Wednesday, July 27, 2016

Our Middleman in Havana

Our Middleman in Havana
July 27, 2016

Everyone on the commuter ferry to the tiny coastal village
of Gezaulole in Tanzania recognized Michael Laverty. Not only was he one
of a few foreigners living in the rural settlement, but Laverty's
thrill-seeking demeanor had caught people's attention too. He had taught
himself to ride a motorbike on the streets in full view of the
community. "I was probably the only person in Tanzania with a Japanese
motorcycle," he says.

Laverty, a die-hard adventurer, has spent close to a decade launching
and managing businesses at the farthest edges of the investment
universe. In Dar es Salaam, Laverty designed a research study to help
antimalarial medicines reach the country's outermost villages. And in
the midst of a civil war in the South Sudanese capital, Juba, he ran a
logistics business and oversaw a downstream petroleum company with $5
million a week in turnover. His next challenge: fraught, difficult Cuba.

This island nation, which for more than 50 years has been separated from
the U.S. by just a 90-minute flight (and 90 miles of ocean), now holds
the promise of opportunity in the globalized economy. Laverty, 34, has
become an intermediary, sought after by the increasing number of
Americans — investors, companies, politicians, even Hollywood stars —
who are licking their chops, and not over rice and beans. He founded
Havana Strategies with his brother, Collin, 33, last year, a company
that acts as middleman for U.S. companies that want to move in on the
Cuban market.

Though Cuba remains lined with 1950s cars, it's also seen an explosion
of private enterprises since Obama and Castro kissed and made up.
They organize fact-finding missions and meetings with Cuban officials,
help companies get government approval and brainstorm media strategy.
Laverty's advised at least 15 different companies, half of them Fortune
500 firms, across the hospitality, aviation, technology and logistics
industries. When Netflix held its company retreat and meeting
(seriously) in Havana this April, all 285 employees were in the
Lavertys' hands. When Airbnb headed in, they called Havana Strategies;
same with Facebook. (Neither Netflix nor Facebook wanted to comment;
an Airbnb spokeswoman said the company's faced no major issues in
setting up shop there.) The brothers, led by Collin at his sister
business, were responsible for a concert headlined by electronic music
king Diplo.

Though Cuba remains lined with 1950s cars and its majority works for the
state, living on ration books, it's also seen an explosion of private
enterprises since December 17, the day President Barack Obama and his
Cuban counterpart, Raúl Castro, kissed and made up. Or at least
approached frenemy status. The excitement of the brave new world
reminds Laverty of the same thrill in South Sudan, post independence. He
recalls his global business history with a tinge of cheekiness.

Still, huge barriers remain in Laverty's mission, like a wide-ranging
economic and political embargo that's prevented most U.S. companies from
doing business. Despite the excitement, American investment remains
essentially notional — it was only in 2014 that the Department of
Commerce approved $4.3 billion worth of business transactions; before
that, details rarely saw the sun. Naturally, Laverty is careful to hedge
his bets, saying he won't overpromise. The long timeline — two to five
years to set up manufacturing, for instance — is a deterrent for some
companies, who simply "move on," he says.

But Havana Strategies is overwhelmed with requests anyway, he says. The
Denver-born Fordham alumnus and MIT Zaragoza graduate landed here thanks
to a snap decision when his brother, a Cuba expert who's run the
successful Cuba Educational Travel company since 2012, said he needed
help managing an onslaught of new clients seeking to enter the island's
market. "I had just got back from Africa, and I was tired and
frustrated," Laverty says. But the fraternal call beckoned; he booked a
flight the next day. Don't let the sprightly decisions cause you to call
him an amateur. "It's not his first time to the rodeo," says Augusto
Maxwell, the director of Akerman, a law firm in Cuba that, he says,
helped Laverty with the Airbnb deal. Maxwell says Laverty's experience
in other developing nations shows.

A son of former "ski bums in Colorado," Laverty began his career
adventure working for MIT Zaragoza's international logistics program,
focusing on malaria in Tanzania, where he crossed paths with his future
wife, 33-year-old Megumi Gordon, then deputy director of the malaria
control team at the Clinton Health Access Initiative. So began a love
affair between a development-sector power couple. Their marriage caused
him to settle down, and in the two years since, he's briefly muffled his
wanderlust. But one wonders what his itchy feet really look like since
he travels back and forth from San Francisco to Havana every month. He's
made about 30 trips so far.

But now comes the hard work. Laverty says several companies are still
waiting for approval from the government … and fully normalizing
economic relations with Cuba will fall to the next U.S. president. Cue
the Trump drumroll. Even then, it will take several additional rounds of
negotiations before fully lifting the embargo is a possibility. "You've
got kind of a Cuba bubble right now," says Andrew Otazo, the executive
director at Washington D.C.-based Cuba Study Group. "There's an
exuberance." But American-Cuban relations remain tense. (Representatives
from both the American and Cuban government declined comment.)

Laverty's ever the optimist. "We're lucky to be doing stuff in a place
that is so sexy and sought after right now," he says. He points to the
breadth of people drooling over the island as proof, from Diplo to the
White House.

Source: Our Middleman in Havana -

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