Cuba’s emerging startup scene given a Canadian tech boost

Cuba's emerging startup scene given a Canadian tech boost
JACOB SEREBRIN
Special to The Globe and Mail
Published Monday, Feb. 01, 2016 5:00AM EST
Last updated Sunday, Jan. 31, 2016 5:32PM EST

Few countries are as technologically isolated as Cuba. Home Internet is
rare, data plans are non-existent and, in a country where doctors make
the equivalent of around $70 a month, paying almost $3 an hour for
government-run WiFi is too steep for many.

Yet, even here, tech startups are beginning to emerge and they're
getting some help from Canada. Montreal technology hub Notman House has
launched a program to give Cuba's nascent startup scene a boost.


"The idea of Develop Cuba is to create a seed fund and a way to support
and educate the community on how to build an ecosystem," says Noah
Redler, the campus director at Notman House and the initiator of the
Develop Cuba project. "The major obstacle they have isn't around talent,
it isn't around want or desire, it's literally just that basic seed
capital."

In Cuba, a little money can go a long way. So far, Develop Cuba has
raised a few thousand dollars to rent space for startup groups to meet
in Havana and bought a projector – a rare piece of equipment in a
country where even basic supplies can be hard to find.

The next step will be to send a group of mentors from Montreal to visit
Havana and work with local startups. If that goes well, Mr. Redler wants
to help open Cuba's first co-working space. The goal is to build
capacity for Cuban startups, he says. While Canadians may be helping to
get the project off the ground, it will be led by local people.

Internet usage has grown rapidly since the Cuban government lifted an
almost total ban on Web access in 2008. By 2014, the country had more
than three million Internet users, a little more than one-quarter of the
population, according to Cuba's national statistics agency. By now, that
number is almost certainly higher.

On a Thursday afternoon in mid-January, about a dozen people are
gathered in a public square in downtown Havana, looking at their phones.
A couple more sit on nearby benches with laptops. It's a scene that
would be unremarkable in Canada, but was extremely rare in Cuba until
just a few months ago.

In June, Etecsa, Cuba's state-owned telecommunications monopoly, cut the
price of Internet access in half and opened dozens of new WiFi access
points in parks and public squares across the country. More have opened
since then. Before that, getting online usually required waiting to use
a computer at an Etecsa outlet or a post office; WiFi was rarely found
outside of hotel lobbies. Free WiFi is still almost unheard of, and
Cubans have to prepay and show ID to get online.

For startups, "the most difficult part is accessing the Internet," says
Martin Proenza, the founder of YoTeLlevo, a website for booking taxis.
While his business is generating revenue, it's not profitable enough for
Mr. Proenza to afford home Internet. Instead, he relies on his day job
at a government-owned software company for Internet access.

The lack of mobile data means that Cuban apps are generally built to
work offline. AlaMesa, an app for finding restaurants, is fully
functional without an Internet connection. Its restaurant directory and
map are downloaded onto a user's phone. If a user opens the app when
they do have an Internet connection, the database is updated.
"Considering the insufficient connectivity infrastructure and cost of
Internet access in the country, an offline solution was mandatory," says
Alfonso Ali, AlaMesa's lead programmer.

But they also face a uniquely Cuban challenge. "Due to U.S. blockade
restrictions, we are unable to use PayPal or Stripe," Mr. Ali says. "So
standard operations like online booking, coupons, etc., are very
difficult and costly to implement."

The Cuban government appears to have taken little notice of the
country's growing startup community, but there are fears about what will
happen if they do. While economic reforms that began in 2008 have opened
the door to an increasing number of private businesses, there are no
provisions for tech startups, making them illegal.

"You have to keep yourself under the radar," Mr. Proenza says. "But is
it a big concern? No. Really, the state is not running after people for
creating online businesses."

He does think the government will allow startups to operate legally in
the future, and says that's a view shared by others in the startup
community.

In Montreal, Mr. Redler says he sees some hopeful signs –
accommodation-rental site Airbnb was allowed to enter the Cuban market
earlier this year; there are now over 2,000 listings. But he says he
doesn't expect change to come rapidly.

Despite the challenges, Cuban business owners say they're optimistic
about the future. "The Cuba education system is very good, so it's very
easy to find talented people to work on any field of innovation," Mr.
Ali says.

"We used to say 'need is the mother of invention,' so people in Cuba
have good talent, skills and the mindset to find solutions to almost any
problem."

Source: Cuba's emerging startup scene given a Canadian tech boost - The
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http://www.theglobeandmail.com/report-on-business/small-business/startups/cubas-emerging-startup-scene-given-a-canadian-tech-boost/article28474234/