Ross Mayfield's Weblog

My Dinner with Andrus

Friday night I had dinner with the Prime Minister of Estonia, Andrus Ansnip.  He was in town to open a "tech embassy" in San Jose, part of Enterprise Estonia.  While most of the world knows Estonia for Skype, there is a little more to it, as I've blogged before.

• 57% of the 1.3M population use the internet, and a Tiger's Leap program provided internet access to all schools
• The IT sector has developed particular core competencies in identity, security, mobility, p2p, voip, ebanking, egovernment, egambling, ecommerce.
• Web based services by the government as well as the private sector for doing business in Estonia are widespread with 98 percent of banking transactions made electronically.
• More than 80 percent of income tax filings by individual citizens of Estonia were filed electronically in 2006 and 65 percent of the population uses chip-based ID cards (this may be 80% now, see below)
• In 2005 they became the first to have legally binding internet voting
• Bay Area Estonian connections include: Draper Fisher Jurvetson (DFJ), a Silicon Valley based VC, and one of the first investors into Skype. BlueRun Ventures (VC) with investment into FusionOne (development team in Estonia). Egeen International - a biotech company in Mountain View that has been involved in Estonian Genome Project.
• They are the first to withstand a cyberwar

The setting of the dinner was too noisy for real conversation, which is unfortunate because these are such interesting times.  Wage growth and inflation are a concern and Eurozone entry is at risk.  Lacking monetary controls as stimulus, and maintaining a tight fiscal policy, GDP has slowed.  Even the fundamentals of the housing growth are changing with the credit markets. 

As I suggested to the last Prime Minister and the last President, a significant opportunity exists in relaxing immigration controls, particularly for technology skilled workers.  This is politically difficult given that 25% of the population are Russians who came as occupiers, and policies aimed at protecting Estonia's language and culture.  If it was as attractive and welcoming to work there as it is to invest there (no capital gains tax, etc.), it could be a significant form of economic stimulus.  And with the IT sector actually being small, with Skype, Playtech and banks employing most of them, it is critical to attract more employees for future growth.  A H-1B visa program, without limiting quotas, to fast track technology and research immigrants could be one solution.

Before dinner I of course Twittered for questions, and got lots of fun ones:

• trishussey   @Ross Would he give addresses as podcasts?   07:14 PM November 29, 2007
• factoryjoe   @ross Ask him how the OpenID tied to identity cards is working out!   07:20 PM November 29, 2007
• rainer   @Ross: on which websites does @AndrusAnsip use his OpenId?   04:15 AM November 30, 2007
• briancaldwell   @Ross "How has your country recovered from and protected against future cyber warfare attacks?"   07:30 PM November 29, 2007
• geraldb28   @ross The obvious... update on cyberattacks would be interesting.   09:14 PM November 29, 2007
• Pistachio   @ross ask him to seesmic with you?   10:12 PM November 29, 2007
• ramsey   @Ross: "Mr. Prime Minister, does that make you a holy man? Being a minister and all?" 10:28 PM November 29, 2007
• jstorerj   @ross you could ask if he supports the Estonian start-up that's building social networks for dogs & cats (http://tinyurl.com/28meos). ;-)   11:15 PM November 29, 2007 (editor: no, he probably supports Dogster)

There is a sample bias here, but Chris Messina's question led me to an interesting thought, because there are over 1 million smart card-based OpenIDs in Estonia:

• Every Estonian eID holder (around 80% of Estonian population) has an unique OpenID with the format open.id.ee/[firstname].[lastname](.number) Example: open.id.ee/martin.paljak
• No registration, no passwords, hardware tokens only - most secure OpenID provider to date where no phishing is possible (using traditional smart cards and soon GSM SIM cards over GSM network)
• Your online identity can never be stolen because your OpenID is attached to your real identity. You can always replace your stolen eID card and reclaim your online identity.
• All OpenID enabled sites across the world instantly benefit from the security provided by eID-s without the knowledge of eID-s even existing!

Estonia has long promoted the investment opportunity of using Estonia as a small test market for new products.  I believe there is a real opportunity as a test market for new identity services.  The infrastructure and consumer preferences of the future are in place there today.

So here's a dangerous question.  What further step could the legislature take to foster development of forward looking identity services?  At Defrag, Esther Dyson suggested the need for personalized disclosure messages from marketeers.  Having an e-commerce site disclose in human readable terms what they know about you and why they are recommending an item is an ideal identity driven service. While powerful in concept, and would lead to new innovative solutions, it would be difficult to gain adoption from buyers.  Although she presented the idea to the FTC, she hoped it wouldn't have to be regulated. 

But perhaps it should, and at least consider the concept of regulating disclosures as an example, because security and privacy policy could provide a creative constraint to foster the innovation of identity services.  Identity is inherently within the political domain.  Developing forward looking policies may begin with a simple declaration of who should own your identity (you).  And for every right granted in Estonia, you may find a new identity service developed locally that serves a desired, ethical and modern form of human right, globally.

Image credit: BBC, picture of Linnar Viik's card

Denial Mobs & The Cyberwar on Estonia

The latest thread of the Cyberwar attack against Estonia, as covered in the NY Times, an interview in Cnet with an expert from Arbor Networks and a post Kim Cameron raise an interesting question.  It is unlikely that the Russian government can be directly linked to the massive coordinated and sophisticated denial of service attack on Estonia. It is also possible that such attack could self-organize with the right conditions.  Is a large part of our future dealing with hacktavists as denial mobs?

Given the right conditions that make a central resource a target, a decentralized attack could be decentralized in its coordination as well.  Estonia may be the first nation state to be attacked at the scale of war, but it isn't just nations at threat.  The largest bank in Estonia, in one of the top markets for e-banking, has losses in excess of $1M.  Small amount relatively, but the overall economic cost is far from known.

If a multinational corporation did something to spark widespread outrage, such an attack could emerge against it as a net-dependent institution.  Then we would be asking ourselves if the attack was economic warfare from a nation or terrorist organization.  But it also could be a lesser, and illegal, form of grassroots activism.  None of this is particularly new, but less in concept.

But what is new are tools, that cut both ways, for easy group forming and conversation. 

Cyber-war on Estonia

I noted last month the cyber-war against Estonian government sites.  As expected, it got worse running up to the symbolic day of the May 9th.  At this point, the mainstream media is carrying the story, and recognizing this is an unprecedented attack on a sovereign nation.

From the Washington Post:

"The nature of the latest attacks is very different," said Linnar Viik, a government IT consultant, "and it's no longer a bunch of zombie computers, but things you can't buy from the black market," he said. "This is something that will be very deeply analyzed, because it's a new level of risk. In the 21st century, the understanding of a state is no longer only its territory and its airspace, but it's also its electronic infrastructure."

"This is not some virtual world," Viik added. "This is part of our independence. And these attacks were an attempt to take one country back to the cave, back to the Stone Age."

NY Times:

“We can’t say we have seen the biggest attack yet,” he [Hillar Aarelaid] said, “because each wave is bigger than the one before.”

Monumental Symbolism

An old Baltic joke that helps explain the differences of peoples is how each country got rid of their Lenin statue upon independence.  Lithuania gathered en mass and beat it to a pulp.  Latvia formed a committee and after much machination  dismantled it.  Estonia called a Finnish crane company on a mobile phone and had it hauled away quickly.

Now we are back to the same old story, but with Russian minority riots and great bear posturing.  The Estonian government decided to relocate the Bronze Soldier memorial, to Soviet soldiers who died fighting the Nazis at a time when Estonia was independent, from outside the national library in downtown Tallinn.  The international press is all over it, friends and colleagues are a little scared, and Pravda has their version of the news.

Practically, this was a nationalist fuck-up.  It didn't have to happen right before a Soviet holiday (yes, they still celebrate those, great way to tease out former soldiers and zealots living on the poverty line), and Russia has no problems causing a stink about it and calling Estonians Nazi zealots.  The Estonian government's reaction has been to tighten local security and stop selling booze after 2pm.  Hopefully both sides will sober up before this escalates.

UPDATE: Wikipedia and YouTube:

Learning Conversational Estonian

A reader wrote to me a question another reader might be better prepared to answer:

I'm currently trying to learn Estonian, but finding it difficult to find
material.What little I can find in English tends more towards the
"conversational" style of learning, whereas I much prefer the more old
fashioned grammar-based approach, where you actually learn off
declensions etc. Do you know of anything like this?

Please respond in comments...

Hot Tech, Cold Country

Really nice article in the NY Times today about tech startups in Estonia. 

Quotes all my friends and colleagues.  Rightly centers on the key question of how to be more than a flash in the pan.  My guess is yes, with a second billion dollar IPO lined up after Skype, if they encougage more skilled immigration.  Here's more on Estonia if you are interested.

UPDATE: Hey Estonians, you currently have a poor rating here.

Postcast from Estonia

Peeter Marvet podcasted my talk at the Visions to Solutions conference in Estonia earlier this month. The audio quality is pretty darn good, possibly because it was held in a concert hall. The talk covers the basics of wikis and social software, contrasts personal computing and social computing and dives deep into a couple of enterprise wiki case studies.

Estonian IPO

Come November there could be a $1 billion IPO of an Estonian company, Playtech.  Similar to Skype, they are a global tech company with development based in Estonia.  Playtech is an internet gambling service provider, so there will be less to celebrate than last week.  But it is another validation of the international startup model.

According to unofficial information the key owners of the Cyprus-registered holding are 2 Israelis and 1 Estonian.  Maybe the 200 developers in Tartu (second largest city in Estonia, a college town) get to visit the casinos in the Carribean for winter break.

Vigilant Tolerance

A lot of people would prefer that I blog about tech issues that I matter to them, or categorize for what they really need. Sorry, skip this post. It's a thing that matters when you go beyond the techno-utopian threads of the Valley, or go beyond being a tourist in the rest of the world.

The other night we were walking through the most public place in beautiful Old Town Tallinn, Estonia, and something reminded me how ugly this place can be. Some guy, presumably for his bachelor party, was dressed up as black man, face painted and wearing an afro wig. One of his friends was having him giving him a shoe shine.

I don't have pictures, for fear of smacking the ignorant son-of-a-bitch with my cell phone. Instead, I gave him the word. Many of the words were not nice, and the main one was racist. At risk, I freaked them out.

A friend of mine once told me that when she saw her first black man in Estonia, she thought he was made of chocolate. The problem is pure ignorance, not a superiority complex or more pure intolerance that you find in other countries.

Maybe my problem is that I come from the most vigilantly tolerant of cultures, that of the Bay Area (yes, America is actually made up of many regional and distinct cultures, you can't blame us all for Bush). It's not my problem, but I make it my own, because it really is. To be sure, this place is changing and it is more diverse than ever. In fact, it isn't even a racist culture, but it needs to change from where they are on the scale, damn quick. Ignorance is solvable.

Estonia has had a real issue with occupational Russian minority (30%, the rational-at-a-time source of legal barriers for inclusion), but it seems to easily forget that with the fall of the wall it sought inclusion from the rest of the world for more than security. Now their economic freedom is at risk, not just for the need of immigration reform, but cultural tolerance. Accession should be an uplifting process. The EU will see to that, as immigrants will come from all stripes. So be ready, little country, because you can.

UPDATE: Please read this thoughtful comment by Kalju Rüütli.  Taken together, this conversation provides a more complete picture of the issue.  Americans would also do well to consider his comments on our Administration.

Visioonist

I'm in Parnu, the third largest city in Estonia, really a beach town on the southern coast. If you ever visit during the summer, definitely rent a car and drive here and to the islands. The real Estonia is outside Tallinn.

Just gave my talk to the Visions to Solutions IT conference. Mostly did the wiki thing, showed off a couple of tools to explain tagging, talked about open source and made an argument for more liberal immigration policies to fuel growth of the sector. As was expected, I couldn't tease out questions after the talk.

Estonia's leading blogger, Siim Teller, spoke in Estonian about blogspace and the opportunities for adoption.

Ulo Parts from the Nokia technology platforms division had some good insight into their innovation process with talk meant for the engineering mind. "All inventions are not innovations, all innovations do not include inventions. 90% evolution, 10% disruptive is a good rule of thumb." He dove deep into how multidisciplinary and complex it is to put together a handset, complete with formulae and block diagrams. Main mathematical task is to find well performing receivers with optimized performance. Their implementation platform needs to be flexible to enable multiple radios. They look to cooperate in R&D with openness, focus research on radical innovations (which should be the focus of small technology companies, so they look to partner with them) and need efficient implementation.

Spoke with several people who were using wikis inside their companies. There is a natural adoption of open source here because Linux was invented next door, technical skills and budgetary constraints.

Beyond Borders in Estonia

I have to say that every time I visit Estonia during good weather, there are tempting thoughts of moving back here.  So far we have had a not-so-quiet weekend with friends and family.  Funny how the longer you know someone, the less they seem to change.

On my flight I met an entrepreneur who has lived here the past three years and is doing an executive MBA program in London on the weekends.  After being a CTO at a corporate IM startup and looking to start his own company (highly specialized psych research ASP), he picked Estonia for both the business friendly climate, easy visa, cost and lifestyle.

The economy here is booming, with double-diget growth over the past quarter alone.  Prices are about 30% less than the US, driven by wage growth following the EU accession.  There is a big gap between rich and poor and it's hard to discern the middle-class.  Since accession, many Estonians work abroad in the EU and tourism has exploded in both directions.

An Estonian friend who did quite well as a real estate entrepreneur over the past ten years told me he would love to invest in the US, but the Bush administration has made it too difficult to get a visa.  Instead he is starting developments in France. 

It should be noted that Estonian immigration policy isn't any better.  I have an Indian friend who wants to live here and could have a significant impact on the high tech industry, but he can't get a visa.  The biggest problem facing Estonian entreprepeurs is sourcing good human capital.  The fact is, this economy is near a peak (reminds me of 1996) and has structural weaknesses that are not being fully addressed.

Me, I'm just glad my passport is being accepted after going through the laundry.

Bye Bye, Vonage

We were enthralled with Vonage as a reliable and cheap VoIP service for our home phone. But after several weeks of non-service because of an error in their OSS and incompetent support, we're making the switch to Skype.

Most of our phone bill goes to calls with Estonia. Now we have an Estonian SkypeIn number and voicemail for 30 euros per year. Our friends and family in Estonia can call us for free (Joi did a similar international arbitrage trick with Vonage). SkypeOut is used for calling a handful of people who aren't on the network.

Skype numbers are available for Denmark, Estonia, Finland, France, Hong Kong, Poland, Sweden, the UK and US (not in major area codes from a quick glance). When other countries with ethnic diasporas are supported, I'd expect a significant switch because of the allure this arbitrage. Then imagine if they supported multiple SkypeIn numbers, not just for arbitrage, but as a decentralized PBX.

Skype is hardly perfect. We use it for Socialtext and it frequently hangs when people are trying to get together for a timed call. But for consumer use with mobile phones as a backup, phone companies are scared for a reason.

Open Estonia

  Feeling Estonian 
  Originally uploaded by jurvetson.

Had a fascinating lunch with Juhan Parts, Prime Minister of Estonia 2003-2005, his delegation and some local Estonian leaders hosted by Steve Jurvetson at DFJ.  I believe the conversation was off the record, was generally on the future of Estonia, so let me just say some things on my mind independent from the meeting:

Our little country as at interesting turning point.  After EU and NATO succession and the development of a stable and growing economy, the question is, what's next?  The cost of living is rising rapidly in harmony with the EU and the sources of growth over the past 10 years will decline.

I have some strong views given my experience as an expat entrepreneur and former public sector contributor.  And given that I am thousands of miles away, I can voice them strongly.

Estonians are bright, honest (although they also have many who game systems, which keeps it healthy), well educated and hard working.  However, the long road to independence and establishing an identity while overcoming 50 years of occupation has led to complacency.  Estonians have a superiority complex and are intolerant of real diversity and don't trust strangers.  In a flat world, this is a competitive disadvantage.  Immigration and language policies once designed to keep Russian colonists at bay now hamper growth.  Education is mired with cruft institutionalism.  Regulations are unfairly applied, sometimes you are guilty until proven innocent.  Entrepreneurship was discovered by some through hardship, but the culture punishes failure.

The solution to this is to Open Estonia.  Invest in developing clusters of capability by supporting entrepreneurs and investors in new areas of competency.  In line with EU intent, open immigration so the best people who want to work with Skype and others can more freely (in Silicon Valley 70% of CEOs are first generation immigrants).   Open the education system to leverage open courseware and distance learning. Invest in more exchange programs.  Open source software becomes a strategic investment in developing capabilities.  Continue e-government initiatives towards transparency, feedback and internet voting -- recognizing e-government is not just about efficient provision of services, but civic engagement.  Invest in language technologies to remove barriers with other culture.

I would live in Estonia if it wasn't for:
* Un-cosmopolitan intolerance of diversity
* Business risks (not costs) that stem from the government instead of the market
* Cold winters

This is all very strong language to head off a nationalist streak that is so tempting when either backed in a corner or experiencing short term success.  The reality is living in Estonia is great for expats who can understand the larger context and Estonia has a bright future, except for the approaching dark winter.