In the weeks following Hurricane Maria, Gino Villarini got very popular very fast.
Villarini is founder and president of AeroNet, an $11 million internet service provider based in Guaynabo, Puerto Rico. Maria ravaged the island's telecom infrastructure. "The day after, 95 percent of our network was down," Villarini says. But AeroNet's service uses wireless microwave technology, as well as fiber. So while competitors waited for the power companies to restore poles, Villarini's customers bounced back quickly.
Non-customers noticed. "Our sales staff was overwhelmed by the amount of requests that came in by phone, by email, and by social media," Villarini says. "Our office is not designed to receive more than 10 customers at a time, and some days we had 100 people here waiting to sign up." The company grew its customer base and gross billing by more than 20 percent in two months.
As of June, roughly 10,000 small and midsize businesses in Puerto Rico remained closed, according to Google, whose philanthropic arm raised funds for recovery. Still, now one year after Hurricane Maria wreaked $90 billion worth of damage on the island, some growth companies are thriving. They have seized market share by recovering faster than competitors and offering new products to business customers anxious to limit their vulnerability in case there's a next time.
These companies still face significant challenges, including a depleted workforce and insurance companies slow to pay claims. Many are investing more in their own preparedness plans and seeking new business outside the island.
"The companies that survived are doing better than before. They have gotten stronger," says Angel L. Perez, vice president at Rock Solid Technologies, a San Juan-based software R&D company that grew 40 percent in the past year. "Now things are getting back to normal. Or the new normal."
Sales are up.
Exports are one reason some Puerto Rican businesses are growing. While companies relying on local customers and the tourist trade still struggle, those that can serve customers elsewhere are making a greater effort to do so. Rock Solid Technologies' business was 65 percent domestic prior to Maria; that is down to around 50 percent, and the company just landed its first big account in Canada. "Putting more diversity into your customer base is a really good strategy to deal with hurricanes," Perez says.
Others see opportunities to help the domestic market protect against another catastrophe. Redundancy and backup are the new watchwords. AeroNet has two new products for small business: high-speed internet backup and a pair of independent dedicated connections. "We found during the hurricane that companies had two providers, but those providers were using the same pole," Villarini says. "So if one came down both connections came down."
For some companies, reconstruction is a boon. Initially, business from the mainland declined for Surety One, a $4 million bond underwriter based in San Juan. But now the company is writing bonds for government contractors involved in the rebuilding. "It has tripled the amount of business in Puerto Rico," says founder Constantin Poindexter.
"It has been a challenging year, but also it has been an amazing year," says Christian Gonzalez, whose San Juan-based company Wovenware is up about 15 percent over its 2017 revenue of $5 million. Gonzalez attributes that growth to demand for Wovenware's specialized expertise in artificial intelligence and machine learning. Much of the company's work is for the Department of Defense, in Washington. But it recently signed on with the Puerto Rico Science, Technology, and Research Trust to provide image recognition for mosquitos that might spread diseases like the Zika virus and dengue fever.
Four or five mainland companies--a historically large number--have visited Puerto Rico in the past few months to check out Wovenware's facilities prior to signing contracts. Aware of the room's elephant, the company has added a disaster-recovery component to its prospective client presentation. "We bring it up proactively: How we managed during the hurricane and what we are doing to make sure that they don't have any service interruptions," Gonzalez says. Customers, he says, "look happy."
Workers are scarce.
More business means more staff; and here companies are hurting. Nearly 400,000 Puerto Ricans--roughly 6 percent of the population--moved to the mainland between October 2017 and February 2018, on top of the larger exodus over the preceding decade. Rock Solid distributed $1,000 "resiliency bonuses" for "toughing it out with us," he says. "We have 100 people, and we lost just two."
Perez has hired 20 people over the last year, but had to wait for five students who were scheduled to graduate from the University of Puerto Rico last December. Normally Rock Solid makes offers at the school's job fair in October. That was canceled, and then classes extended into February as the university recovered from extensive damage. "It delayed our whole getting-up-to-speed process. But there was nothing we could do," Perez says.
At Onuvo, a $1.8 million managed services provider, business has been "growing like crazy for the last nine months," says managing member Juan L. Collado. Collado wants to hire but finds himself in hot competition for the island's reduced workforce. "Everyone is fighting for the few available resources we still have," he says.
In January the government raised the minimum wage for employees working on government construction contracts to $15 an hour. Collado predicts service industries will be next. The ripple effect worries him. "People will move to the government for more income," he says. "In five or six months I'm going to have to increase wages for entry-level employees."
Ready for next time.
"We prepared for the normal kind of hurricane," Perez says. "This hurricane was not normal." Newly woke to the threat of devastation, companies have invested significant time and money to reinforce their disaster preparedness plans. At Rock Solid Technologies, for example, Perez spent several hundred thousand dollars on power and communications redundancy. And he has arranged to fly people to the company's Austin office "as a precautionary tactic" if a hurricane of similar magnitude threatens.
AeroNet expects employees will stay put, and the company will care for them when they do. To ensure basic needs are met during an emergency, it has established relationships with hotels, gas stations, fast-food restaurants, and cafeterias. Putting little faith in the power company, which was ailing even before the hurricane, Villarini has migrated much of the facility to solar.
Villarini is also working with vendors to weatherproof equipment that got damaged by Maria. "A lot of equipment is designed for the outdoors--for rain," he says. "But during a hurricane the water comes in from all sides and places. It even comes in upside down."
Wovenware is improving protocols for keeping management and staff in touch if everything goes down. "How do we find out if they are OK? At the beginning of the hurricane it was one of our more pressing issues," Gonzalez says. At least one radio station managed to broadcast during and immediately after the storm, and some newspapers continued to operate. Gonzalez says he may buy ad space or airtime to reach out to employees, explaining the process in advance so they know where to look or listen.
Wovenware will also move to a new building by year's end. The company's current landlord had two generators, but when one failed during the hurricane the second couldn't handle the additional load. Its new location has three generators, Gonzalez says--"so there is a contingency to the contingency."
Dark days linger.
While some business leaders wax optimistic on the anniversary of Maria, all acknowledge the island's ongoing woes. Some people have come back but more have stayed away. FEMA is providing less financial assistance. Insurance payouts have been slow, say several CEOs, dinging cash flow and slowing progress. "Just in order to reopen we have to pay someone $50,000, $60,000, $70,000 for cleaning up the area or changing windows or rebuilding the office," says Onuvo's Collado, speaking of his own experiences and those of customers. "If we have to pay out-of-pocket for those repairs it delays how fast we can recover."
That's on top of Puerto Rico's dismal economic environment, which predates the hurricane. Maria "was in some ways the straw that broke the camel's back," says Poindexter, who cites the economy, crime, and lack of opportunities for young people as reasons for moving his family and part of his staff off the island. After the hurricane five members of Surety One's eight-person team relocated to an office in Raleigh, North Carolina, where Poindexter has another home. His wife and children moved there, too, while other relatives settled in Florida. Poindexter travels among the three locations. "It sucks, but there are direct flights between all the places I need to go," he says.
Surety One does business throughout the mainland and in other parts of the Caribbean. So why doesn't Poindexter just pull up stakes and leave? He talks about the high demand for underwriting by the contractors who are busy all over the island. The company is also enjoying a new market among virtual currency startups relocating to Puerto Rico for the favorable tax treatment.
Then there more elusive prospects. Could Puerto Rico, with its vulnerable power grid, serve as a test bed for renewable energy projects? There are conversations, he says, about attracting Elon Musk.
Fundamentally, though, Poindexter's unwillingness to abandon Puerto Rico is not related to his business. "It is just very hard to break from a home that you love and a culture that you love and the food that you love," he says. "And who does not want to live on a tropical island?"