By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
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By Michael E. Miller
By Kyle Munzenrieder
By Michael E. Miller
Hardly a week goes by in South Florida without a new dot-com opening an office, tossing up a splashy billboard, and then issuing a hyperbolic press release on the riches that lie ahead in Latin America. April's NASDAQ crash appears to have done little to dim the fervor of local e-commerce's true believers. Latin America is the promised land and Miami its gateway.
That Pollyanna spirit was on full display at the July 11 First Tuesday meeting, one of Miami's premiere venues for Internet workers busy networking. Early that evening 600 fresh-faced movers and shakers crammed into Level, the South Beach nightclub, to hear a panel of local dot-com execs wax poetic on the glorious future of online marketing. Panelist Maria Cormane, director of Latin-American media services for Real Media, crowed that her company was moving beyond operations among the usual suspects of Brazil, Mexico, and Argentina. Real Media was now turning its investment eye to the lucrative terrain of El Salvador and Colombia.
Obviously if El Salvador, a nation which until only recently counted gastrointestinal infection as its leading natural cause of death, and Colombia, corporate kidnapping capital of the world, are ripe for Internet development, then allMiami's conventional business wisdom needs to be rethought.
So Kulchur stepped up and earnestly asked of the panel: "What is the outlook for e-commerce in Cuba?" Pandemonium immediately ensued, the noisy murmuring and nervous laughter broken only by Cormane angrily bellowing into her microphone: “Whyare you asking this question?” The reply that Cuba certainly seemed to be an untapped market (especially compared to war-wracked Colombia) did little to ease the aggrieved look on Cormane's face. Staring back at Kulchur she stammered, “Who are you?”
Other audience members had a less pained response to the notion of bringing the Net to Cuba. During the cocktail-fueled schmooze session that followed the panel discussion, several attendees approached Kulchur with tales of their company's designs on the forbidden isle. One gleefully related that though his European-headquartered firm had only just announced plans to open a Havana field office in 2001, the waiting list of employees seeking to transfer there was already longer than for any other destination around the globe.
At least one Internet entrepreneur isn't waiting until next year. Stephen Marshall has the proverbial office with a view. From his desk the 32-year-old Briton gazes out over his laptop through sliding-glass patio doors to take in Havana's Marina Hemingway and the rows of gleaming yachts moored in the sparkling blue water, many flying American flags.
“I don't see post-, free, or any kind of political angle when I choose to work somewhere,” Marshall explains, describing a career trajectory that has taken him from France in the late Eighties to Russia in 1992 and finally to Cuba in May 1995. “If I see opportunities and I think those opportunities are worth capitalizing upon, then I'll make a move. It has nothing to do with political thoughts.”
Marshall's First Investments International has its fingers in several pies, but its primary concern now is the Internet. He operates no less than 34 different Cuba-themed Websites, including CubaSports.com, CineCubano.com (the official site for ICAIC, the country's film institute), as well as the (still-under-construction) official site for the Latin-American Film Festival, a star-studded, trés hip annual event that has become the Southern Cone's answer to Cannes, with Fidel mixing it up alongside Hollywood figures at postscreening parties.
The most active site among Marshall's Internet menagerie is GoCuba.com, an online travel agency that is seeking to corral a chunk of the 1.6 million foreign tourists who visited Cuba last year, including more than 150,000 from the United States. He claims GoCuba.com grossed more than $120,000 in bookings for May 2000 alone, a figure he expects to explode once U.S. travel restrictions and the trade embargo are lifted, developments he sees as both inevitable and imminent. When that happens he envisions a flood of Cuba-bound American tourists. Traditional travel agencies will be still be scrambling while GoCuba.com cashes in.
“Just by looking out the window at the palm trees, it's obvious that this is a desirable place to come on holiday,” Marshall says in his graceful British accent. Motioning to the marina's waters just behind Kulchur, he continues, “There is also a convenient angle to it. Ninety miles from [Cuba's] shore is the largest amount of foreign investment capital in the world. There's an immense number of highly educated, very intelligent individuals here who could easily lend a hand to high-tech ventures. Look at postwar Germany and Japan. They received financing from the same people who were dropping bombs on them. With all these things considered, if you're an entrepreneur, then there's absolutely no reason you wouldn't bet on this type of country.”
That kind of thinking infuriates many in Miami's Cuban-exile community, who accuse people like Marshall of pumping economic life into a moribund Castro regime, a regime they believe would otherwise collapse. "Yeah, I get a few e-mails from Miami," he remarks dryly. “'Why are you assisting the government? Aren't you ashamed of yourself?' Typical stuff.” So ishe ashamed of himself? How does he reply to those critiques?
Marshall's eyes narrow as he snaps, “That sort of shallow understanding of what's taking place here doesn't even merit a response.” His voice rises slightly as he continues: “There are far more people out there who are complimentary. I get a hundred e-mails a week from all corners of the world saying things like, “We're a school. Our students were working on Cuba and its past and found your pages to be immensely important to their studies. Thank you for the information.' That'sthe real joy. Then out of a hundred e-mails I get one e-mail from some guy in Miami who says, “Why are you supporting all this?' It's easily cancelled out by the people who are tellingme why I should continue doing this.”
Hardly a stranger to controversy, Marshall first made headlines in May 1999 when RE/MAX International, one of the United States' largest real estate firms, sued him for operating a RE/MAX franchise in Cuba in apparent violation of the U.S. embargo. Once the presence of a RE/MAX agent buying and selling properties on the island hit the American press, the Denver-based company's president, Daryl Jesperson, righteously denounced Marshall's “illegal activities.” Jesperson, of course, had a harder time explaining why his signature was on RE/MAX sales-award plaques and training certificates in Marshall's Havana office. “[RE/MAX] thought their attorneys had found the magic agreement to get around U.S. laws,” Marshall told the Associated Press at the time. “They knew full well I was here. Now they've had some sort of memory loss.”
Despite that chastening experience (should Marshall set foot on American soil today, he would be subject to a contempt-of-court arrest warrant), he remains bullish on foreign Net investment. “Cuba is a spectacular country to commence a venture within,” he declares. In fact he advises fellow Europeans to forget about Miami's much-vaunted Biscayne Corridor and instead head straight for Havana. “For example the restaurants here are all owned by a few chains, so unlike South Beach, you don't have to wander up and down the street and sign separate deals with every single restaurant, one on one: This guy's French, the next guy's German, then some guy from Japan who doesn't understand what you're saying. In Cuba you can sign them all up at one time.” He pauses, marveling in the concept's simplistic beauty. “That is a dream from a marketing standpoint.”
It's a five-minute ride to the building housing Grupo Internet, the Web design firm Marshall co-owns in a joint venture with the Cuban government. Gunning his car through the leafy streets of Siboney, a western suburb of Havana, Marshall assesses his online travel competition. Cubaweb.cu (founded by a Canadian businessman and recently sold to the Cuban state) may have certain attractive services such as a partnership with auto rental agency Cubacar, but Marshall dismisses their management team as old-school bureaucrats who lack Net savvy.
Another non-Cuban is currently making a play for online travel to Cuba: Philip Agee, the colorful ex-CIA agent who, in 1975, renounced his past with a vengeance, publishing Inside the Company: A CIA Diary, an exposé of CIA dirty tricks against leftists throughout Latin America. Subsequently vilified by the U.S. government (his passport was revoked in 1979; former President George Bush claimed Agee's book was directly responsible for the exposure and assassination of an undercover CIA operative in Greece), Agee has been only too happy to return the sentiment. On his Cubalinda.com he boasts that patronizing his travel Website is "another concrete way to support the revolution."
As trees whiz by, Marshall scoffs at Cubalinda.com: “You're telling me somebody in Tennessee is going to want to book a trip to Cuba with an ex-CIA agent that the U.S. government considers an enemy? Who wants to worry about that?” Pulling the car up to a low-slung, decrepit concrete building, he hops out and leads the way. There, inside one air-conditioned room, sit Grupo Internet's eight twentysomething Cuban employees, hunched in front of their computer screens. Busily coding away, their appearance isn't much different from Web designers back in the States: a nondescript geekish fellow works next to a guy in a flowing purple button-down shirt, earthy sandals, and past-his-shoulders black hair.
The firm's Cuban manager, 34-year-old Camilo Sanchez, steps into the lobby and takes a seat next to Marshall on a ratty-looking couch. Sanchez begins speaking of electricity shortages and the related slow pace of computerizing Cuban society, a point almost absurdly underscored by the stifling heat and buzzing flies. Talk soon turns to Grupo Internet's staff and Sanchez's efforts to assemble it. Though he studied computers for five years in the Ukraine, he tries to avoid hiring those who were trained in Soviet bloc countries. “They bring an excessively theoretical side to software development,” he explains. “But in Cuba the student curriculum is similar to that of the United States: Creativity comes before theory.”
Suddenly a jarring noise interrupts. The door to an adjoining workroom doesn't seem to fit its frame properly. As employees go in and out, dragging the door shut behind them to seal in the air conditioning, the jamb moans until the entire building seems on the verge of collapse. This process repeats itself several times, but neither Sanchez nor Marshall bat an eyelash. It seems a fitting metaphor: Not fifteen feet away from where Grupo Internet crafts of-the-moment Linux programs is a door that won't even close properly; Silicon Valley this ain't. Yet Cuba's Net pioneers refuse to wait for the rest of the island to catch up to them. With a little imagination (and a few less flies) you can almost imagine Steve Jobs and Steve Wozniak sweating away in their Cupertino garage amid the bicycles and Volkswagen parts, hammering together the first Apples.
Certainly Cuba has a long way to go. According to government officials, only 33,000 of the island's 11 million people have been allowed Net connections by the government. (The actual number of Cubans online could be double that, because so many individuals share their accounts.) And Lucas Graves, senior analyst with the New York-based research firm Jupiter Communications, warns that the Net has been drastically overhyped when it comes to Latin America. His figures show all of Latin America spent only $194 million online in 1999. By way of contrast, Amazon.com racked up sales of $267.5 million alone during the same period. “You're talking about a region where only two or three percent of the people are using the Internet today,” Graves cautions. “That's going to rise to just twelve percent even by the year 2005, while in the U.S. today we're already approaching the halfway mark.”
Nonetheless Cuba has committed itself to bringing widespread Internet access to the island. At present that's still a largely theoretical concept, but the government envisions Net terminals in every neighborhood post office, similar to the growing ubiquity of free Internet availability in public libraries across the United States. To that end earlier this year the Cuban government took the step of establishing a new Ministry of Informatics and Communication dedicated to the Internet, as well as an E-Commerce Commission. Juan Fernandez Gonzalez, head of the commission, wisecracked to The Industry Standard about the acrimonious internal debate leading up to that move: “I'm a pioneer, and the definition of a pioneer is the guy lying in the middle of the road with the arrows sticking out of his back. But now we're not discussing whether the Internet is a good thing or not. The issues are: How? With what financing?”
The appeal of e-commerce for Cuba seems to revolve around many of the very factors that have created friction in the developed world. With virtually no retail infrastructure to speak of, Cuba doesn't have many traditional brick-and-mortar establishments to feel threatened by online shopping. Moreover faced with a populace hungry for consumer goods, eliminating the need for retail outlets with Internet kiosks must seem mighty appealing. Besides, hasn't Fidel always insisted on Cuba's ability to leapfrog over stages of (ahem) capitalist development?
Arnaldo Coro provides some insight into the resistance those Net boosters aligned with Fernandez encountered over the past few years. On paper Coro's résumé is impressive enough: a host of journalism professorial gigs at the University of Havana, appointments to U.S.-oriented government think tanks, and leadership of several radio news departments. He's been cited as an expert on technology issues, as well as the creator of Cuba's first rudimentary e-mail system in the early Nineties. If he were in Washington, D.C., Coro would be described as an insider with friends in high places. This being Cuba, however, identifying Coro's exact role is a bit more nebulous and, well, spookier.
Sitting inside his tidy Nuevo Vedado home, Coro elaborates with a mixture of pride and further mystery. “I'm 58,” he says with a smile. “I've trained two generations of university students, and now I'm into a third. When you teach for 30 years, your first students are now ministers and ambassadors. Many of these people in VIP positions like to come and sit there [he nods at the seat beneath Kulchur] because they know me, and they've learned many things from me that weren't in the syllabus.”
As for Cuba's leap onto the Internet, he opens with a hint of sarcasm: “We just don't have the money to provide every household with a computer and a DSL connection. But the nation does have the possibility of connecting to the wired world in the broader sense.” Although bandwidth is pitifully small (a condition Coro blames on the U.S. embargo), he says, “There's a lot of very valuable information that's already existing, so let's make it available. Whether it's been brought into the country by me getting on a plane with a set of CD-ROMs or downloaded off the Internet.”
As for the Net's dangers, Coro exhorts, “The Internet was the brainchild of the American defense industry. That arouses suspicion in even the most naive person on the planet.” From here he begins revving up. “We are not giving our enemies the slightest chance to use modern technology against us!” he cries. “Those who want to turn Cuba into another star on the U.S. flag, those who are allies of the Cuban American National Foundation and all that shit will not get an e-mail account!” Attempting to cut through the rhetoric, Kulchur asks just what in particular the Cuban government fears.
A twinkle forms in Coro's eyes and he leans in close, saying softly: “I'm going to be very open with you.” Pregnant pause. Kulchur resists the urge to look back over his shoulder. What lurks in Castro's darkest nightmares? Cuban-exile hackers? Anti-socialist chat rooms? No. It's porn sites. “The Cubans are so sex-motivated that they just don't need any more of that sort of thing,” Coro says, shaking his head. “Pornography is a terrible thing for any society. It's demoralizing, it's unethical, it's everythingthat's negative.”
So how exactly is the revolution going to protect itself against NakedMarisleysis.com? “By judiciously knowing which sites contain pornography,” he explains, “you can block them out so anything sex-related is stopped.” If there's any irony in both Fidel and the Christian Coalition sharing the same passion for Net-filtering software, it's lost on Coro. “This is an ideological struggle,” he asserts.