"DotEEBubble is one of the most controversial startup blogs in the world and you've probably never heard of it." -TechCrunch

Monday, March 4, 2013

Introduction and Welcome

A Brief Introduction

A blog about Estonia? A blog about a bubble that may not exist? Why?

Over the past two years, we noticed there was more and more information about all the "great" startups in Estonia. Unfortunately, most of the talk was about startups that won some type of competition or got an investment. There was little talk of what really matters -- getting customers and making a profit.

This reminded us of the late 1990s and early 2000s, when the same thing happened in the US during the .com bubble: too much talk and not enough results.

What really capped it was the announcement of a 100 million EUR investment fund for the Baltics, known as the Baltic Innovation Fund (BIF). 100 MILLION EUROS! That was a sign that things had really gone too far. It's simply too much money floating around, with not enough good ideas to invest in.

How do we know this? Well take a look at the portfolio of Ambient Sound Investments (ASI). They were started with the proceeds from the 4 Estonian original Skype programmers, and their goal was to invest in Estonian startup companies. As you can see from their portfolio, they had to branch out to Asia and beyond to find suitable investments. They could not find enough Estonian companies to invest in. So why will the BIF do any better? They're saddled with more money than ASI, but all the viable startups have already been invested in, as ASI (and MTVP) have picked off all the good ones.

The result? Get ready for the bubble. We've seen it in the US, and it looks like it's going to happen in Estonia.

Why You Should Read Us

What we've found disappointing is that there is little real analysis of the Estonian startup scene. You can read plenty of press releases, both directly from the companies and from lazy journalists who seem to just regurgitate the press releases they are given. This is what we're here for -- to provide unbiased, data-driven analysis of Estonian startups and the environment they operate in.

Who We Are

Blog posts come from a number of experienced entrepreneurs, who are familiar with running successful startups and also with Estonia. We are also neutral -- we hold no investments in any companies in Estonia (other than companies we run), so we have nothing to gain or lose when an Estonian startup does well or otherwise. We're writing anonymously because people in Estonia seem to take criticism, even of the constructive form, quite poorly.

How You Can Help

There's a lot of information out there. Please email us any tips: doteebubble@gmail.com You can also comment on our blog, and do it anonymously. Feel free to call us idiots, but at least explain why.


  1. With greatest respect - anonymous post are super lame. Totally. Specially if you think about global view. Who would EVER wrote anonymous post in Bay area? Rarely anybody. Even if you have some very valid points, you are diluting it so much. Also - who you should be afraid of estonian reactions? Estonia is just a small boutique - if you really know something about startups, then you should not care local reactions. So my advice - show your names. Otherwise this is just another Delfi comment.

    1. Based on what these guys have written so far, I think their blogs posts are 10 times better than any Delfi comment.

    2. Way to focus on the messenger instead of the message. That's "super lame."

    3. First, I don't know why "Bay area" would have any reference value. So what if anonymous postings are common/rare in Bangalore, California, Zhong Guan Cun etc.

      Second, there are many cases why it's very understandable to write anonymously. How would it otherwise be possible for government officials or well-known people in business to attend discussions - without immediate concerns of bias, confidentiality, conflict of interest etc. I think it's very valuable that also those people can express their personal views - as they often have something to contribute.

      Third, as there is a risk of government-distributed money taking bigger role in the start-up scene, it's natural people are careful about criticizing the system. If certain people don't like you, it will be more difficult for you to get public funding. Public funding is often distorting competition and scaring off private funding, only few people are brave/stupid enough to potentially burn bridges in front of them. This development can be seen in several countries with active government participation in funding of innovation.

  2. Guys if you are going to bash an emerging startup scene, you should at least have the courage to do so under your own name. Anonymous commenting is the worst thing that has happened to Estonian internet culture and you're encouraging it.

  3. imo being openly critical in Estonia about estonian businesses is very risky. so still brave thing to do by those guys here. for those who are taking it personally - take the criticism into account and learn from it. if you are offended by it, it is true, otherwise it is not about you and move on.

    1. RIght on.

      Unfortunately. Some people like to live in bliss. You can't suppress the truth and reality of the situation. Better to face the music now and improve your changes of succeeding by accepting the problem and fixing it vs hiding them.

      It takes massive balls to listen to the negative feedback. I believe Tauno's and Ragnar's reaction again proves the point that most Estonians do not accept negative feedback easily. If someone called you fat, would you try to confront everyone in the world that had that opinion, or would you maybe take a look in the mirror and say - damn - im fat - let me change this.

      It's human nature to fear negative feedback. CONCUR THIS FEAR, taking good analytical feed back and make the change - or start a healthy debate with your numbers, and close the gap.

      Do this and you can be an example for your country.

  4. Have to agree with the last Anon.
    Although Estonian startup scene is highly developed compared to ... most of the world, a healthy dose of criticism is definitely welcomed here.

    Dave McLure has a nice term "startup ghetto".

    It is pretty dangerous to be openly critical in a ghetto.

  5. Not having the guts to post under your name is one thing but to only criticize without constructive suggestions is worse and not very professional. Nor is misspelling names such as Dave McClure.

  6. How many readers do you already have?

  7. Any other way to follow you besides Twitter? A Facebook page in your future or perhaps something else?

  8. I have never understood those startup-bubble crtitics. Enterpreneurhsip has always been a risk. Why the hell to critisize that? IT-startups are just starting businesses with a bit more innovative businessmodels with larger market. And as there is still opportunities here, ofcourse its attracting money and investors, very normal economic progress. I bet there are thousends of haircutting businesses going bancrupcy every year, hundreds of millions wasted on launching some shops in a wrong location etc. I wonder is there statistics about that somewhere? Instead of writing pointless posts on enterpreneurship risks, I'd better do something useful.

    1. Sure, startups fail all the time, but with private investor's money. It looks like with most of the companies these guys have written about, they got lots of money from the government. It's a good idea to question if this is the best use of that money. When I was in Tallinn last time, I saw a lot of people who looked to be living in poverty, and a lot of the roads were in bad condition too. Why isn't the government spending more money to help the poor?

  9. May be you remember (or may be not, because of your age) but anonymous letters (анонимные письма) weren´t highly valued even in soviet times. Sorry.

  10. That's the sickening part of it, this is done with government money. As it's well known in Estonia, government money belongs to no-one (except the people that actually show a profit and pay taxes).
    The ideas that generally have any merit get private financing with ease. The ideas the are born dead apply for government funding.
    The country is well known to be a layer of schemes on top of other schemes with very like real economy in the middle.
    As a person who produces REAL profit and pays taxes, I feel cheated on. But the truth is, if any of the ideas are successful, they emigrate their base and won't pay a cent of taxes to Estonia - leaving the Estonian tax payers bag holders.

    And anonymous writing is perfectly fine since this is Estonia, writing under your own name can get you fired for any random reason.

  11. Keep up the good work guys!
    Whistleblowing with analysis is never an easy job. As for the opponents it´s always common tactics to attack the messenger and not the message.
    I think the main message of the blog that public money should be invested with great care and not betting on high risk sexy startups is completely valid.

  12. As a person who produces REAL profit and pays taxes, I feel cheated on. But the truth is, if any of the ideas are successful, they emigrate their base and won't pay a cent of taxes to Estonia - leaving the Estonian tax payers bag holders.

    You deserve a full mention for this. And it should be on the first page of all media, instead of the constant annoying 'rahasüst' to the usual 'idufirma' to pay yuppie's wages. After filing unsuccesfully n applications to EAS to cover 50% of technical equipment, we are now producing abroad and fired 4 places in Estonia. Why? We are a 'boring' industrial company and not a fancy showoff.

  13. Great site, showing what we have long suspected.

    The Estonian IT bubble has always been some sort of blow job for Andrus Ansip, just like the financial disaster that's called Estonian air, or wind power to compete with Shale oil generated electricity.

    TBQH, I would rather be throwing good money into subsidised Shale oil, knowing that everyone benefited by having the cheapest electricity, than knowing scarce tax payer's money that impoverishes teachers and nurses, was being used for a bunch of freeloaders running around Tallinn in Hummers & Mercs on the back of a monster TECH scam, then recycling the cash in a bistro in London's east end.

  14. Someone contacted me last night to ask me if I was the main author/architect of this blog.
    I can honestly say that I have not been paid such a huge compliment for sometime.
    I can see why he might have thought so, I have had a fair amount of experience dealing with and advising start ups on internet marketing issues and also did business with EAS on a number of occasions and on more than one occasion I felt very uncomfortable and in some cases I withdrew my involvement.
    I don't claim to be any guru in the area of funding but when I see companies (and state organisations) wasting money and turning down sensible and cost-effective solutions to problems it really pisses me off, especially if it appears that some of the hands involved need a damn good scrub...
    I don't think corruption is the only issue, if it is one, in some cases it's also laziness. Some people are just too lazy to work hard to find the best solutions and instead just throw money at the problems/opportunities in the hope that someone else will do the real problem solving.
    I am not going to go into any details in this comment as I am not posting anonymously and I respect the confidentiality clauses I signed....however I praise what you guys (and gals?) are doing and urge to continue your good work.

    BTW I was running an internet marketing agency in the Uk (one of the first) from 1997-2002 so I witnessed the bubble first hand. Two of the worst offenders were pets.com and boo.com - but you can read more here http://en.wikipedia.org/wiki/Dot-com_bubble