Estonia isn’t a right place to start an IT business nowadays

October 2011 I was back in Barcelona after France, grossing Toulouse and Andorra this time. So my concerns where to chase some “customers” to whom I did Link Building campaigns and never got paid; and to figure out some other web based tasks to earn enough to buy a used MacBook to write down my iPhone app ideas.
Then shit happened. Some idiots didn’t like me to drink wine alone in the park, beat me up, broke my glasses and robbed my back-bag. As it contained my passport, enough clothing for winter time, etc. I didn’t figured anything else out than starting to walk towards Estonia. Thanks to friendly drivers, I was again in Tartu (where I left April 2004) within two weeks and had enough money for the trip as well.
Next step was local social services for new glasses and ID card. As I had to stay now in Estonia for the full winter, I had to rent small flat which social services could pay and register myself as unemployed person there.
Estonian allowance should be around 76 EUR’s per month but I never got this amount. As the costs living in that small room where over the limits, they deducted it from my allowance so I usually got 40-50 EUR’s per month for living. That’s not much a money there. Even the red wine (my life essential) costs something 3.50 and you cant much find tobacco in the streets there like it was in Barcelona.
Anyway, as Estonia has been offering grants for unemployed persons to start a business long time, I assumed that I could use now this one to get myself a computer and start to write iPhone apps, including to produce some media ideas to iTunes market as well.
First I assumed, that bureaucratic issues for the process could be solved within month-two period but to my surprise, I had to prove that they do not have any suitable jobs for me for several months to be consider even to the process. Actually , there wasn’t much jobs for male without a driving license at all and the recently raised minimum salary was only 1.60 per hour, while my room rent bills where near 200 EUR per month so you cant even pay for the rent from your income.
With a computer and Internet, I could have had chance to do some freelance work and invoice British Businesses for 10 pounds per hour instead applying for jobs that I never will have a chance to get.
So, after a frustrating cold winter, where I had nothing else to do than read most of the heavy books from local library and listen radio in my room, the answer to my business proposal becomes in April.
And it was shocking.
First they are considering businesses that doesn’t have balance sheet liabilities, no employment contracts and running costs are practically non-existing to be too risky!!!
Then they accuse me that I cant even nominate five competitors! If somebody have already written an mobile app for some specific idea, why should I start to write it again?
Then the decision makers cant even read there. I presented exactly in my business plan what kind of products on what prices I start to sell, what kind of marketing Apple AppStore and iTunes are providing and how I can build and integrate online marketing strategies to my applications. That’s the beauty that I have loved since Internet: I do not have any need for big marketing budgets anymore. Just an unique, innovative idea which people will find useful counts. So take it to your brain: I do not need a big marketing budget to get any of my innovative idea to the market because I know enough persons willing to introduce those to their followers.
To be honest, their templates for cash flow calculations where very interesting. They count 12 months sales by summing up all twelve months price columns and then multiplying it by twelve month sales figures. No wonder, starting entrepreneurs expectations are much higher than their business actually makes.
And finally, there was data from recent mobile market NetSize report data included in my business plan. It showed exactly how many iPhones are in particular countries. Maybe because Estonia was left out from this report, they didn’t considered it as non-viable macroeconomic information or what they would have expected in Macroeconomic Analysis column? I never mentioned in my business plan that I will start to sell my applications to Estonian iPhone market and Estonians still cannot download media from iTunes anyway.
In the situation where nearly 50% of those getting business startup grant never start a business and over 75% will close down their businesses within a year, I had an history running successful Estonian IT company over 10 years. But this seems to be not counting anymore in Estonia as this country has taken over by idiotic decision makers, corruption and arrogance leaded by some ministers and especially current prime minister.
And the most important issue. Estonian income tax for freelancers is 21% and now they have changed that freelancers doesn’t pay social taxes from minimum salary like it was before, they pay 33% like employers once did. So it makes over 50% of my income to pay for this government bureaucracy, which means that getting a partner to share my income 50% to do the work offshore will be much viable option for me.
Before I left for stress treatment in Helsinki, Finland I filed that decision to Estonian court. Maybe I could get some decent answer after a year of court proceedings but I cannot count on that. So, be back soon to my usual hitchhiking round trips between Paris and Barcelona until I will sort out the computer and small sailing boat in Mediterranean sea.