Congratulations to Skype and Estonia

While I join everyone in congratulating Skype (Jeff has posted some good comments and links to other blogs on this) and all the great people there, there are many reasons why the Skype deal is also of great importance to Estonia and Estonians. It should be a big push to start new successful tech startups and for enterpreneurs to look more actively at international markets, something that has been very limited until now.

Like the growth of the company and now the acquisition has shown, it is possible to grow world class technology companies out of Estonia. You must have the courage, hire the best people and think outside your region. But an important part is not to limit yourself to only Estonian employees, even if you are an Estonian startup, but look for best talent all over the world. And if needed, locate your management, sales and marketing where there are the best people for that, for example in US or UK.

True, you can say Skype is not Estonian per se, having its holding company in Luxembourg (tax reasons?) and big part of management and marketing in London. Still over 80% of the employees are located in Tallinn, and all of the product management and software development as well as other technical functions are done here in Estonia. Pretty good for a country with only 1,35 million employees and a total headcount of less than 5-8 thousand IT people in the country (my very rough estimate). Skype with its soon close to 200 people in Estonia has not yet been the one sucking in all the best people and currently the effect on the job market has been small. But there is definitely a risk for companies hiring tech people in Estonia of Skype getting your people, be it for higher salaries or just for being a cool place to work at.

Like my experience with CV-Online and CVO Group has shown, it is possible to expand internationally from Estonia. CVO now has offices in 9 countries and in addition to that single employees in places like Ljubljana, Slovenia and Nairobi, Kenya. In most of the countries it has managed to become one of the top online or offline recruitment companies in a market with very strong competition. Hiring the best people in each key market is important, then getting them to follow a joint vision, and then operating the business in their countries with a local touch.

Estonians and Eastern Europeans are very good at developing new innovative solutions, but we usually suck in things like sales and marketing, international business development. We can design and produce cool stuff, but rarely succeed in communicating and selling what we have abroad. Small, may be non-existant part of that is based on cultural differences (same applies to Scandinavians), us being somewhat slow, non-aggressive and quiet. Ross has written something regarding this as well. Mostly this is still based on just lacking the skillsets that you have developed in the Western world over tens and hundreds of years of free market economies and enterpreneurship.

The only solution for this that I see is hiring people from US or Western Europe into your management teams and for sales and marketing. Working next to them is the best education in this field you can have. Something you would learn by just doing it yourself in 5-10 years can that way accomplished in a year. One reason for CVO being successful in the CEE region has been hiring people from Western Europe and it really has helped us to get on the next level. Together with them we have also grown our local employees and they are now much more experienced compared to the competitors consisting of just local skills.

So Estonians, go out there and do what Skype did, thinking and hiring internationally. Develop products and services that people really need and like, and you might be the next Estonian multi-billion dollars startup.