Puerto Rico Tech Companies Start the Work of Rebuilding
The island’s fast-growth tech companies, despite their disaster plans, were laid low by Hurricane Maria. The cloud and offshore customers will be important to their future success.
PHOTO CREDIT: Getty Images
Henry Gordillo was ready to face down any disaster that came his way. A year before Hurricanes Maria and Irma struck Puerto Rico, Gordillo had relocated InTech, his $10 million IT services company, to a bunker-like building 10 miles from the center of San Juan. There he would have access to electricity, water, and three Internet connections--two fiber and one wireless. To be extra safe, the day before Maria pummeled the island he had asked a major customer for permission to move many of his 51 employees to its site on the off-chance that everything failed.
"They said, 'No problem.' But we didn't figure out the details," says Gordillo. "We were going to work that out after the hurricane."
Much attention has been paid to the small local and tourist-facing businesses laid low by recent hurricanes. But even the high-tech, fast-growth companies in Puerto Rico were walloped, at least briefly, by the one-two punch of Irma and, especially, Maria. Because they can serve global markets, these are the kinds of businesses the island relies on to bring in money and create jobs. In addition, companies like InTech are helping local firms shift to the cloud, which should make them more resilient.
Like for so many others in Puerto Rico, Maria wiped out everything for InTech. Despite its planning, the company had no cellular. No broadband. No communications of any kind. Gordillo couldn't reach his customer to iron out arrangements. Even if he could, he would not have been able to alert employees, some of whom communicated by coming into the office and writing messages for one another on a piece of cardboard set out for that purpose. "It was like the Stone Age," says Gordillo, who three days later was able to use sporadically working email to get the client sites set up.
Wovenware, a $4 million artificial intelligence and development firm in the gentrifying San Juan neighborhood of Santurce, had been enjoying its best year ever when Maria struck. It had made the Inc. 5000 list of America's fastest-growing private U.S. companies in both 2017 and 2014. Like Gordillo, Wovenware's founders had prepared for such a crisis. Three years earlier, Carlos Melendez and Christian Gonzalez had begun pestering the landlord of their 1920s building to buy a backup generator. "I told him that we are running a global company from his building, so he needs to do it or we are going to move," says Melendez. Melendez also arranged for a second Internet provider "and we want to get a third," he says. "Because without the Internet, we can't do anything."
Maria took out both generators, but the company was among the few that still had Internet. Facing a long wait for repairs, the founders arranged to move 23 of their 90 employees to the sites of three large customers: a bank, an insurance company, and a telecom.
Wovenware, whose business is 60 percent international, also reached out to customers on the U.S. mainland. Sixteen employees flew to customer sites in Washington, D.C., and Portland, Oregon, where they will work and live for four weeks. Because Puerto Rico is a U.S. territory, travel time was short, and no visas were required--an advantage the business regularly pitches to potential mainland customers. A friend of the founders "offered to move the whole company to Calgary," says Melendez. "He said, 'I have office space for 70 people.' But we thought that was too much."
Melendez also contacted every customer, individually, before the storms to warn them what to expect. Since Maria passed he has continued to reach out every day, "letting them know what we are doing, how we are operating, how their projects are moving ahead," he says.
InTech's customers are 90 percent domestic, something Gordillo is working to change, largely because of Puerto Rico's dismal economy. Meanwhile, he is offering a new service for island customers without power: InTech will move their servers, even damaged ones, to a secure data center and get them back up and running. "If I have to get a truck and traverse roads, many of them closed, to pick up their assets, that's what we'll do," says Gordillo.
How the long road to recovery will affect growth companies' fortunes is unknown. Melendez is in the vanguard of local business leaders urging Puerto Rican entrepreneurs to aggressively pursue offshore markets as a buffer against economic as well as natural travails. "Acquiring customers outside the island will help get the economy back up," he says. "It is critical for us to recuperate from this."
Gordillo sees opportunities for engineering, construction, and IT businesses like his own as they erect a much-improved Puerto Rico above the rubble. "As Puerto Rico rebuilds we will leapfrog to the newest technologies," he says. But everything depends on the money from FEMA, insurance companies, private donations and other sources coming in and reaching the right recipients.
Gordillo anticipates that some companies will fail because they'll run out of cash. "Right now anybody from Puerto Rico, by default, is not going to get a loan," he says. "The market was already depressed, and then these hurricanes made it worse." InTech has some big end-of-year projects on its books: Gordillo worries that some customers will cancel or postpone them. "Or they could say, 'Since this is all destroyed, let's not wait until November. Let's do that big thing now before it becomes even worse,'" says Gordillo. "We don't know whether this is going to be good, bad, or neutral for us."
One thing Gordillo is sure of, though. Anticipating future disasters, "we need a plan C," he says. "I am going to get some satellite phones."