A New Cuban Revolution

Capitalizing on emerging capitalism.

There’s a revolution going on in Cuba. There are guerrillas walking the streets of Havana. They bear little likeness to Fidel’s cadre, though — the one that installed a Marxist dictatorship in 1959. Instead they’re free-market reformers, responding to Raúl Castro’s 2010 easing of restrictions on small business entrepreneurship. They are the island’s first capitalists in three generations, and they’re creating from scratch a uniquely Cuban approach to guerrilla marketing.

They’ve embraced the guerrilla approach — that unconventional, low-budget and ever so effective style of advertising — not because they’ve heard it’s trendy here in the States. They’re doing it because they have no other choice. Print and broadcast media in Cuba is still state controlled and doesn’t accept advertising. Internet connectivity is severely limited. The new entrepreneurs of 2010 were faced with the challenge: how to let their fellow Cubans know they were open for business.

They met that challenge with ingenuity we should all find instructive. They accepted their limited resources, their limited access to mass media, and worked around them.

There’s the restaurant owner, for instance, who takes to the streets of Havana in his garishly painted MG Roadster (displaying the restaurant’s logo, of course). Cuba’s license plates are color coded, so he keeps an eye out for the blue plates designating foreign tour groups, and leaves discount coupons on their windshields.

And there’s the mobile phone repair company (which also does a brisk business unlocking iPhones). They wanted to differentiate themselves from their hundreds of competitors, so they’ve branded themselves as a “clinic,” complete with a cartoon mascot: a cellphone wearing a stethoscope. That icon is becoming familiar throughout the island, thanks to professional signage and thousands of flyers handed out.

Perhaps most innovative is a popular Havana burger stand. They offer 25% lifetime discounts to motorists willing to carry bright yellow advertising decals on their cars. They also managed to get 30 marchers, all wearing branded t-shirts, into this year’s May Day parade (one of Cuba’s biggest public events). The result was mass-market coverage that would have been otherwise impossible.

At this early stage, Cuban marketing is still in its infancy. The same can be said for all aspects of Cuban free enterprise. But as long as they go on showing this same level of resourcefulness and resolve, their future is bright indeed.

And along the way they might have some lessons to teach the free-enterprise giant just 90 miles off their coast. Here’s hoping we’re willing to learn them.

The C4:

1. In 2010 Cuban president Raúl Castro opened the way for limited entrepreneurship throughout the island. Within months thousands of small business — restaurants, specialty stores and beauty shops — hung out their shingles. 
2. They quickly found, however, that they had no easy way of communicating with their customers. Mass media is controlled by the Cuban government and conventional advertising doesn’t exist.
3. So they embraced what we call “guerrilla marketing.” They leveraged ingenuity, meager resources and every opportunity for exposure. It worked. It’s still working.
4. It’s a fascinating, real-time experiment in creating a free-market system from the ground up. There are lessons to be learned in Cuba. Wise marketers everywhere should pay attention to this developing story.

Is Healthcare At The Crossroads?

Emerging decisions will impact you and everyone you know.

Whether you call it Obamacare or the Affordable Health Care for America Act; whether you’re a supporter or a detractor; and whether you’re an employer, an employee or even unemployed, the healthcare reform law is bound to have significant impact on your life.

Its second anniversary was Friday, March 23. And on Monday, March 26, the U.S. Supreme Court began deliberating its fate. The most contentious provision — the individual mandate that would force all Americans to buy insurance or pay a penalty — will be the Constitutional lynchpin that the high court, in all likelihood, will vote up or down.

The arguments are clearly drawn, which is surprising for such a complex law — most of which hasn’t even gone into effect yet. Does the Commerce Clause (Article 1, Section 8, Clause 3 of the U.S. Constitution) empower the federal government to require citizens to purchase specific goods or services — in this case, health insurance?

If the Court says no, it might choose to sever the individual mandate, leaving the rest of the law intact. The danger there is self-evident: the uninsured will have no incentive to purchase health insurance until they actually need it. The law’s system of affordable health-insurance exchanges, in that scenario, becomes unsustainable.

But healthcare prior to the law’s passage was likewise unsustainable, with 20% of our population without health insurance coverage of any kind. Annually, the uninsured consume more than $100 billion in healthcare services, with more than $60 billion of those costs going unpaid.

Healthcare and politics have become inextricably linked. It’s already a hot-button issue for the next election, and will only become more fraught after the Supremes hand down their decision.

So it’s all too easy to forget what’s at stake: our economy, and maybe our future viability as a society. If Obamacare isn’t the answer, then what is?

We need to know. Share your thoughts below.

The C4:

1. The Affordable Health Care for America Act was signed into law by President Obama on March 23, 2010. To date it has outlawed exclusion by insurers for pre-existing conditions and has allowed children to stay on their parents’ policies up to age 26. Its most contentious requirement, the individual mandate, is not scheduled to go into effect until 2014.
2. The Supreme Court will hear six hours of arguments on the law, which began on March 26.
3. Opponents maintain that the government has no power to force private citizens to purchase health insurance. The administration argues that since we’re all consumers of healthcare services, the Commerce Clause grants precisely that power.
4. In either case, the costs of providing healthcare to all Americans are unsustainable.