About 10 years ago, I went to Cuba. (No, I didn’t go illegally—I have dual citizenship so I used my non-American passport, which I’m pretty sure was kosher).
It was a bittersweet experience, visiting a country that was both idyllic and repressive. Now, with small signs of change in Cuba and our government finally easing up travel restrictions, the doors between the two countries are starting to open. And U.S. CEOs like Airbnb’s Brian Chesky are happy to step right in—the small island nation is now the vacation rental site’s fastest-growing market.
A very different kind of company also sees opportunity in Cuba’s crumbling buildings. Doug Oberhelman, the chief executive of construction equipment maker Caterpillar, recently made the pilgrimage to the once-forbidden country too.
“I’m 63 years old and for my entire lifetime Cuba has been a topic of discussion,” Oberhelman told me in a recent phone conversation following his trip. “We’ve said for a long time that the embargo should end.”
President Barack Obama has called on Congress to lift the decades-long embargo, and Oberhelman is convinced it will happen within the next year or two. In the meantime, he’s already inked a deal with a distribution partner, Rimco, headquartered in nearby Puerto Rico, to sell to Cuba once trade restrictions are over.
“It’s not a China nor an India, obviously,” Oberhelman said. “But it’s an opportunity for virtually every product this company makes. They just need so much infrastructure and it’s going to happen, with or without the Americans.”
When I was in Cuba, I was struck by the crumbling architecture and the broken-down classic American cars. But I was even more taken by how scrappy and resourceful and, well, innately capitalist the people were. Everywhere you turned someone was running an “underground” business behind the watchful eye of their government. There was the guy with the fishing pole and bucket who gave us a tour of the old town (we had to pay him in secrecy), and the unsanctioned restaurants run in private homes.Who knows what the opportunities in Cuba hold for tech companies, construction equipment manufacturers, and any other industry, or how far the country’s own government will go toward normalizing relations and—gasp—being more friendly to business. (It should go without saying that I don’t see all iterations of democracy and capitalism as a force for good.)
It’s hard to believe that next time I go, I can stay in an Airbnb in Havana. And, just maybe, see Caterpillar-made machinery in action. As Oberhelman told me, there are plenty of roads that need to be paved in Cuba.
BITS AND BYTES
Open source software community breathes sigh of relief. A San Francisco jury found that Google used Java, the open source software programming language, fairly when it embedded pieces of the code into its Android mobile operating system. Oracle sued to collect potentially billions of dollars in licensing fees. It has already signaled its plan to appeal the verdict. (Fortune, Fortune, New York Times)
Intel Capital restructures, but won’t sell big chunk of portfolio. After an extensive review, the chipmaker’s venture capital division isn’t planning major changes to its portfolio, according to a blog post by group head Wendell Brooks. Reports earlier this year suggested it might sell its interest in up to one-quarter of the companies—a position valued at $1 billion—to reflect Intel’s changing strategic focus. (Fortune)
Twilio files IPO papers, ending drought. It looks like the software company, which specializes in application programming interfaces for communications applications, will be the first tech startup valued at more than $1 billion to go public this year. One of Twilio’s most significant customers is messaging service WhatsApp, which represented 17% of its revenue last year. (Fortune, Fortune)
Gawker’s founder hits back against Peter Thiel. In an open letter, Nick Denton criticized the billionaire venture capitalist for funding lawsuits against his media company, including Hulk Hogan’s successful $140 million privacy complaint. Thiel’s involvement was revealed earlier this week, and he has described his motivations as “philanthropic.” In a related development, it looks like Gawker Media is for sale. (Fortune)
Microsoft, Facebook team up on transatlantic cable. Construction on the new “MAREA” cable will begin this August and continue through October 2017. It’s meant to speed up cloud services between the two continents. Google has invested in a similar project, linking the United States to Japan. (Reuters)
Twitter loses two more top executives. Nathan Hubbard, who led commerce and media strategy, and Jana Messerschmidt, head of business development, plan to leave the microblogging service. Their roles will be consolidated under Ali Jafari, the company’s vice president of revenue partnerships, according to tweets posted by Twitter COO Adam Bain. (Fortune)
Why U.S. tech giants are flocking to Africa. Not so long ago, Big Business saw Africa as a charity case. Now the likes of Alphabet, Facebook, IBM, and Microsoft have stepped up business operations there. They see opportunity for huge digital audience acquisition—more than 1 billion, mobile-first potential Internet users. (Fortune)
Intel wants to help cars see better. It is paying an undisclosed sum to buy Itseez, a specialist in machine vision technologies and driver assistance systems that help vehicles avoid collisions. (Fortune)
Nest CEO Tony Fadell’s “other” venture. The world-famous designer, who was behind some of the earliest iPhones, is the quiet co-founder of Actev Motors, a startup making a splash with the Arrow Smart-Kart. The $600 electric go-kart can be controlled with a mobile app and is intended for children from 5 to 9 years old.(Fortune)
Why Snapchat might be worth $20 billion. Someone has to be the poster child for the “tech stocks are a bubble that’s about to pop!” crowd, and Snapchat seems to be the one carrying that particular flag for a lot of people. That position was only reinforced with the news Thursday that the video-sharing social network has raised $1.8 billion in a funding round that values it at about $20 billion.
Calculating a company’s valuation is about a lot more than just plain mathematics, however, argues Fortune senior writer Mathew Ingram. One thing that matters more than almost anything else is the growth curve a company is on. If it’s a social app, which relies on network effects, then it’s all about active users and engaged time and the growth of those things, and only tangentially about revenue. Or rather, many investors are happy with revenue being an estimate.
That’s why there is such a huge difference between the theoretical valuation of Snapchat and the valuation of Twitter, which has about the same number of daily active users—100 million—but is only worth about $10 billion. Snapchat’s user base grew by more than 50% last year, according to its pitch deck, while Twitter grew by such a small amount it’s barely worth mentioning. (Fortune)
IN CASE YOU MISSED IT
Little-known rule could force startups to divulge financial information
by Jeremy Quittner
Why you should never expect Alphabet to break itself up by Lucinda Shen
Earlier backer of Yammer, Slack, and Box funds ‘team email’ startup
by Heather Clancy
A third of GibHub employees are female—but just 2% are black
by Michal Lev-Ram
Soon PayPal’s mobile app will only be available on Android and iOS
by Benjamin Snyder
Dell backs startup to attack Chinese cloud market by Barb Darrow
iPhone maker Foxconn replaces 60,000 human workers with robots
by Benjamin Snyder
ONE MORE THING
Government study links cellphone radiation with cancer (in rats). Exposure to radiofrequency radiation, such as the type emitted by devices using GSM and CDMA wireless connections, was linked to low incidences of brain and heart tumors. The National Toxicology Program will release the complete findings in two forthcoming reports. (Fortune)
MARK YOUR CALENDAR
Cloud Identity Summit: The world’s leading identity industry event. (June 6-9; New Orleans)
Bullhorn Engage: New models for business-to-business relationships. (June 8-10; Boston)
Apple Worldwide Developer Conference: The Apple developer ecosystem. (June 13-17; San Francisco)
Information Builders Summit: Business intelligence and analytics trends. (June 13-17; Reno, Nev.)
Red Hat Summit: The premier open source technology event. (June 27-30; San Francisco)
MongoDB World: For giant ideas. (June 28-29; New York)
NewVoiceMedia Connect: Rethink sales and service. (June 30; San Francisco)
Inforum: Infor’s annual user conference. (July 10-13; New York)
Fortune Brainstorm Tech: The world’s top tech and media thinkers, operators, entrepreneurs, innovators, and influencers. (July 11-13; Aspen, Colo.)
Sage Summit: For fast-growth businesses. (July 25-28; Chicago)
Oracle OpenWorld: The future of the cloud is now. (Sept. 18-22; San Francisco)
Gigaom Change: 7 transformational technologies. (Sept. 21-23; Austin)
Workday Rising: Talent management in the cloud. (Sept. 26-29; Chicago)
Microsoft Ignite: Product road maps and innovation. (Sept. 26-30; Atlanta)
Dreamforce: The Salesforce ecosystem gathers. (Oct. 4-7; San Francisco)
Grace Hopper Celebration of Women in Computing: The world’s largest gathering of women technologists. (Oct. 19-21; Houston)
TBM Conference: Manage the business of IT. (Nov. 7-10; San Diego)
Drone World Expo: Commercial apps for unmanned aircraft. (Nov. 15-16; San Jose, Calif.)
AWS re:Invent: Amazon’s annual cloud conference. (Nov. 28-Dec. 2; Las Vegas)