, and commentary on the diaspora of the Cuban people. Various exhibits show small boats, stacked luggage, one includes a boat propeller with tiny mechanical birds that peck away to turn the blades.

Outside, stencil grafitti shows Jose Martí wearing a t-shirt that says “I Love Free Wifi.”


Azúcar Valley

Cuba’s foray into art and technology is not limited to established museums and wifi zones. A new class of startups of and products is emerging from a collaboration between the University of Havana and Humboldt University of Berlin. Led by professor Alejandro Peñalver, the program is modeled after other startup incubators, featuring mentors, pitch practice, design thinking and organizational teaching, and even a demo day.

Eight Cuban startups had recently graduated from the first class, having held their first demo day in mid-April. Companies focused on a variety of sectors, ranging from aerial drones to microclusters to a mobile imaging company trying to detect uterine cancer.

Though the program borrows universal components of incubators, Cuba still lacks the financing modalities seen elsewhere. A demo day without the ability to receive investment doesn’t enable startups to build upon the momentum of the preceding three months. A lack of an ecosystem to acquire and grow small startups also means that these newborn companies are left to fend for themselves. The next few months will be critical for these companies to find mentors, a support network, and the capital and resources needed to build and grow their companies. It may not ever be Silicon Valley, but Azúcar Valley has a nice (and uniquely Cuban) ring to it.

The second chapter of Incúbate kicked off with a large game of Rock, Paper, Scissors between American and Cuban entrepreneurs. Photo Credit: Marcelino J. Alvarez

Incúbate 2.0

While in Havana, we held our second annual product and service design workshop between Cuban entrepreneurs and American counterparts. Called Incúbate, the two-day workshop provides entrepreneurs with the tools they need to establish, grow, and build their companies. It offers them an opportunity to share ideas with other entrepreneurs and gain insight about the challenges associated with building a company. Incúbate was conceived of during the July 2015 delegation and launched later that year in October. It is a deeply rewarding experience to be able to return to one’s homeland and share knowledge, anecdotes, and techniques to understand consumers, product design, development, and operations. As an ambassador on behalf of my company, Uncorked Studios, and my city, Portland, Oregon, it allowed me to connect people, tools, and processes with a diverse set of entrepreneurs and share how we help brands and startups with their product development. It also offered a rare chance to share how we work in a public setting. Since much of the work we do falls into an R&D category, only our clients and colleagues typically see this side of us.

Miguel Estien, a business executive with GE Capital, shares his vision for a connected world at the Incúbate workshop. Photo credit: Marcelino J. Alvarez

This time around, we were joined by a diverse set of founders and participants, from designers to engineers to university professors.

One startup, Mi Escaparate, led by Claudia Walls, was founded on the insight that Claudia had when she entered the professional workforce after graduating from college. She recognized that she lacked business attire and could not afford to replace her entire wardrobe. So she conceived of an ecommerce store to allow Cubans to sell clothes on a second-hand marketplace in order to purchase new attire for the young professional. A computer scientist by training, Claudia won Cuba’s first Startup Weekend, went to regionals, and was part of a delegation of startups that met with President Barack Obama in April.

Isla Data, founded by Suilan Estévez, Alejandro Piad, and David Darias is a business intelligence product that collects data from public sales records and provides insight to real estate agents about the home real estate market and potential car buyers about the automobile sales market.

Conoce Cuba returned to our workshop; they helped recruit many of our participants in the inaugural class of Incúbate. Their company has built a mobile product that allows Cubans and visitors to Cuba to find and discover restaurants. It works in offline mode, which given the data constraints on the island, makes it an effective (and free) tool to find places to eat.

Patti Vrobel from Autodesk and Ernesto Guerra, a Cuban entrepreneur, work side-by-side generating ideas on product design, business, and operations for their respective organizations. Photo credit: Marcelino J. Alvarez

In addition to these companies, we had university professors from ISDI and the University of Havana, who each brought some of their colleagues and students to participate.

From ice-breaking activities to empathy maps to business model canvases, we quickly put aside the politics and historical complexities in order to focus on our commonalities — a desire to learn from each other, help develop our companies, and pave the way for future collaborations.

The Incúbate workshop featured small groups discussing topics on startups and business model generation. Photo credit: Marcelino J. Alvarez

Products with Purpose

The thing that unites each of these businesses is that they are building products with a specific purpose. Each tackles a specific problem unique to Cuba. The frameworks and the methodologies help provide focus, but the idea and the execution is all theirs. Isla Data is not trying to be the next Zillow, nor is Mi Escaparate trying to compete with Etsy. Conoce Cuba isn’t Yelp for Cuba. These are all products that were conceived of through a very specific lens — a tool or a solution to a problem that young Cubans face. The business model for each of them, whether it’s a software-as-a-service, an ecommerce store, or a marketing and sales organization, can borrow from the structures of similar companies elsewhere.

All the companies are on similar timelines, so the startup ecosystem that we are used to here doesn’t yet exist. It’s too new to have people who have failed or exited. The latter outcome is less relevant in Cuba, perhaps success or moving on to a second or third product is a more suitable comparison than an acquisition by a large tech company. Scaling a product globally isn’t a motivator for these startups. Solving a local problem in a well-designed and solidly-engineered fashion is a motivator, and that’s a lesson that I think startups everywhere can learn from.

The road to startup success is difficult anywhere, and given the infrastructure and historical constraints, it’s even more challenging in Cuba. However, as the data bandwidth and the flow of information improves, Cuban startups will continue to connect with entrepreneurs throughout the world, making up for the lack of successful startups currently present there. They will gain access to the same tools and resources used elsewhere, and will continue to adapt them to suit their needs.

Expanding the existing data pipe is a less daunting task than fixing generations of crumbling architecture.

Expanding the existing data pipe is a less daunting task than fixing generations of crumbling architecture. As Cuban entrepreneurs continue to connect, design, and build their products, Azúcar Valley is likely to pop up on the radars of startups and incubators throughout the world.


About

Marcelino J. Alvarez is founder and CEO of Uncorked Studios, a product design company focused on the intersection between people and the physical environments in which they use their products. His responsibilities include shaping the company’s vision and strategy, business development, and community outreach.

Uncorked envisions a world where innovation applies to entrepreneurs, non-profits, and the world’s largest brands in equal measure. They help teams build products with purpose through their shared expertise, space, and financial resources. They are not bound by history, politics, platforms, or place.

Marcelino attended Duke University, where he earned his Bachelor of Arts in International Relations, minored in Spanish Literature, and a received a certificate in Film & Video Production. He is a recipient of the Portland Business Journal’s 2016 Forty Under 40 award.