Successful Entrepreneurs in Cuba
Cuba could become a hotbed of business innovation if its leaders can work to establish order; but running a company in Cuba remains daunting.
Cuentapropistas –private business owners–are prevalent on the island, running restaurants and art galleries, salsa dancing schools in homes, and fashion boutiques in old factories. These entrepreneurs play an essential role in preserving cultural heritage, supporting social causes, and shaping its future.
Yondainer Gutierrez was an unassuming software designer who co-founded AlaMesa (To the Table), Cuba’s inaugural restaurant app after government relaxed restrictions on private enterprise. However, as soon as operations got underway he encountered significant obstacles such as limited connectivity and difficulty hiring employees.
Fernandez’s company has grown quickly, employing 18 people and now operating from a storefront in central Havana. They offer tours around Havana in restored American cars as well as car and apartment rentals to tourists and visitors. Fernandez credits recent signals by the Cuban government that may allow foreign investment for equity in businesses as being instrumental in increasing employment – according to Fernandez.
But he continues to face obstacles, such as hiring workers with adequate digital media and online design skills, funding issues, limited technology access and government regulations that mandate having an exit strategy should they wish to transfer their company.
Many Cubans display an entrepreneurial spirit even under difficult conditions. Moonlighting engineers install satellite dishes in homes to watch forbidden television shows; and la bola, or bush telegraph, delivers news across Cuba days before it appears on state media outlets.
Entrepreneurs such as Gutierrez say making a living is one of the most precious rights of Cubans, particularly with President Trump’s hardline policy towards Cuba and an economy in decline. Yet they remain resilient by innovating new businesses while expanding the ones already established.
Leani Garcia serves as AQ’s social media and production editor. You can follow her on Twitter as @leanigarcia, while Russell Walker, clinical associate professor of management at Northwestern University Kellogg School of Management’s Risk Lab experiential course founder is our guest columnist for AQ. Walker has published two books: Winning With Risk Management and From Big Data to Big Profits: Success with Analytics while founding Kellogg Institute for Responsible Leadership as well as From Principles to Practice: A Guide to Effective Management.
Cuba’s entrepreneurs embody the spirit and philosophy of resolver. This famous local expression means people’s ability to do more with less resources while remaining inventive when faced with hardship.
As part of its effort to open up private enterprise on the island, Raul Castro began gradually liberalizing its economy in 2010, including adding licenses for renting rooms and cars and legalizing real estate transactions. Current President Miguel Diaz-Canel has extended this effort, permitting private firms to be created while making credit more available.
Entrepreneurs find surviving an economy which still struggles to meet demand an uphill struggle, facing myriad hurdles that range from complex government regulations and finding raw materials in countries which produce precious few products to struggling financially themselves. Even successful businesspeople face difficulties making ends meet; most do not own luxury cars or live in mansions while onerous taxes often consume up to 60 percent of income.
At this critical juncture, our research revealed a pressing need to connect Cuba’s new entrepreneurs to U.S. markets, prompting us to launch an experiential learning course and series of workshops designed to link Kellogg School of Management students with Cuban innovators so as to help expand their businesses. Furthermore, we partnered with the Department of Commerce in advocating for policy changes which would eliminate family remittance limits, expand banking services in Cuban Island banking locations and prioritize imports/exports that support entrepreneurs.
Meet the entrepreneurs paving the way for innovation on Cuba, and witness first-hand as they demonstrate the art of designing, improvising and thriving under scarcity on our new tour: Innovating in Cuba. Throughout your trip you will explore Havana’s vibrant arts and design districts; step inside a traditional Cuban paladar (restaurant); gain insights into its unique challenges; be inspired; and take away tools that will enable your own resilient business practices to evolve in Cuba.
When people hear “entrepreneur,” they likely think of someone starting a business or taking a risky venture. While starting one may seem appealing, it can be challenging in countries with restricted opportunities for private businesses – like Cuba.
Cuba has long been plagued with restrictive government policies that made investing or importing the necessary supplies almost impossible, leading to many failed attempts by foreign investors trying to do business there.
Cuban entrepreneurs have made great strides despite these difficulties, thanks to recent government changes that allow more jobs for private ownership and operation, giving people more chances than ever before to start their own businesses, known as cuentapropismo (which means on your own account).
Oscar Fernandez started a dried fruit business after government regulations allowed small enterprises to open. Thanks to a loan of $40,000 from abroad, he upgraded old equipment and expanded his operation, yet his dream of partnering with foreign investors to build a factory still isn’t possible due to current regulations.
Other entrepreneurs are creating apps to connect tourists with private guides, while more daring entrepreneurs are getting creative with the island’s communications infrastructure – like one Kellogg MBA student who used his software to develop a mobile app for local restaurants.
Cubans increasingly favor these innovative approaches as a means of bypassing long lines at state-owned restaurants and hotels while accessing cultural events via their phones. Success of such small businesses may prove essential to Cuba’s transition away from centralized economic systems.
Although the future of Cuba-U.S. relations remains unclear, these changes are clearly beneficial to entrepreneurs and their families. Removing restrictions on family remittances to Cuba from abroad as well as facilitating importation of critical items from America would provide significant impetus for Cuban entrepreneurship to flourish.
Ana Maria Torres & Maria Carla Puga
Havana still appears much the same to visitors as it has for decades, with people wandering aimlessly and neglected buildings, but on closer examination one finds an explosion of small private enterprises and pockets of encouraging prosperity – as well as money changing the lives of Cubans in general.
Ana Maria Torres and Maria Carla Puga are two musicians who have found great fortune in this reversal of fortune. Starting as homemakers of bracelets and necklaces, they now run Ama, a store and workshop with 12 employees that began producing its products two years ago. Furthermore, Ana and Carla received training in business practices at the U.S. Embassy – further proof that young entrepreneurs today may be less suspicious of American authorities than earlier generations of entrepreneurs.
The Embassy has been actively increasing economic opportunities for Cubans through various programs and initiatives, such as its Business Connect program which offers free, online business training. The aim is to assist Cubans in starting or expanding their own businesses by connecting them to global economies through access to financing tools services markets.
As Cuba is home to complex government regulations and high prices and importation duties for items they need for running their businesses – like hair salon equipment that’s made outside Cuba – it can be challenging to start and expand businesses here. Our conversation with entrepreneurs highlighted their need for greater access to funds and trade services that prioritise connections to international markets.
Join us on an upcoming journey to Cuba where we’ll meet some inspiring entrepreneurs and explore its food, art and design scene. This trip aims to educate travelers about Cuba’s resolver philosophy and innovative approaches that are driving its forward movement. You’ll have inspirational discussions with local business owners as well as learning the ropes of running a paladar (restaurant). For more details click here. Cuba Educational Travel is licensed under all relevant intellectual property rights agreements; reproduction without permission is prohibited.