Estonian E-Residency to Solve European Migration Crisis

E-Residency to Be Granted to All Refugees

FOR IMMEDIATE RELEASE

Tallinn, Estonia, 1 April 2016. The Estonian government announced today a revolutionary solution to the European migrant crisis. Starting today, all refugees and asylum-seekers will be granted Estonian e-residency.

"As the largest per-capita recipient of EU funding in all of the EU, we knew it was time to do our part and help solve the European migrant crisis." said Taavi Babyface, Estonia's prime minister. "Estonia, land of Skype and Transferwise, is an innovative country and we came up with an innovative solution, unlike those pesky Germans. Rather than having all these migrants travel to Europe, we'll just grant them e-residency and they can stay at home!"

The solution helped to appease some of the biggest critics of accepting refugees, like member of parliament Karl Closedmind. He commented: "The EU wanted us to take in 550 refugees to Estonia, and that's simply too much for a tiny country like Estonia. All these Middle Eastern, Muslim, Arabic-speaking immigrants will destroy Estonian culture and language. There will be kabob shops on every corner, and we'll have to make Ramadan a national holiday. Some people say that with such a small number of refugees, this won't happen, but I tell you they're wrong! Did you know there are over 600 American immigrants living in Estonia? Now look what happened! There's a McDonalds on every corner, we have a national holiday for Christmas, and all the Estonian kids are speaking English and using iPhones! Damn those Americans, why did we ever let them in!?"

Refugee problem solved! [Photo Credit]

In terms of how the e-residency program would work for refugees, Kaspar Optimist, program manager for e-residency, said: "It's simple: The applicant just needs to go to the nearest Estonian embassy to apply and show their documents, and we have one in Ankara, Turkey. The fee is only 100 euros, and Ankara is a short flight from most countries in the Middle East. In preparation for millions of applicants, we've increased embassy staffing there from 3 people to 4 people. That's a 33% increase!"

When asked what refugees can do with their e-residency card, Prime Minister Babyface beamed: "Many of these refugees are coming to Europe to work, so with e-residency, they won't need to. They can use their e-residency card to start a business online, set up a bank account, and even digitally sign documents! It's a great way for them to earn money while staying in their home country."

Some refugees spoke highly of the announcement. Mohammed Ali, a resident of Homs in Syria, said: "This is great! I can start a business using my e-residency card and earn money to support my family! My first idea was to create a website that is a social network for dogs, but I see that was already done by an Estonian company. They say the best ideas for a business come from right around you, so I decided I'm going to start a company that builds houses from empty bullet casings and used tank treads. That's pretty much all my village exists of now anyway!"

Another potential e-resident, Suleiman Al-stonia from the village of Azaz near Syria's Kurdish border, was equally excited: "This e-residency sounds great! I can start a company and sign documents online! I plan to apply as soon as electricity returns to my village and I can buy a computer. Well, I may have to wait a while as the entire village has been bombed to rubble, but I'm sure the computer store will open once the village is rebuilt. In the meantime, do you have any food? I haven't eaten in 3 days and our village is surrounded by militias."

Plans to start company online... as soon as the bombing is over.

In fact, some refugees have already obtained their e-residency cards. One young Syrian reported: "So I got my e-residency card and had big plans to head to Estonia, but the guards at the border fence in Hungary wouldn't let us through! What good is this thing?"

Hungarian border guards not fond of e-residency

Another refugee with e-residency knew better though: "I'm staying in my village here in Syria and I plan to start a business and sell cookbooks. My cookbooks will be unique as all the recipes are about making a meal for only one person. I had a family of 7, but they were all killed in the bombings except for me. The same goes for many people in my village, so this cookbook will definitely sell well. Thanks Estonia for offering me this great e-residency!"

Despite all the positive news about e-residency, the ultra-right anti-immigrant group Soldiers of Odin was not pleased. Martin Jarhead, lead soldier of the Estonian branch, said: "This is an abomination to give e-residency to all these dark-skinned, swarthy refugees! Soon, our e-stonia will be overrun with Muslim men of Middle Eastern origin. Our fair-skinned Estonian women will be afraid to surf the internet at night. It's already happening, too. I heard a rumor that one Estonian girl was e-raped by an e-refugee. He tried to insert his e-residency card into her e-card reader, and he didn't even ask her PIN code! These men are animals!"

Responding to criticism from ultra-right racist groups, Prime Minister Babyface said: "Look, we set a goal of gaining 10 million e-residents by 2025, and we're only at 10,000 so far. With our declining population, the only way to reach that goal is with immigrants. Oh, and April Fool's!"

Signwise : An Unwise Failure

Signwise : Nothing Wise about this Famed Estonian Startup

Signwise is dead. Long live Signwise.

Or are they? What we know is there was a bankruptcy filing in December. It was also reported the founders are no longer talking to each other. The company, which is actually comprised of three separate companies, has considerable tax debts, has been renamed 3 times in the last year.

Company 1: Cross Borders Trust Services. No tax debt. Used to receive taxpayer money since you can't get a taxpayer handout if you have tax debt.

Company 2: SW Development, now Stratford Reserve.

Company 3:Signwise, then SW Sales, now Vincent Berea.

Their website is still up, and it was reported the bankruptcy claim was withdrawn, and they moved to the UK and will have all tax debts paid, but that claim was made on February 2 and as of March 8, the tax debts are still there:

Company 2: 17,487 euros owed to the taxpayer

Company 3: 11,666 euros owed to the taxpayer

Is this a winning company? They do have wise in their name, which seems to be the latest trend with Estonian startups (see Transferwise, Shipitwise, Fundwise, Carwise, Codewise, Clockwise.. or any of the other 158 companies in Estonia with "wise" in their name, and no we're not kidding). It's a lot better than when all Estonian websites ended in “24” (Credit24, City24, Auto24), apparently to indicate that unlike all other websites that were only open 8 hours a day, their websites stayed on the entire time!

All signs seem to point to failure. To us, the 3 separate companies is a suspicious sign. It also shows the danger of the Estonian ID card and the ability to create a company online in under 15 minutes. While all most Estonian women worry about from their heavy drinking is a one night stand with some bearded, skinny-jean-wearing hipster and doing the walk of shame home from Kalamaja past the judgmental eyes of the babushkas waiting for the tram at Balti Jaam, men have even more to worry about. Imagine coming home wasted, then waking up the next morning slumped over your keyboard, and discovering you created a social network for dogs startup company after you came home.

Then there’s our friend who left his ID card logged into the Estonian company portal (don’t we all? It’s our start page when we open our browser each morning.) while he had some friends over for a night of drinking. He woke up to discover he’s now the founder of 5 Estonian startups, including Dildo24, HipsterDating24, and MyCatsBreathSmellsLikeCatFood. Less surprisingly, 3 of his startups had already received government money from EAS.

One more drink Taavi, and you may create a startup to let people read books online.

But enough about our weekend. What the heck is a Signwise, and why would anyone want it?

The Idea

When Signwise launched in 2012, it was to great fanfare. They were the darling of the Estonian government and media. It was essentially a spin-off of the national ID card infrastructure, part of Estonia’s e-government initiative that made lives easier for all Estonians, and effectively eliminated all poverty and drug addiction in Estonia, now that they could interact with government over their computer.

Signwise was the commercial version of the ID card initiative, but just for signing. They provided a solution for a user to sign any digital document, and that signature could be digitally authenticated.

In other words, instead of printing a document, signing it, scanning it, then emailing it, you could sign it online, and the recipient could easily verify your signature was valid and you (and not someone else) actually signed it.

Her half-smile is because she's thinking about her tryst with a Kalamaja hipster, not because she likes scanning documents.

So what was the problem then? Why weren’t companies and consumers beating down the door of all 3 Signwise companies, in a rush to buy this great product?

Let’s have a look at how documents and signatures work in real life. First, let’s look at the consumer side. Generally, people don’t sign documents very often in their personal life. For big purchases like a house or a car, they are not conducting this purchase online, so they’re already at the seller’s office and can just sign in person. Besides, purchases like this are made only a few times per decade.

Will happily sell you 10 cars a year. Formerly a top salesman for Signwise.

There are other contracts people may enter into, like signing up for mobile phone service, or internet, electricity, and cable TV service when moving to a new home. These might take place more often than buying a car, but is a digital signature really necessary? Not really. A company can still take the order and have the customer agree to the terms of service online – you do this all the time when logging into Facebook or Google and they have new terms of service you must click OK to accept.

But… what if a customer signs up for electric service, then later claims when the monthly bill arrives that they didn’t do it? Won’t companies lose millions that way? Without a true digital signature, their consent to enter in the agreement can’t be verified.

In practice, this isn’t a big problem. First, the company can easily just turn off service, so at most they take a loss of one month of service. Second, that’s a lot of effort for the customer to go to just to get one month of free electric service, and it will make it difficult to resume service after that happened. We think that companies are fine with their current methods, as it’s easier for customers (no special software to install for signing), and the risk of fraud is low. (Most companies also run a credit check when you apply for service, so it would be difficult for someone to forge that also due to the information needed during the check. We left that bit out for simplicity, but that’s probably more of a validator than a signature anyway.)

If only they had Signwise...

What about companies? Wouldn’t Signwise benefit them immensely? Companies do a lot more contract signing among each other, like a company signing a contract with a new supplier or customer. A typical mid-size company may sign such contracts many times per month.

The need here revolves around trust. Digital signatures are beneficial when one party doesn’t trust or know the other party well enough to know that their normal signature (or even lack of signature – like just writing “Yes, that price is good. We’d like to order so please send an invoice.” in an email) is valid and trustworthy.

But what typically happens is that these types of relationships, like company-supplier and company-customer, are long-term relationships. Both parties know each other, and trust is built by doing business. One party sends the invoice, the other party pays it, and then the product or service is delivered.

Do you think such companies are going to bicker over if the hand-written signature or consent in an email is valid or not? In court, those will generally hold up, especially when it can be shown both parties continued the business relationship after the agreement was made.

Yes, there will inevitably be a few disputes, but somehow, business in countries without Signwise technology, like the UK and the US, seems to be going smoothly despite not having Signwise’s great technology.

Surely it sounds like a good idea to move the signing process online though, right? After all, no one likes printing a contract, signing it, scanning it, then emailing it. What if you could just pull up the document on your computer, sign it, then email it back? That would save a lot of time, hassle, and paper too!

Well it turns out just about every computer in the world already has this capability. It’s called Adobe Acrobat, and it’s the Fill & Sign option in the Tools menu. It’s included in all free versions of Acrobat.

Amazing technology, and it's free!

Yes, there are limitations to using Acrobat. You can only sign PDF files, and the signature can’t be digitally verified with a third-party authority (actually that’s an option, but most people don’t use it). But as we explained above, signature verification isn’t that necessary in reality. As for being able to sign only PDF files.. well unless you’re a celebrity or sports star, you probably don’t need to be signing photos or image files anyway.

They were so surprised anyone wanted their autograph, that they forgot to use Signwise.

In summary, Signwise is a solution that may seem good at first, but is in fact addressing a problem that isn’t much of a problem at all. Perhaps that’s why they’re basically bankrupt.

Time to Milk the Taxpayer

And now… the money!

A great e-solution like this was bound to get government money to promote e-stonia on it’s e-quest for e-world e-domination. Of course it did.

First there was 323,566 euros in taxpayer money from Enterprise Estonia:

Because once is not enough, they got money 3 times.

Not to be outdone, the lutefisk-munching Norwegians also tossed them some taxpayer money, 254,737 euros to be exact:

Signwise is going to help "green" the European economy?

Guess how the Norwegians were conned: Signwise is a solution for the "green economy" and will help the environment. We should have applied for the same grant, and presented them a free copy of Acrobat Reader in exchange for that money!

Even taxpayer-funded Arengufond got in on the game, providing special sales training for Signwise. You can see how that worked out.

To sum that up, adding in the 3 handouts from Enterprise Estonia, and the other grant from the Norwegians, and the unpaid tax debts, Signwise has cost the taxpayer 607,456 euros.

Lessons Learned

We like computers. They make lives easier and help us with mundane tasks we'd rather not do on our own, like computing pi to 1,000 digits. However, we sometimes see a tendency in Estonia to want to digitize everything. That sounds good in principle, but first it's important to consider if the product actually solves a real problem, and if customers are willing to pay for your solution. For Signwise, it looks like it wasn't a very wise solution at all. That's fine if the situation was like in most other countries, where private investors and not the government invest in startups. In this case, Signwise wasted taxpayer money, benefiting no one except the managers of Signwise.

Is there a better way to spend that taxpayer money? The Tallinn Food Bank, which provides food to over 1,700 hungry families in Tallinn, and costs only 350,000 euros annually to run, is running short on money. The money wasted enriching the few at Signwise could have been spent feeding thousands in Tallinn.