Marius Arras, the CEO of Indilo talks about a multimedia e-book publishing tool, currently under intensive development, that would enable anyone to publish his or her materials (books, notes) as e-books in a sexy multimedia-rich way and start earning money through purchases from the AppStore.

The „do-it-yourself“ process of publishing e-books via Indilo’s new tool will be simple: enter your manuscript, add videos, audio files or pictures, preview the whole thing, set the price for your e-book and publish it. Of course, at some point you will have to pay Indilo around 100 USD and they will charge a certain percentage from sales.

Arras says that Indilo is entering e-publishing business beside regular app development for three reasons. Firstly, because e-books are already most sold item category in AppStore. Secondly, because estimates show the sales of iPad multimedia tablets skyrocketing over few years. And thirdly, Amazon has announced that people already buy more e-books than paper books.

„If you have purchased a device like iPad and you like reading e-books, you would propably prefer the ones that give you multimedia-rich reading experience,“ Arras explains. „The problem currently is that there is no service, that would enable any self-publishing author or small publishing house to create stand-alone multimedia-rich e-books and publish them in AppStore.“

Whom would this be targeted? Cooks for example. There are no easier way to publish e-cookbooks with nice pictures and videos than this. Question is whether people are willing to buy this book.

I have also spoken with Yrjö Ojasaar, one of the investors behind Indilo. He has expressed his blithesome happiness about the profitability of Indilo. Estonians have truly gone mad for Apple.

„Are you ready to help build a technology that has the power to change the way people communicate?“ the company asks in their Estonian job ads. „We are dedicated to building a world-class team to create the next wave of innovative mobile services.“

Isabelle Dumont, Product and Corporate Marketing Director of Seven Networks tells me that the company will open a new office in Tallinn to support its worldwide growth and plans to enter aggressively into new product areas that tackle some of the most challenging problems faced by the telecom industry today. Seven, she says, is a profitable business and continues to expand globally.

“We have secured several new global customers over the past 12 months, including Samsung Mobile,” Dumont explains. According to her, the focus of the Estonia office will be R&D and it will be staffed primarily with development engineers and related supporting infrastructure.

New location was selected based on its proximity to the Seven office in Helsinki, Finland. No wonder the Estonian business registry shows that Seven Networks Estonia is lead by a Finn Petri Tapani Tuura.

But the reputation of Estonian tech sector also seems to play a role.

“Estonia, one of the smallest new European Union member states has established itself as one of the fastest-expanding economies of the EU. The proximity to the Nordic countries, well-known for their technological and telecommunication innovations, has had a positive effect on Estonia, bringing the country among the most advanced in Europe in terms of telecommunications infrastructure,” Dumont praises us.

What else we would need to know about Seven, besides the fact that its headquarters is located in California? Maybe that even though it has a global reach – products in production around the world in 14 languages and 70 countries, running on more than 550 device models across six operating platforms – it only has four R&D centers, one in Redwood City (US), one in Hangzhou (China), one in Helsinki (Finland) and now … in Estonia!

I tried to look for the financial results of Seven, but that wasn’t very easy task.  How big is the company in terms of revenue and how profitable it is?

But now, four years later, there’s a depressing dispute between Laufer and Playtech. Martin Leiger from Playtech Estonia’s public relations refuses to comment what is it about, referring that there’s a trial ongoing in Estonian court. One thing, however, is certain: the issue will not improve Playtech’s reputation.  

Boaz argues that he was fired from Playtech unfairly, due to one of his tasks – he was working on a Playtech’s Intranet project, but it failed and according to Laufer, Playtech managers thought he was to blame for this. But he objects having done anything wrong.  

But it turns out that Laufer hasn’t been exactly a blue-eyed boy himself. A well-known Estonian white hat hacker Tõnu Samuel „discovered“ the Israeli few weeks ago. Samuel has dedicated a blogpost to him, writing that the former Playtech employee has spread spam shamelessly over the web in different weblog commentariums, including Samuel’s.

Laufer has established many websites related to online gambling – for example tomatocasino.com (printscreen below), smsslot.com and others – and is desperatrely looking for ways to promote these. „It’s a monkey-business, he earns 100 dollars from here, 100 from there…“ Samuel quesses.

Boaz’s LinkedIn profile confirms his connections with the related gambling websites. Question is whether his online gambling activities have anything to do with the dispute with Playtech and if he ran his own business already when working for the company?

Laufer has responded to Samuel’s accusations furiously. He claims that he owns many internet sites, but his internet marketing company Human Sapiens has nothing to do with spamming. “I build traffic into my sites using legitimate marketing ways,” he wrote in a comment to Samuel’s post. Samuel says that Laufer has even considered suing him for slander, but hasn’t taken any actions yet and will probably reconsider, “like the spammers usually do!”

Boaz confirmed me over a phonecall that he is not a spammer and that he considers moving its business to Latvia, where people are assumingly friendlier. But I guess the question „who do you believe?“ would sound a bit awkward here.

Few weeks ago two well-known Estonian startuppers, Jüri Kaljundi and Andrus Purde launched Emp.ly – a new social media startup, making staffing a lot easier and fun.

Emp.ly helps companies to spread their job ads over the social web (through friends, fans and followers) with ease. It is more likely to find workers this way, than just using regular classified’s. For people in social web: the more they spread these job ads among their friends, the bigger their chance to get rewarded with Amazon giftcards.

The service is meant for smaller and medium size companies, who have no budgets to carry out massive recruitment campaigns. Remarkable about Emp.ly is that Purde and Kaljundi launched the service in Silicon Valley, believing that there is no better place in the world to attract users and find partners.

Emp.ly also has a „sister application“ called Talentag. If your friend is the best salesman, designer, programmer, visionary or just an inspiring and helpful individual – you can tag him in Facebook accordingly. 

Talentag is the way of making „virtual compliments“, showing how respectful and professional people, who happened to be tagged, are. The custom tags are good-looking and colorful, there are tens of them made already. But Talentag also gathers ideas of new tags.

Andrus Purde is not yet willing to talk about user numbers, since they are very modest. Moreover, he underlines that both services – Emp.ly, as well as Talentag are currently under some heavy development.

The beginning looks promising. But one might have doubts if these, a bit „nice to have“ tools would make a lot of money for their founders. What do you think?

Their aim is to establish a new social network, much like Facebook, but lot more private, crap-free (without the FarmVille and who’s your friend’s friend reminders and all the other annoying things) and easier to use.

Martinson says that 95 percent of all the communication currently takes place in smaller groups: among family, collegues, friends, hobby groups, training mates etc. Facebook is extremely popular, with hundreds of millions of users (over 200 000 in Estonia already), it has a plentitude of functionality, but Facebook is not the best communication tool for smaller groups. 

„Facebook has lists and groups, but they are inconvenient to use. Everyone is your „friend“, irrespective of how they became your fiends,“ Martinson says.

In the new soon-to-be revealed environment of Inner Circle, currently in rough beta phase, the users will be able to switch in between different groups with ease, share content, information,  multimedia – in other words do all the modern social communication things – separately in each of their group. 

Head of the project, Andrus Raudsalu calls it „the private Facebook“ and says it will be useable over different communication platforms: the web, e-mail, SMS, mobile etc. He considers mailing lists and groups as the main competitors.

Social networks serving small groups are becoming more and more trendy these days. About ten projects worldwide are currently in development, but non of them has yet clearly taken the lead.

Perhaps at some point in Autumn, when the project will be launched, Inner Circle is planning to target US market and other English-speaking markets. Revenues have to come from advertising and freemium group-services.

Martinson and Raudsalu expect to see hundreds of thousands of groups established in their environment by the end of 2011.  If the target is not met, feasibility comes under question.

In August Martinson and his partners will raise around 200 000 euros seed capital for their new ambitious project.

The interview was dedicated to the recent 7 Million EUR investment that the company received from Polish venture capital firm Enterprise Investors. Here’s a choice of more interesting thoughts from Alamäe in a nutshell.  

Webmedia is doing outrageous work, carrying out complex and even sensitive projects in countries such as Qatar and Palestine. No other Estonian IT company has ever done anything similar. For example Webmedia has established the main e-government gateway for Qatar.

Though Webmedia calls itself worker-friendly company, educating its staff and being supportive on its workers spending time with their families, the company is not management friendly. Over the past 3-4 months, Alamäe has spent only two weekends with his family. 

Webmedia has development teams in Romania and Serbia, because Rumanians and Serbians are good-quality and flexible workforce.

Webmedia is active in regions like Middle-East, Asia and Africa. But the company keeps away from public procurements, where finances come from state budgets. Instead it is targeting orders financed by aid programs or the World Bank, since they are a lot more transparent. 

Webmedia has nationals from 15 different countries in staff. Among others Egyptians, Palestinian, Italian, Taiwanese. For the finest experts the company is paying over 5000 EUR a month (netto). Alamäe is convinced that there are no significant income differences between Estonian and Scandinavian top experts. 

Estonian are good in working out solutions (Estonian engineers are behind Skype, as we know) but we are very poor salesmen. Even Skype and Playtech – our leading IT sector companies – have their marketing outside Estonia. We have to find the right people, who would sell our products worldwide, because it would take generations for us to study this art.

Estonian IT sector has a lot to sell. Technologies enabling digital signature, mobile identification, our ID card system and even e-banking to some extent – Estonians are already used to all this and sometimes even grouch about it, but to many foreigners all this is unbelievable and absolutely incredible.

But that doesn’t mean we could call the Estonian e-government services perfect. Alamäe recently gave some friendly advice to the IT minister of Qatar not to focus on e-government, but to m-government. Internet penetration in Qatar is only about 15%, but everyone has smartphone.

Believe it or not, but there’s no corruption in Estonian IT sector. You do not have to bribe the officials to receive orders. Situation is much of the similar in Qatar, the only difference there is that you have to convince locals that you are better and more efficient than your competitors from Bangalore.

Estonian vision for 2030 should be to outperform Singapore. Our foreign policy should shift to foreign economic policy. So that when we provide civil or military support, we have to consider how this benefits our companies. US is pretty good at this.

Photo: Tiit Blaat/Eesti Ekspress

Estonian Development Fund was established few years ago. Benchmarking the Finnish SITRA model its main functions are providing economic forecast and ideas how to create growth, but also developing venture capital market in Estonia.

The fund has invested into seven companies thus far: SmartPost (a logistics company offering modern parcel sending solutions), Golitah Wind (developing next generation wind turbine), Massi Miliano (the virtual fitting room developer Fits.me), United Dogs and Cats (social network for pet owners, has failed for good recently), BiotaP (a biotech company) and GrabCAD (a CAD library provider).

Nevertheless, skeptics say the portfolio is weak and insufficient to justify the fund’s existence. Before the Estonian Development Fund started off many people thought we do not really need an extra state VC. Now these people say that the new exceptional investment round, that we are going to see, is giving the fund “a mandate for existence”, because once you already invest, you apparently have to work with the companies.

Heidi Kakko (pictured) and Andrus Oks, the investment people from Estonian Development Fund disagree with this standpoint, of course. And many people think efforts of the fund have been very valuable. It is always easier to criticize and believe me, Estonians are world champions on this.

One of the fund’s investments – United Dogs and Cats – has failed recently. Now the fund is looking for a new investor to take the company over. Two candidates are currently being heavily negotiated with. I think I know one of them (a foreign businessman living and working in Estonia), but I will not say it, because I do not want to blow this thing off.

Testonica Lab is a hardcore technology spin-off of Tallinn University of Technology. The company has managed to build symbiotic friendship with Ericsson the giant, hence really taken off with its business.

In a nutshell Testonica develops both hardware and software for Ericsson and other customers, so that they could use it for more efficient quality-check in process of manufacturing microchips or motherboards.

“Our technology is actually suitable for any area of electronics, from telephones to space rockets,” says Artur Jurman, CEO of the company.

Social Fox Media people call the company social media agency, that helps other companies to orient (or perhaps reorient) in increasingly relevant social media sphere, commercial superworld of Facebook, Twitter and others.

It turns out that among Estonian economy superstars only few (for example Baltika, Estonian Air and Estravel) have taken Facebook and Twitter seriously and found ways to earn through these channels. Others still live in 90′s.

To a large extent the team of Social Fox is formed by former team members of United Dogs and Cats, led by Ragnar Sass and his sister Elise Sass.

Cherry Media - Americans have Groupon.com, Estonians have Cherry.ee. Slightly different, but much of the same. Exclusive and fresh „Offers of The Day“ from restaurants, spaas or entertainment companies, discounts up to 60-70 percent, over 11 000 Facebook fans after only about three months of operation. Not mentioning a comfortable and risk-free advertising platform for companies. If Cherry doesn’t find any clients, they are not paid as well. Wonderful!

Ironcurtain Entertainment - start-up with a funny name aims to help laying the foundation of Estonia’s game developing industry. Turns out that the turnover of Estonian game developers is close to zero at the moment. But now there’s a company developing the first strategy game for web browser – Utopia Revolution.

According to the latest from Utopia Revolution’s Facebook page alpha version of the game is already up and running. The official grand launch is set for Autumn 2010.

In this game with minimal graphics teams of up to 25 fight against each other in ancient times. Each team member has his own Province to take care of. Provinces make Kingdoms that battle against each other. One of the authors behind Utopia Revolution, Rait Ojasaar calls it “a modern chess.”

CEO of the company, formerly on Webmedia payroll, Siim Puskai disapproves the current status quo with popular games such as Facebook’s FarmVille. “They have gone too much into sucking money from players. If a game is really good, people are willing to spend money on it naturally,” he says.

CuteFund is a fresh venture from the Founder of Rate.ee and Estonian social media guru Andrei Korobeinik. After selling Rate to EMT, Korobeinik started investing money into stocks. But he quickly realized that entrusting his money to some fund managers from Swedbank is not very wise nor exciting. He established CuteFund, an investment fund without a fund manager, where investments are run by a program and activists (investors) together with Wall Street guys are lined up based on the accuracy of their forecasts. If you are a smart investor and your buy/sell/hold decisions turn out to be wise, you will have a bigger change to influence portfolio decisions than a rookie-investor or just a silly one. 

Already more than 800 people have joined CuteFund, but they will not yet be able to invest their money there, nor influence portfolio decisions. Hopefully soon they can, but not yet.

Korobeinik says that compared to conventional investment funds CuteFund is more transparent and flexible. It is for  those who are not satisfied with the banks or other asset management firms.

HumanIPO is an Estonian start-up established by a Danish businessman Kresten Buch. It is a social media tool in essence, aiming to promote entrepreneurship. HumanIPO helps to get the business going, from ideas and business plan to funding issues. mentoring , communication and vooperation between companies, consultants and investors. Relevant people form teams and work on a business plan online through HumanIPO. 

For Buch it is crystal clear: “We promote business, because it is a source of wealth for the society.”

Which ones from these start-ups you think will fly and why?

According to Asko Seeba (pictured), the man behind this, it is supposed to be the simplest free service you can use to gather anonymous, honest and sincere feedback about you from your friends, colleagues and other people.  Do they like you or not, and why?  

Only if you care what people think about you

Anyone searching for an answer to a question “what do people think of me?” can use Sayat.me service that is free of charge. People who have blog or homepage, can also use the sayat.me widget instead of URL (to have the feedback entry right on their page).

If you don’t care what people think about you, don’t use it!

“It has both pragmatic and the fun value,” Seeba says. “On the pragmatic side, it helps you point your attention to things that people would not tell you, if not being anonymous. In the end, you can basically use it to get ideas to improve yourself, test your personal brand, or just out of curiousity. Getting feedback on what you do is also very much fun – getting positive feedback on things people adore about you gives you motivational boost to move on.”

Working service built in few days

Remember what Ragnar Sass told us in one of my previous blogposts about creating rough beta IT services in just 24 or 48 hours. Seeba got the idea of Sayat just few weeks ago. “I called right to a friend who does both design and coding. He created the first graphical mock on that same night and did the code on the weekend. In total, he spent around 8 hours on this. By mid next week, the site went live,” Seeba says.

You can read more about such ”excersices” from Seeba’s blog. 

This is really a low cost thing. Only few bucks were taken away for registering the domain. No additional cash has been spent on either engineering salaries, advertizing or anything.

How to earn money with this?

That’s neet, but does Seeba also see any opportunities how to monetize this? Yes he does!

Seeba: “There is no revenue on the site yet. However, besides the rapid launch the sayat.me idea was inspired also by the potential things that the market might be willing to pay for. For example, I have seen big companies dumping piles of cash to consultants to arrange anonymous surveys on what their employees think about their management. Majority of those expenses could be unnecessary.”

They formed the club Garage48 and took events like Startup Weekend or 24 hour bit-camp as benchmarks. And now they plan to organise a series of events, where new services are created in just couple of days. The opening event will take place on April 16-18 in Tallinn and Ragnar Sass, the founder of United Dogs & Cats is talking about this in the video.

Some of the Estonian examples of 48-hour IT services include: 

Registration for the opening event is still open!