Why we are e-moving our company to Estonia: Introducing Edgeryders Osaühing

“We know, the pitch looks better than reality” – says Marten Kaevats. “But we’re working on it.” I look around. They are working on it, all right.

Marten, Henri Laupmaa and I are sharing a meal in Telliskivi Loomelinnak (“Creative City”). It’s a huge Soviet-era former electronics factory in Northern Tallinn. During the boom of the early 2000s, real estate tycoons had planned luxury condos here. When the crisis hit, they rolled out a plan B of making it into a hip-and-cheap creative business hub. Now it’s home to 200 businesses and NGOs: design studios, tech startups, co-working spaces, clubs. It’s airy, colourful in the slanted light of the Nordic spring. It looks hopeful.

Marten is the Estonian government’s Chief Innovation Officer. Henri is one of the country’s foremost fintech entrepreneurs. They both used to be grassroots communities organisers. They showed up to welcome me, and point me in the right directions. I am grateful for their advice and their company. I need it: I have come to Estonia to relocate my company, Edgeryders.

Edgeryders is small, high-tech and global, a typical child of the Internet. We were born as the project of a supranational institution, the Council of Europe. We developed as an online community, with members living in 50 countries. When we built a company on top of that community, the six members of the board were citizens of six different countries. Our first clients were global too: the United Nations Development Programme, UNESCO, the World Bank.

Our loyalties are to Planet Earth, and to each other. From a legal point of view this does not fly: a company has to incorporate in one country (and almost all countries design for traditional companies, and make no provision for businesses like us). In 2013, we chose the United Kingdom. It seemed, and was, a natural choice. It has a great ecosystem of services to business. Government services are well thought through, well documented and online, from HMSC to the Information Commissioner’s Office. The main black spot is banking: expensive, dysfunctional service, ethically dubious banks. But the advantages outweighed the disadvantages.

And then Brexit happened.

This is not the place to discuss the political hows and the whys, nor am I particularly qualified to do it. I want to look at Brexit and post-Brexit from a risk management perspective. There are two kinds of risk here, and both were obvious even before the vote.

Risk number one: becoming a bargaining chip. Over 3 million EU citizens living in the UK were not allowed to vote, or even consulted. They were, in the political jargon of the time, “a bargaining chip”. The UK only cared about nationals. We are not nationals. What if the government decided to play hard and fast with the assets of companies owned by foreign nationals? Freeze our bank accounts, for example? Could we be the next bargaining chip to throw on the negotiation table?

Risk number two: taking collateral damage because of the government’s incompetence. No one knows for sure what the consequences of a hard Brexit will be. What happens to the treaties on double taxation, within Europe or outside? What to VAT on cross-border transactions? What are the consequences of the UK not being a member of WTO anymore (its WTO membership went through the EU’s collective one)? These would be hard questions for anybody. But the British establishment keeps going through “oh, shit” moments. Wait, what about the Irish border? What about Gibraltar? What about funding to research? What happens to trucks queuing up at Calais and Dover in the case of hard Brexit? All this handwaving has not done much to reassure us.

So far, I have given you the rational argument for not being comfortable as a business owned by EU nationals but incorporated in a post-Brexit UK. We also have reasons of the heart: we are not big on nationalism. Nationalisms killed a hundred million people in Europe during World War 2 alone. We believe, instead, in peace, peace and prosperity through trade. Trade is communication: to sell something, you have to put yourself in the shoes of your client, to empathise. This vision is clearest in the project of a united Europe, the more united the better. We feel united in Edgeryders: we hail from every nation in Europe, and many outside it. We enjoy our unity in diversity, and will allow no one to put us against each other.

Our minds and hearts, this time, were in agreement. We have become Brexit refugees. And we need to do what refugees do: move.

We applied to Estonia’s e-residency programme before the vote even happened. We chose Estonia because:

  1. It is in the EU and runs the Euro. We don’t risk losing access to our major market. We are protected against currency turbulence.
  2. It makes explicit provision for location-independent businesses, like us. E-residents are meant to be foreign nationals, or Estonians abroad.
  3. The game theory checks out. Look: Estonia is a tiny country, with only 1.3 million citizens. They aim to have 10 million e-residents by 2025. And that’s the entire country’s business plan right there, because 10 million e-residents translate into 100,000 good jobs in finance, insurance, accounting, real estate. If the e-residents are unhappy, they will go somewhere else, and Estonia can’t afford that. The equilibrium of this game is: they give us good services, and we keep using it, and keep their business plan humming along.

The system is far from perfect. For example, the Republic’s banks and accounting firms are subject to international anti-money laundering regulation, aka “Know Your Customer”. So, the government allows e-residents to incorporate a company from a web page… but then your accountant will ask you for a utility bill as proof of residency. Banks are even firmer: either you show up in person, or no account (regulation is in the pipeline that should solve this). Also, Estonian professionals are still new at this game, and it can be difficult to get information.

But Marten is right: it will get better. Estonia wants to be a “pathfinding” country. Given how small it is, this makes sense in a way that it would not in Germany or the UK. They have plenty of vision (“country as a service”, “zero-legacy policies”, “accounting 3.0”). They have a young, energetic ruling élite. They can do this. We look forward to be part of it.

So, say hi to Edgeryders Osaühing. It is an Estonian private limited company, incorporated as of March 30th 2017. We will be phasing out Edgeryders Limited By Guarantee in the course of the next year.

Reposted from Edgeryders. Photo: Troy David Johnson on flickr.com

Spawning The Reef: re-inventing communal working and living (again)

Reposted from Edgeryders

A few years ago we started paying close attention to care. Ready-to-go, affordable health and social care was – and still is – unavailable. Not for some unknown person in some distant land, either. For friends and family members, people in our communities, right here. Something had to be done.

We see people coming together, stepping into the breach. Communities are taking up the role of care providers, making it work where neither the state nor private business could. They are doing amazing things. Hackers make open sourced, internet-enabled glucose monitors for children with diabetes. Belgian trauma therapists set up mobile studios and drive them to refugee camps in Greece, to help bereaved refugees. Bipolar 1 patients find and help each other fight back suicidal tendencies. Biologists and biohackers are trying to invent a cheap, open source process to make insulin. Activists in America encourage each other to eat healthy food and exercise by doing it together.

We started a research projects to take a good look inside these and many other stories. We wanted to learn what these initiatives have in common, and how we could make more. That project is called OpenCare; it is now in its second year. Results are still coming through, but one thing is already clear:

It’s all about humans.

Community provision of care services needs humans:  more, better prepared, volunteers. People prepared to teach each other skills.  Therapists to help volunteers in need of trauma support. So, the highest-impact technologies are those that help bring people together. Share knowledge. Distribute human resources across different care contexts. These technologies are connectors: they help string together and coordinate human efforts.

This intuition is fundamental. It goes even beyond care. And it makes sense: we are, after all, the 99%. We have little money and power. We have no large companies, fancy foundations, prestigious universities. But we do have each other. We will thrive, if we can collaborate. Collaboration is expensive, and hard to monetise. Any technology that makes it more efficient is going to make a difference.

At Edgeryders, we have resolved to put this lesson into practice. We are doing it by hacking the most fundamental connecting technology of all: the home.

We dream of a new kind of space, that can be the hearth for our families but still be open to the broader world. Where the door is not a gate to keep the wolves out, but a bridge to a global network. Where we can live, and work, and sometimes work with the people we live with, and live with our co-workers. Where people are welcome to stay for one day, or a lifetime. Where spending even just an hour in good heart ensures you will never be a stranger again. Where we can develop our talent, learn new skills, get better at what we do. Where we can create for each other a healthy, friendly, cosmopolitan environment and, yes, take care of each other.

We have dreamt this dream before. In its previous iteration, we called it the unMonastery. We prototyped in 2014, in the Italian city of Matera. That experience taught us much. The most important lesson was this: a life/work space can not be too close to the needs of a single client. Neither can it be dependent on the grant cycle. It needs to be financially self-sustaining, and benefit several projects and lines of business. We also learnt how important it is to be diverse, open and outward-looking for fresh air and fresh ideas to circulate at all times.

But the unMonastery also got many things right. The one I am proudest of is this: we went ahead and tried it. Planning and due diligence are necessary, but trying things out makes for richer learning.

So, we are not going to keep dreaming about a new space. We are trying a second iteration. Right now.

We are calling it The Reef. Coral reefs are structures built by tiny animals, corals. They serve as the home, anchoring point, hiding place, hunting ground to thousands of species. Algae, seaweeds, fish, molluscs all cooperate with, compete with, eat, feed each other. As they do so, they benefit the corals, who gain access to nutrients (reefs exist in nutrient-poor tropical waters).

Like coral reefs, our new space will draw strength in diversity and symbiosis. Different people will bring in different skills, access to different networks, different personalities. And Edgeryders (a social enterprise, so a creature of a different species) will live in symbiosis with the space and the individuals that live in it. It will pay rent, subsidising those who live there; in return, it will be able to use the space for its own purposes: office, coworking space, venue for small events.

And like coral reefs, our new space is going to be an ecology – a network. There are many ways to take part in it. Some people will want to live there full time, others will show up once or twice a month, or a year. Some will use it on building projects with us, and with each other. Others will work on shared learning and professional development. Of course, we already have a network: the Edgeryders online community itself. This will not go away, in fact it will become ever more important. But now The Reef will give it a permanent offline presence. Reef members will be the kernel of the Edgeryders community. Everyone is free to join the kernel or not; everyone is free to play the role she feels most at home with.

We ran the numbers and we are sure we can make it work. We are going to start with a small-scale prototype: a Brussels loft, with four bedrooms, common living area, office, courtyard. Noemi , Nadia and I are going to be full-time residents; one more room will host temporary residents. We are going live on May 1st 2017, and try it out for one year. We are already looking for a (much) larger space to move into in spring 2018 if the experiment goes well.

Are you considering being part of the experiment, or just curious about it? There are three things you can do.

  1. We are planning a side event to OpenVillage Festival dedicated to The Reef. There, we will design the physical space, its financing model, and the activities therein – from business to physical fitness and personal development. It is restricted to members, because this is our future home we are talking about. It’s up to people with skin in the game to make decisions about it. Info here.
  2. We are running our first personal development event in The Reef itself on 26-27 May. We will learn to be better public speakers in the Power Pitch weekend. Info here.
  3. Get in touch! Write, or join our community calls, or come over for coffee.

So: a place-based symbiosis of some inhabitants of the edge, a mutant company, and no book to do it by. It’s not going to be easy. But it has the vibe I was looking for: the excitement of building, and the pleasure of doing it with good, solid people. It is in the sweet spot between ambition and achievability. And I, for one, am going to give it all I’ve got.

Bali’s spirituality market

“Ecstatic dancing. Astral plane walking. Portal opening. Crystal healing. Mestrual blood drinking. Ayahuasca ceremonies. Every yoga style you can think of. You name it, they’ve got it.” I stare at Lars as I try to digest the implications of what he is saying. Lars (not his real name) is a Swede who quit his engineering job and moved here last year. He loves it here.

It’s not hard to see why. Bali is an equatorial paradise – we all know that. Warm weather all year round, beautiful nature, rich culture, and so on. As many tourist destinations, it has given rise to internal specialisation across areas. Kuta, in the south, is very popular with young Australians who like to party and drink hard. Ubud, in the center of the island, has become a sort of cultural hub. This is where Lars and I are staying.

Ubud has no beaches to offer. Its main product seems to be what Anglos call spirituality. It is a veritable supermarket for spirituality practices. It teems with counsellors, spiritual healers, gurus and teachers of various ways. Shaman, Demon Hunter and Forest Goddess are job titles here.

All this comes in a bundle with the cheap, high-quality consumer services common in Southeast Asia: massages, scooter rentals, raw-vegan cafés and restaurant, spas and so on. So you can go on your self-discovery journey and margaritas are cheap. That’s a strong value proposition, and it has fuelled impressive growth in the Ubud tourism economy. According to some estimates, tourism accounts for 60-80% of Bali’s GDP.

Tourism here in Ubud has a strong long-stay component. Many people, like Lars, stay here months, even years at a time. They work online, generally in tech; here, they can afford a much higher level of service that they would back home. Or they take a sabbatical, and again here you can live well on the cheap while you focus on spiritual renewal.

The Ubud spirituality scene is led by Westerners, not Balinese. Most high-profile operations (resorts, central restaurants, high profile yoga centers) run on Western capital. Most yoga teachers, counsellors, druids, seers, healers and goddesses are also Westerners.

This came as a surprise to me, because the Balinese are deeply religious. Agama Hindu Dharma, the island’s brand of Hinduism, is pervasive in everyday life. There are little shrines in every home, workplace and street corner, and they are all cared for every day, with small offerings of wildflowers and incense. There are also many famous temples, all with a dense calendar of ceremonies, dances, and so on. So, the Balinese have what the spirituality crowd claims to be seeking: a constant sense of the divine in their life.

And yet, spiritual interaction appears to be minimal. No hipsters join the locals at the temples; you do not see Caucasian features among the women bringing offerings to shrines. Conversely, it seems very few Balinese have decided to start a career as spiritual healers or river goddesses.

I don’t know why this happens. Maybe it’s about information: the spirituality scene markets itself (in English), whereas Agama Hindu Dharma does not. Maybe the Balinese are too invested in their religion to be comfortable with the rituals of modern-day spirituality. I suspect that the market for spirituality is a classic Market for Lemons: there is no way to say if Portal Opening is going to do it for you until you try. Worse, even after you have tried it it is hard to tell if you have actually experienced cosmic harmony. After all, most people have no experience of the real thing (if it exists). Under market pressure to cheapen the experience, the more serious swamis give up on the hapless Westerners, and are driven away from the market. Only lemons remain.  We will never know – there are no data.

But, whatever the reasons, Western dominance in Ubud’s staple service bring instability to the system. Balinese are relegated to humbler mansions: they clean your your room and wait at your table. Most of your money will go to the owner of your hotel and your guru of choice – both Westerners. For margaritas to stay cheap, their salaries cannot grow all that fast: if your server earns as much as you, long stays become unaffordable. So, I predict the increased inflow of income tourism in Ubud will not increase the salaries of service staff by much.

So, where will the money go? Probably into real estate values. Already now, according to our Balinese friends,  landlords demand five years of rents in advance when renting space on Ubud’s main street.  No local entrepreneur can access that much capital, they added. The only companies operating there are Western-owned.

So, the Ubud economy seems to be moving on an unhealthy trajectory. Most of the money generated by producing its staple service ends up with foreign companies, foreign gurus and local landlords. Service salaries for local workers need to stay low for the margaritas and the massages to stay cheap, securing the middle-class clientele. The Balinese are a gentle people, but if this go too far  social tensions might ensue.

All in all, a fun place to visit, and a beautiful culture. But not a place I want to live in long-term.

Photo credit: Wikimedia