Cuba Lands in New York City: Innovadores Update, July 2017

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This week marks another milestone for Innovadores: for the third year in a row, our Cuban interns started their internships in New York City. Our interns this year are:

  • Alicia Rodríguez Milhet, fourth year Industrial Engineering major at the Universidad Tecnológica de La Habana (CUJAE)
  • Gabriela Hernández Rodríguez, fifth year Industrial Design major at the Instituto Superior de Diseño (ISDI)
  • Alessa Pérez Roque, fifth year Computer Science major at the Universidad de La Habana (University of Havana)
  • David Domínguez Francisco, third year Physics major at the Universidad de La Habana (University of Havana)
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The four will join us for six weeks, living and working in New York with other interns from all over the world. As in the past two years, three students will work for startups enrolled in Manhattan incubator Grand Central Tech. This year, we’ve expanded our program from tech to design and fashion, with our intern Gabriela heading to work at trend consultancy Fashion Snoops, run by Innovadores advisor Lilly Berelovich. Read more about this year’s program.

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Though we’re certainly excited about our intern program, we’ve been hard at work on several other initiatives the past few months–including mentorships, exchange trips, events, business opportunities and, of course, offering our opinion on Trump’s recent announcements.

Trump Keeps the Spotlight on Cuba

The big news in Cuba this year was President Trump’s decision to roll back some of the reforms put in place by President Obama. Though these will likely decrease the number of Americans visiting the island, they didn’t put a damper on any of the Innovadores activities. Though strong on rhetoric, the policy changes were relatively minor, and shouldn’t have a tremendous impact on our teams. They will, on the other hand, impact any Americans interested in visiting the island.

“Trump Administration Announces its Cuba Policy”
John Caulfield, Former Head of the US Interests Section

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In front of a Cuban-American crowd in Miami on June 16, President Trump unveiled his Cub

a policy. Despite his criticism of the Obama Administration’s normalization of relations, Trump left in place almost all his predecessor’s regulatory changes, except for one: Americans will no longer be authorized to travel on an individual people-to-people tours. They instead must travel on group trips licensed by the Treasury Department’s Office of Foreign Assets Controls (OFAC).

Trump also announced a new policy to deny US dollars to the Cuban Armed Forces, which control much of the hotel and tourism infrastructure. As a result, it is possible that certain hotels, car rental companies or restaurants will be declared off limits for American visitors. Dealings with Cuban enterprises not directly administered by Cuban Armed Forces were not mentioned, but how the Trump Administration uses its discretionary power on these licenses may have a greater impact than the measures announced in the speech.

The Cuban government response was measured, criticizing the US demand for political changes, but remaining open to dialogue on topics of mutual interest. Over the last few years, the US has overtaken Venezuela as Cuba’s largest source of foreign exchange due to remittances and investments by Cuban-Americans, and expenditures by other American visitors. Despite the policy changes announced on June 16, that trend is likely to continue.

There are currently bills in Congress to ease agricultural trade restrictions and to abolish travel limitations. Having asserted his anti-Cuban credentials, Trump may have leeway to sign a bill easing these restrictions. On the Cuban side, there are now clear advantages to changing the ownership of military-owned tourism businesses to civilian entities.

In February 2018, the Cuban presidency is expected to transition from Raul Castro to an unannounced successor. During this time, Cuba may accelerate Raul’s market opening reforms, especially in the high-growth areas of agriculture and property development. The new leadership will need to make hard decisions about these and other sectors if they want to secure the future of Cuba.

Want to legally visit Cuba? Travel with Innovadores.

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Project and Teams

As we’ve investigated the Cuban tech and design space, we’ve found a sweet spot where we think we can make the greatest impact: working with teams that are ready to bring their work to the global community. These teams have the talent and ideas, and we have the knowledge, resources and connections outside the island to make their dreams a reality. Below is a cross section of the groups we think have the greatest opportunity to make an impact, both for Cuba and the international community.

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Rox950’s new line, Plata y Vino II, on display at their most recent show.

Rox950

The jewelry shop Rox950, founded by Rosana Vargas, is a can’t-miss spot in Havana that offers some of the island’s best jewelry. Now her goal is to bring her product beyond the boundaries of Cuba. The biggest opportunities are assisting her with marketing and promotion and finding a way to legally export her goods. She’s already off to a great start on her own, and even hosted an excellent fashion show for her new line, Plata y Vino II (Silver and Wine II).

NinjaCuba

NinjaCuba is a job posting website for people interested in hiring Cuban freelancers in software development and design. In just a few weeks since their launch, they already boast over 400 Cuban users, a remarkable feat in a country where only 10% of the population has internet in their homes. Founder Victor Moraton is looking for help reaching international customers interested in using their services.

Savior

Video gave development duo Johann and Josuhe continue to make progress and are nearing the release of their demo. The demo is already playable–as one of the geekier Innovadores team members can attest. They attended the eMerge conference in Miami several weeks ago, and Innovadores supporter and development/crowdfunding expert Dean Putney came down to meet them late last month.

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The Clandestina team on a supplier visit in South Carolina in May 2017.

Clandestina

Clandestina continues to move forward with their plans for US expansion. They officially found a US supplier, one of our attendees from our trip in March.

Encuadre

The Encuadre team has continued to refine their network for filmmakers, now expanding into online blogging and publishing on films and filmmaking.

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Trips and Advising

We hosted three trips this quarter: one group trip for the Entrepreneur’s Organization and two smaller bespoke trips to introduce some of our donors to the teams we’re working with in Cuba. As always, these trips not only give our donors a chance to see firsthand what we do every day, they help fund our ongoing operations. Learn more about our trips.

Entrepreneur’s Organization

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In May, a group of entrepreneurs from EO came to Havana for a behind-the-scenes peak of Cuban entrepreneurship. Keep Reading.

Gaming and Crowdfunding

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Video game enthusiast and software engineer Dean Putney came down to visit the Savior team in June. Dean was one of the main supporters on their Indiegogo campaign, which he knows a something about–he’s successfully crowdfunded projects in the past, and his company Glowforge raised $28 million on Kickstarter in 2015.

Software Development

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Innovadores donor and supporter Marina Carlson came down two weeks ago to investigate Cuban programming talent. In a crash-course, two day trip, we met with eight teams of software developers all over Havana and managed to find some time for a pit stop at one of Rox950’s fashion shows.

Fortunately, the new travel restrictions won’t impact any of our planned trips–currently scheduled for September, November and December. If you’re interested in joining us, let us know!

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Back from Havana, by Miles Spencer

2-co-founder-miles-spencer.jpgI’ve just returned from hosting another delegation of entrepreneurs and investors in Havana, and this trip was particularly enlightening. We’ve held a view that Cuba is 2-5 years from kicking in to growth mode, and that once it begins, it will move very fast. Which means you need to be here now. So what signs could one watch for as indicators that change will happen? Here they are, in no particular order:

The president will change: For the past 50+ years, the president has had the last name Castro, has been a general in the army, has been a revolutionary, and has been a party leader. It looks like in February, 2018, Raul will cede his position to someone that has none of the credentials above to influence others.

The Internet will be accessed by the general population: Cuba’s people are very well educated, which is amazing when you consider they’ve had no digital connectivity to the world for the past 20 years. Cubans have found their way around and into decent connections through cell phones, ETECSA internet cards and the paquete semanal packed with all of the week’s world news. In any event, the horse is out of the barn on connectivity, it’s just a matter of speed and cost now.

The Currencies will Consolidate: Cuba has a tourist currency, roughly tied to the dollar, but the locals use Cuban pesos. The exchange between the two is a 25x for citizens, but less for government enterprises–essentially subsidizing their costs and taxing any foreign entity’s payments. Great for the government, but not sustainable.

Interested in doing business in Cuba? Now is the time to start.

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Publishing and Press

In addition to our usual publishing on our blogInstagram, and our Facebook page, we also released a white paper in collaboration with the Family Office Association (FOA) on real estate in Cuba. Not a simple topic. Get a preview of the piece here and contact us if you’re interested in reading the whole paper.

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We were quoted in articles in the New York Times and Mic on Trump’s Cuba policy changes, as well as an AP story that was picked up by ABC News and the Washington Post, among others. We continue to believe that an important part of our work is bringing Cuba’s story to the world, fairly and accurately. Contact us or follow our blog if you’d like to support us on this mission.

Looking Forward

Despite the policy changes of the Trump Administration, we’re moving forward and we remain optimistic. With the leadership transition of 2018 looming, we think it’s critical to position ourselves, our partners and our teams to take advantage of whatever changes may come. If you share our vision, now’s the time to join us.

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