Cuba Has No Internet, But Has Plenty of Tech Startups

Cuba's startup scene is growing despite regulatory barriers and limited resources.

May 16, 2017 8:21 am

Cuban entrepreneurs are defying the odds to bring their technological ideas to life.

As if launching a startup isn’t tough enough, fledgling Cuban companies do not have access to the internet. Tech startups in Cuba are also forced to contend with a strict regulatory environment, harsh political climate, and limited resources. Despite the recent easing of sanctions by President Obama, challenges to Cuban entrepreneurs in cracking the market remain.

Three Cuban entrepreneurs discussed theses barriers and how their companies strive to overcome in during a panel at the TechCrunch Disrupt conference on Monday.

“I think Cubans are disruptors by definition,” Diana Elianne Benitez Perera said. “We always find a way to create the first world condition in our third world conditions.” Perera is the founder of an information service called Knales that delivers updates via text messages.

“Maybe we don’t have the internet, but we have the human resources,” Carlos Manuel García Vergara said. “We have talented people… so we managed a new way to create technology for offline environments.” 

Without a fiberoptic internet cable connecting the country to the web, Cubans rely on satellite links to get online. Those connections are slow and expensive, so about only thirty percent of the country uses them, according to a report from Freedom House

Many Cubans get their classic Internet experience through “el paquete,” a human-based delivery service in which hard drives full of media are exchanged. People can place orders for their favorite content, from American TV dramas and blockbusters to telenovelas, which are delivered weekly on thumb drives. “The paquete is the Cuban Cloud,” explained Bernardo Romero Gonzalez, creator of Cuban, an Amazon-like service for the diaspora to buy goods online for their loved ones in Cuba and have them delivered to the island nation. 

TechCrunch Disrupt NY 2017
(L-R) Carlos Manuel Garcia Vergara, Bernardo Romero Gonzalez, Diana Elianne Benitez Perera and John Biggs speak onstage during TechCrunch Disrupt NY 2017 at Pier 36 on May 15, 2017 in New York City. (Noam Galai/Getty Images for TechCrunch)

Cuban startups have the same needs that their counterparts elsewhere have, but face unique challenges. Vergara says the tax system makes it difficult for young companies to grow. In order to engage in the global economy, businesses need to travel outside of Cuba to get incorporated since they can’t do so at home.

Gonzales says his startup and others like it often runs into problems using digital services provided by U.S.-based companies like Paypal, Google, and Amazon Web Services simply because they’re operating out of Cuba. 

“When they see we are accessing their networks from the Cuban IP address, they shut us down,” Vergara explains. 

Many tech companies are uncertain about the regarding commerce in the country, but Vergara points out that Obama changed the law so companies no longer need OFAC licenses to do business in Cuba. “If you have the will to grow with Cuban entrepreneurs, you can do that,” he said.

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