Can we "Entrepreneur" our way out of bad leadership?

This post was inspired by a recent article on Quartz about Africa and how it can succeed through Entrepreneurship. The author writes:

“Development isn’t a linear process, and innovation and entrepreneurship alone won’t solve governance challenges or build strong political institutions. But market-creating innovations are often what begins the process of societal transformation, especially in poor countries. Though entrepreneurship is by no means a substitute for good governance, it is the best vehicle to achieve it.”

This resonates well with many Latin America countries where a big part of the economic and social stagnation comes from political institutions and their failure to adopt progressive policies that balance power with economic growth. Aside from Africa, Latin American countries have had the slowest growth and innovation of the entire world.

Entrepreneurship is not the absolute solution to poverty, but creating value comes from the most part from building businesses and shifting wealth into the hands of people that didn’t have access to it in the first place. Healthy capitalism with the right distribution, is a formula for value creation. With value creation comes prosperity.

A few organizations that are helping create and accelerate companies in Latin America. Just to mention a few:

Then, we have a some venture capitalist firms that are funding LatAm startups:

(Note: if you know other important organizations please send them)

There are other organizations out there helping as well, but Latin American needs even more. In the United States, there are hundreds, if not thousands, of organizations that help entrepreneurs build their companies. That is a lot more than what we see in Latin American countries, which combined have twice as much people as the US.

That’s not to say that there’s a direct correlation between the amount of organizations helping entrepreneurs and economic growth, but it certainly helps to have institutions created to support and encourage more entrepreneurship.

As big cities in the United States and Europe become more expensive to live in and immigration laws strengthened, it’s possible we begin to see a clear shift from entrepreneurs building their companies in their native countries rather than migrating to other parts of the world. In addition to this, it’s never been better to build companies remotely given how good remote-friendly tools have blossomed in the past few years.

Latin America needs more entrepreneurship to help beat economic slowdown and challenge the political status-quo into the future.

Cubanology

Joining the Mobile Era "after" Communism

This post is based on my own experience, research done while visiting Cuba, and reading from different sources.

Driving down the famous “El Malecón” boulevard in Havana, Cuba you’ll encounter a beautiful and serene bay with dozens of fishermen passing time, chatting about life and listening to music on their old radios while they focus on the catch of the day.

Daily life in Cuba is pretty simple. Outside of working for the government or tourism, there isn’t much else happening in the country to the visible eye from an economic standpoint.

However, that’s been changing as of recently.

We wouldn’t think of Cuba as a pioneer in technology and entrepreneurship, but in the past few years, Cubans have seen a significant rise in smartphone adoption and internet connectivity, led in part by more relaxed rules on censorship from the government and some investments in telecommunications infrastructure.

Current State

On my recent trip to Cuba I met Laura (redacted her name for privacy), a 29 year old psychologist who currently works at a small boutique hotel around El Malecón, where I was staying. After been shown around my accommodations, we began chatting about Cuba from her perspective. I wanted to learn what the state of things were since Fidel Castro, Cuba’s infamous leader, died in 2016.

She mentioned that Cuba was somewhat different now. People have more “freedom” – art events and music festivals are common now, and with tourism booming, opportunities have not been better. But from a professional and economic standpoint, she mentioned “studying a career at the university is not worth it, unless you’re just interested in learning and not making a living.”

Laura left her profession as a psychologist at a local hospital in order to make a better living assisting guests at the hotel. As a psychologist, she earned about $40 USD a month, just in line with the average monthly income for most Cubans. Working at the boutique hotel, however, allowed her to earn around $300 USD per month instead of that meager “government” salary. With this substantial increase in income she’s now able to sustain life at home by taking care of her aging parents. She now also has access to many things most Cubans cannot afford, better food, premium beers, and tons of burgeoning entertainment.

This story repeats itself around the Island for most Millennials and Gen Z’s. If you’re not working in tourism/hospitality, it’s very likely you’ll be amongst Cubans earning just enough to go by. The future is bleak if you don’t do something a bit different.

This is what some hope the recent opening of the internet helps change Cuba.

The Internet in Cuba

In the early 1950’s, Cuba was overthrown by a few revolutionaries whom we’ve heard and read so much about, Fidel Castro, Ché Guevara, and Camilo Cienfuegos, among others.

Since then, Cubans have had very limited access to the outside world and, for that matter, to any widespread innovation brought by the internet.

In 2013, for the first time the Cuban government approved the “opening” of the internet to a few areas in the capital city of Havana. Unfortunately, these were constrained to specific “plazas de navegación” or public squares with limited internet access points. Think of these as “cybercafés” (without the cafés) where Cubans could gather to consume vast quantities of internet content.

Back then (and still today), however, only those who could afford to buy an internet connection could access it. It worked just like a payphone. You’d pay for the time you wanted to spend browsing.

Access to different parts of the internet were also prohibited. Major international websites were intentionally blocked. The government tried pushing a few local websites, from local newspapers like Granma to email services like Nauta, which can only be accessed from within Cuba. Using the internet for the first few years wasn’t really that useful. It was a closed ecosystem.

If you pass by any of the plazas today, you’ll still notice people squeezed together looking at screens, endlessly scrolling through Facebook or Instagram - passing time.

Smartphones

Quickly after the introduction of the internet, smartphones began to surface. The government started selling devices, however, at obscene prices. All through the retail branches of the government-owned communications’ company, ETECSA. The high prices drew Cubans to find cheaper alternatives in the black market.

A Cuban’s monthly income is roughly between $40 - $100 USD. As a result, unless you work in the government or are married to a foreigner with a local business in Cuba, your ability to buy a smartphone is very limited.

For context, an unused 2015 Samsung Galaxy A5 retailed globally for about ~$500 USD when it came out. Four years later the same phone, sold through ETECSA as a 2017 model, costs $350 CUC which is equal to $350 USD ($1 CUC = 1 USD). It takes any Cuban at least ~9 months to afford this phone. This excludes any data package needed to access the internet.

As a way to bypass the government and its prices, smartphones have been imported from places like Panama, Venezuela, and Mexico by Cubans who’re able to travel abroad. Most imported smartphones are of Chinese brands like Oppo or Huawei. Some are lower-quality phones, like Chilean-owned Itelecom which is not even known for making phones outside of Cuba.

Still expensive for most Cubans, “illegal” imported smartphones are 20-30% cheaper than those sold by the government at the ETECSA branches. These smartphones are also guaranteed not to have been meddled with by the government which is known for practicing real life Orwellian-type control over its citizens.

Family members and tourists visiting Cuba have also left behind new technology. From old laptops, and USB drives (filled with movies, music, and news), to iPods, and other devices, these items have contributed to the flow of foreign information and digital entertainment into Cuba.

I’m not sure how many smartphones are as of today in the hands of Cubans, but from what I was able to see in the parts I visited and with a total population of close to 12 million Cubans, unless wages are increased or payment plans are established, it’ll take many years for their widespread adoption.

Mobile Internet

Last year on December, the government allowed citizens for the first time to purchase 3G-speed mobile data plans to access the internet “from anywhere in Cuba”, as they stated on their propaganda.

This meant so many things for Cubans. For starters, that they would no longer be constrained to the “plazas de navegación”. They could now have internet access while on the go.

You may be reading this and thinking, “well interesting but 3G is devastatingly slow and old technology”. Indeed, but imagine going from being physically constrained to a public square to now being able to access the internet from your phone anywhere you want. Information and communication at your fingertips.

In more advanced countries we surely take it for granted. But speed and connectivity are exactly what allow us to move fast on daily basis and innovate at the speed we are.

Tech companies around the world also face challenges when developing apps and tools for countries where speed is slow and connectivity is limited. Facebook, for example, developed “Facebook Lite”, a lightweight app with only the core features of the main app, in order to give access to citizens in places where data is expensive and limited. The lite app works on phones with low memory and allows frictionless access to Facebook’s different tools.

The lack of private and public investment in technological and communication infrastructure has definitely left Cuba behind other countries. Nonetheless, the move to sell smartphones and mobile data plans is a good start.

Data Costs

This sounds like they’re making good progress, because they are, but there’s a huge caveat in all of this – it’s still extremely expensive for the average Cuban to buy data plans.

Data plans cost either $7 USD for 600MB or $10 USD for 1GB of….3G speeds! If you’re in the normal income level for a Cuban, this means that 600MB of data will cost you roughly 18% of your income while the majority of the world pays less than 4 - 5% of their income for 4G mobile data plans.

As they say, necessity is the Mother of Invention and Cubans have data needs. As a result of expensive data plans, instead of downloading apps straight from an online app store, Cubans share apps and content through bluetooth or apps like Zapya. This allows them to save on data. In just a few days an app can go from a few smartphones in Havana to the rest of Cuba. Early adopters work as distribution nodes.

A New Cuba

Regardless of the slow adoption, limited connectivity, expensive hardware, and cost-prohibitive data plans, a new digital Cuba seems to be emerging. While speaking with Laura, my hostess at the hotel, she mentioned that Cuba will be different in the next decade. The government is finally paying attention to younger generations.

Now, it’s very common to see groups of teenagers participating in state-funded events that push development of technology and art programs. Independent groups are also forming around these events and many others far from the capital-city are creating their own. Software developers are starting to build formidable apps to solve some of Cuba’s challenges and groups of non-developers are doubling down on music and the arts.

Opportunity

As Cuban entrepreneurs get better informed, get curious, and thirsty for more they’re starting to get online and find opportunities.

An interesting fact about Cuba is that education is quite good. If you want to learn, you can go learn just about anything from various languages to medicine, engineering, and math. As a result of word of mouth and tourists chatting with the locals, Cubans have discovered about different websites they can use to export their education. For instance, Laura (my hostess at the hotel) knows Spanish, English, French, and Italian, all learnt at school in Cuba. She recently began earning additional income as well by working as a translator for different agencies in France which pay anything between $1-5 USD per page. All of it because of the internet.

Apps

Others are beginning to replicate marketplaces and concepts they’ve seen online. As an example, a new Uber-like app was recently launched called Bajanda. In Havana most people rely on public buses and taxis to move from place to place, thus the city is packed with old classical taxis (that double as tourist cars) and the newer state-sponsored taxis using Russian-made Ladas’.

The group behind Bajanda was able to connect the dots between supply and demand, and launched their Android-first version of the app connecting taxi drivers with users looking for transportation.

According to an old article I found, the app has had some success and indeed when you open the app in Cuba (I used Laura’s Samsung phone) you could see the cars driving around. To my surprise, the team recently got in touch with me through twitter and mentioned they now have over 11.5K downloads from the app store with “a decent fleet of drivers all around the city”. This might not be telling of its reach since most people transfer apps in Cuba by way of bluetooth to avoid burning data, however it tells you that they are seeing positive traction of the app.

Social media cannot be ignored either. Just like in every part of the world, influencers have overtaken Cuban’s social media networks. From Facebook and Instagram, to now TikTok, hundreds of Cubans have gained popularity (link to article in Spanish) through different mediums. They’re taking advantage of a digital layer that is very hard to shut down.

I saw how important self-expression and individuality was amongst younger Cubans and have no doubt that social media will cause major impact in the coming years as a powerful tool against censorship.

The Future

Aside from their (very important) political issues, Cuba is making progress as fast as its system allows it to. A new generation of entrepreneurs is not waiting to happen, it’s happening. With groups forming and demanding cheaper and faster internet and with increased interest from companies and entrepreneurs from around the world, I’m hopeful that a new tech-driven society will bring back Cuba to its glory days.

I’ll finish up with this quote from Ernest Hemingway who spent valuable time in Cuba and was influenced by its uniqueness.

“Now is no time to think of what you do not have. Think of what you can do with what there is.” – Ernest Hemingway

Well said, Ernest.

Killing Time: Internet Usage

In Latin America and developing countries

Tandela is a newsletter about the intersection of technology & entrepreneurship in Latin America. From time to time, I digress into some topics of interests to draw comparisons to Latin America.

I recently read an article on The Economist that shines light in the fact that leisure drives internet usage in India and other developing countries around the world where internet adoption trends are similar.

The author points out that already developed countries (think the West) expect those from developing countries to use the internet to further their lives professionally speaking. In other words, that access to internet is expected to be used primarily by the less educated and poor to become both more educated and wealthier instead of using it to entertain themselves and other leisurely activities.

Research, however, proves this is not the case. People in developing countries are far more likely to use the internet to entertain themselves and to communicate with others, but not necessarily use tools to enrich their lives professionally. Above all, the dominant applications used in these countries are for consuming content rather than apps that would specifically help them with their work or further their knowledge. Empirical data also proves that most people in developing countries are drawn to videos more than anything. Other forms of entertainment like games, are also as popular as ever.

Connectivity has, of course, made everything more ubiquitous.

As mentioned in the article, smartphones have unlocked access to knowledge but it’s mostly used to do “timepass” – the Indian-English word for “killing time”. Killing time is now a popular term among consumers in countries like India, where “boredom” has been replaced with apps on smartphone usage.

Consumers’ daily lives are being shaped by internet access as internet access is shaped by whatever apps consumers have on their phones

This phenomena is spread worldwide as smartphone adoption is higher than ever. But researchers, economists, and historians are concerned by how leisure activities are predominant in countries where poverty is higher and education less prioritized.

Latin America

I looked at AppAnnie’s data, and analyzed the top 10 apps for Latin American countries (from Mexico all the way south to Argentina) in the past few months. Of the top 10 free downloaded apps the distribution often goes as follows:

  • 30-40% communication

  • 40-50% entertainment

  • 10-20% games (entertainment but big enough category of its own)

  • ~20% transportation

You can see that about 50-70% of the apps are predominantly entertainment in nature – be it YouTube for watching videos or Sand Balls, a game. This trend also hasn’t changed much overtime, what usually changes are the apps they use, specifically games as their popularity fades when new games come to market.

If we take a step back and analyze how consumers are downloading these apps in the first place, we’ll see that in different countries the distribution of apps is influenced by one, or all, of the following characteristics:

  • wireless carrier’s deals with global tech companies (i.e. Facebook + Reliance Jio in India)

  • access to data (packages and their affordability)

  • income levels / social class (often driven by location)

  • social influence (friends/family/colleagues)

Internet access is complicated and very fragmented depending on the characteristics above how they have been executed in a country.

Wireless Carriers + Global Tech Companies

Global tech companies, and owner of different apps, often partner up with wireless carriers to reach more customers and give them more access to a wide range of different apps. While often good in their intentions, in practice the approach is questioned as they become proxies for their own apps and have much control of what is consumed via smartphones.

Access to Data

Access to data is also fragmented, although it’s been improving dramatically over the years, some consumers still have trouble gaining access to reliable and fast data. In some countries, for example Cuba and Peru, Android users share their content via bluetooth or share popular apps via a service like Zapya, in order to save on data or having to download them which uses data. They have to spend data wisely. This also means that smartphone users limited to access data means choosing between doing some things and not doing others. If given the decision, would they rather watch YouTube videos or use the limited data to access online courses?

Income Levels

Income levels also affect internet usage and those of apps. Smartphone users with low income levels often only download apps that are free from their respective app stores. Free apps tend to have ad-driven business models and are, unfortunately, large data-hoarders.

The poor and less educated get the end of the stick. As this research paper from the Washington University Law Review on Privacy, Poverty, and Big Data: A Matrix of Vulnerabilities for Poor Americans, argues:

The Article…discusses three scenarios in which big data—including data gathered from social media inputs—is being aggregated to make predictions about individual behavior: employment screening, access to higher education, and predictive policing. Analysis of the legal frameworks surrounding these case studies reveals a lack of legal protections to counter digital discrimination against low-income people..

If poor Americans are the least protected regarding data privacy, imagine those in countries where legal protections are, perhaps, non-existent.

In Latin America, we see the distribution to be quite similar to developing countries in other parts of the world. Since between 50-70% of the top apps in LatAm countries are in the entertainment category, we could argue that time spent on these apps is really high and inevitably contributing to the “killing time” phenomena.

Historically speaking, entertainment has been extremely important for shaping cultures. Arts, music, and games have transformed how a society evolves. We’ve seen this in ancient civilizations from the Ancient Egypt to Chinese dynasties, where entertainment played a huge role in shaping their economies and development of their cultures.

But the question is, ¿does entertainment nowadays translate into professional and/or economic growth?

I’m not sure. But it seems that it’s now easier to spend copious amounts of time killing time than before smartphones arrived.

We also know that access to internet in developing countries is happening at a faster rate when compared to developed countries at the same point during their adoption of similar technology.

I would argue, however, that the issue with new access to mobile phones and internet usage is a lack of education regarding usage of these to further lives. I remember growing up in school we were introduced to desktop computers first by learning from educational programs that would teach anything from math to English grammar. We were conditioned to think of a computer as a “bicycle for the mind”, whereas I’d be surprised if there were any sort of curriculums in developing countries as how to use a computer/smartphones to expand knowledge and make work more efficient.

Perhaps, the fast spread of smartphones has led us to take internet access with regards to education, for granted.

Additionally, it is known that major tech companies are investing in their own product adoption in developing countries. Unfortunately, many of their business models are to optimize for engagement, potentially without any accountability of the harm it may be causing. It may also be leading to very little understanding of the opportunity cost of humans utilizing smartphones for entertainment.

I’m optimistic however that internet access for the less developed, generally speaking, is best for humans. I rather have users with access to any sort of information at their fingertips than not.

But, if every person with this tool in their hands would have the opportunity to learn the ways to use their devices to find new opportunities and further their knowledge – technology would be even more ubiquitous than it is today.

Why LatAm, why Tandela, why now?

A weekly newsletter on Latam tech & startups...

Back in late 2017 I spent 6 months around Southeast Asia to take some time off after working in tech for a few years. My plans were to travel, see and experience Asia (which was always a dream of mine), and recharge for whatever I chose to do next. The trip sparked a desire in me to write once again, but this time related to an underserved topic.

Inspired by Asia

As someone who loves technology and its influence, my first impression about SE Asia was that of awe. It was an eye opening experience. I had been to many parts of South America, Europe, US, and North Africa but never so far east. I was lucky to spend time in Indonesia, Thailand, Malaysia, Vietnam, Cambodia, and Hong Kong.

From mobile apps to fast and cheap connectivity, the energy around new startups, new funds pouring capital into different ideas, and many trying to get a piece of the 600+ million mobile phone users (excluding China) going online was enough to convince me the east had nothing to envy the west. In fact, it seemed far superior in many areas regarding tech adoption.

I worked remotely from packed co-working spaces in Bali. I used GoJek to get food delivered. I shopped on Tokopedia - “the everything store” in Indonesia. I visited the “most popular city” for digital nomads in Thailand. I took a glimpse of what was happening in modern Kuala Lumpur around tech. I got obsessed in the rapid growth of the Vietnamese economy and tech adoption. I hailed tuk-tuk’s with my phone and met local tech entrepreneurs in Cambodia trying to change the genocide-torn country from the ground up. And finally, spent time in Hong Kong trying to understand its past history and its recent openness towards cryptocurrency - exciting nonetheless!

What other places looked like or felt like Southeast Asia?

After my travels I began to think, “what other places looked like or felt like Southeast Asia?.” I started looking closer to home, Latin America. I realized that during the 10+ years I had been away from my home (Puerto Rico) - perhaps ignoring it - there was an increased interest from global venture capital funds investing in Latin American startups. In fact, large companies were making huge investments, some mergers were occurring, and acquisitions were happening in the area.

I got interested!

Latin America

I began to read about what was happening in LatAm, but couldn’t really find much information. Most blogs are updated irregularly or without much depth in certain topics. I felt there’s a need to get more information about what’s going on on these countries - some more developed than others - in order to understand the respective markets.

To give a bit of perspective on LatAm. Countries like Mexico, with 130 million people, and Brazil, with 210 million people are behemoths starting to get some piece of the action. Colombia and Argentina, both with near to 50 million people each, are tech hubs full of programmers who have been exporting their skills to richer countries for years now. And Chile, the thin west country in South America, has one of the most solid economies in the world, with an ever-growing middle class that serves as an example for the rest of the hemisphere.

In short, there’s a lot going on in Latin America and we just don’t know it yet.

Tandela

This is where Tandela comes in. I believe LatAm countries are set to change the landscape of the southern hemisphere in the west in the next few decades, just like Southeast Asia is doing for the east. As such, I’ll be writing about tech in LatAm.

If you’re wondering why “Tandela”, well, “Andela” means messenger in Greek and the “T” is simply making a statement of the letter “t” in “LatAm”. I also think it sounds right.

I’m not sure exactly what the format will be, but you can expect stories, articles, and/or snippets of the future published once a week, or when I obtain enough relevant information to share.

With that end, I hope to be as insightful as possible to the curious about tech being used in other parts of the world, specifically Latin America.


If you know anyone who has information or would like to contribute in either English or Spanish, please forward this story/email or tell them to write me at feed@tandela.com. You can also follow me on twitter: @ramoncacho.

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