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Experience from Building Skype – a Global Company from Europe

Transcript of my speech at the The First Two Years of EU Membership conference in Budapest, as kindly typed up by the organizers.


My name is Sten Tamkivi, and I am representing Skype. As I prefer two-way discussions to one-way speeches, I will try to be quick. I guess I was invited to speak at this conference mainly because our company is very young – just three years of Skype’s existence –, and secondly because it is very European by its roots. Just to give you a short introduction: we are headquartered in Luxembourg, but our largest office is in Tallinn, Estonia, where I actually come from. Our second largest office is in London, and there are other smaller entities in various countries in the world. We are a quickly and enormously growing company.

Somebody just told me before that he thought Skype is a US-based company because it does good software and business on the Internet. It is specifically worrying for the future of Europe that this sort of a default preconception exists.

We have grown from five people to 500 people in several years as far as the company size is concerned, but what has been even more exciting is the fact that we have grown from zero to 136 million users worldwide, and if we are riding the current pace in getting new users that means approximately one Tallinn in two days. It is more than a quarter million people signing up every single day.

I think it is very interesting trying to maintain this kind of company in Europe. First of all, Europe definitely has its benefits, for example, the fact that we are working in a diverse environment where we have small nations and a lot of different languages, has helped us a lot. If we look at, for example, our US competition then the usual US piece of software has an English version, a Spanish version for the Spanish community in the US, later on a German and a French version, and maybe a Chinese version long down the road. Skype has been released in 27 languages and about 80% of our users we have globally are using a non-English version; and this is a very natural thing for us coming from Europe. We have also tried to keep our organisation a very multi-cultural one, in the Tallinn office alone we have today about 270 people coming from 33 nationalities. It is really exciting to work with a guy coming from the Dominican Republic, Latvia, Portugal or Japan next to you.

At the same time, this has opened us to different challenges. Now being inside the EU we can witness the so called free movement of people, which is not always that easy as it might be. After the accession, for many people in our offices movement inside the EU became easier, but even these days occasionally we cannot get visa for a guy in our London office, even if it is an EU country. That guy happens to have an Indian passport even though he has lived in London for five years. So, there are certainly hitches and glitches that still need to be fixed.

Another part of the EU frameworks that I wanted to mention is the bureaucratic red tape round setting up an entity and operating it. As Estonia is a very small country, we are physically running out of people, there are practically no more people we can hire after we grow up to maybe 350 people. To be ready for that moment, which is likely to happen next year, we have announced just this week that we are opening up a development centre in Prague. You cannot imagine how different nuisances of setting identity up can be in doing the same thing in Tallinn, in Luxembourg, in London or in Stockholm, so I really think there is still quite a lot of work to do on the harmonisation of this part. You can see countries with very different positions on the ease of doing business top list, and I think the chance for Europe on the global arena would be that all these countries were leading that global list. I know that, for example, in January Estonia plans to introduce the procedure that you can establish companies over the Internet. So, I would love to see the day when I sit in my office in Tallinn and I am able to establish a company over the Internet in all the EU countries if I wished to. This, of course, remains to be seen.

Skype lets people talk for free over the Internet when both parties have Skype client. We also have paid services that are related to calling the regular phones in countries or receiving phone calls from regular or mobile phones to your Skype client in your computer. Skype is not a telecommunication company, but because we offer services that are linking us with telecoms, we also touch base with different telecom regulations, and this is an amazing world inside the EU, as well. In some countries you have to have a physical address to have a phone number these days. I have my Skype client here and the address of this phone number is the Parliament building in Budapest this morning, but this evening it is going to be Tallinn, Estonia. So, there are things in this regulation that have to adapt to the changing world and naturally the fastest part of the changing world tends to be the IT and the telecom industries, so that is important.

When looking at the different new member states after the accession, some of the changes have not been that big because there were changes happening already before the accession. I would say that life at Skype has not changed significantly inside due to this accession moment. The process has started before, and it is gradually improving. Just to give you an example: occasionally I get calls from my friends who are working for Estonian banks. They ask me how Skype is doing with Estonia taking euro into use. And I start thinking that we will never have any traditional issues because we are euro-based in our internal systems from the very beginning. And being such a young company we do not have that legacy to kroon, and this is certainly a benefit.

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