Dan Michaeli: “I believe it is crucial to understand that ‘startup’ is just a phase. It’s a temporary stage when an organization is searching for its business model.”

Dan is the CEO and Co-Founder of Glia – a digital customer service platform that allows businesses to interact with their customers via messaging, voice, video, or even CoBrowsing. Glia has offices in Tartu, Tallinn, and New York City.
This interview was written by Anette Tiitus, member of the sTARTUp Day Marketing & PR team.

When was the last time you visited Estonia? What do you think of Estonia in general?

[Dan and Justin DiPietro, co-founder and COO, were in Estonia during our interview.]

The last time I was in Estonia was about two years ago. Over the years, I’ve been here close to fifty times. The last time was pre-pandemic, so it feels amazing to be back. I am a great admirer of Estonia — ever since we started building the company here.

Estonia as a country feels like it’s leapfrogging other countries. It is fascinating how easy it is for our business here: immigration is encouraged and bureaucracy is limited. Even though I’m sure Estonians may feel that there is more to be done — they’re a very driven and focused group of people.
It is phenomenal to see how collaborative the government is, specifically with the private sector, with technology, and how immigration is encouraged.
I have also been consistently impressed with the caliber of people that we have come across in Estonia — incredibly bright, hard-working, and honest professionals. There is a real collaboration in the community. People help each other and are welcoming. Everybody wants to see the startup and tech community succeed.

Although Glia was founded in New York City, why did you decide to invest in building a big part of the team in Estonia?

It has been about ten years since we started Glia and at the time Carlos [Paniagua, Co-Founder and CTO] was finishing his master's program at the University of Tartu. He spoke very highly of Estonia and the opportunity here. When we started building out the company and hiring, it became clear that the opportunity to invest in Estonia will pay off in the future.

Around the time we began building the team in Estonia — 2013 — the startup community really started growing. That’s when Garage48 began and meetups were happening — we saw the early days of the startup community coming together. As time went on, we realized how well Estonia is set up, in terms of the business environment, simple immigration processes, and low bureaucracy. We keep investing in Estonia because it is clear that it’s a great place to do business.

What are the main differences between the startup ecosystem of Estonia and the USA?

The concentration of tech entrepreneurship is much higher in Estonia. If you look at the entire country, there is awareness of this type of industry at the national level. In the United States there is more access to capital. In my opinion, that is improving in Estonia. There are prominent Estonian companies that are going public, which comes back as investments back into the ecosystem. There are more opportunities on the radar of large corporations as well. I believe that more and more capital is flowing into Estonia, which is great.

Name three crucial factors that help a startup ecosystem be sustainable.

I would say that the crucial components of having a sustainable ecosystem are: talent, capital, and community.

Talented individuals are qualified to take a variety of different positions within the technology ecosystem. Development or business functions are crucial to fill for a variety of tech companies. Secondly, one needs capital to grow a business. Companies need the right pace because it is a high-growth market. That means you want to make sure that you have the capital to optimize for growth. Finally, community is the additional support of other peers. That component enables knowledge to be shared amongst different people doing similar things.

What are the three most important factors needed for the ecosystem to generate concrete results?

If you look at the successes that exist outside of Estonia’s ecosystem, you see the focus on moving beyond thinking like a startup. That requires education, including mentorship, to promote scaleups as much as startups.

For concrete results, there is a need to focus on the business model. That’s achieved through education and promotion for scaleups, not just startups. Focusing on a viable business model is key. Making sure that there is an understanding in the ecosystem that you are here to build a business — not just to feel cool playing with tech and wearing shorts to the office. In the end, a startup is about building a business.

I believe it is crucial to understand that “startup” is just a phase. It is a temporary stage when an organization is searching for its business model. Once you find the model, you no longer should call it a startup — except for branding purposes. As a scaleup, you are a mature organization. To see the concrete results from an ecosystem, you need to promote the mentality of “startup” as a stage. To keep pushing the progress from startup to scaleup.

At this point, Glia is in the top ten in terms of money raised by Estonian companies. We believe that we are a tech scaleup. In addition, Glia has an equal footprint in the United States and Estonia. We have a large team in both countries. We have prioritized business outcomes — created a sustainable business with high-growth quality revenue for many years. And we are doing this globally with a special focus on the US market.

What are the shortcomings in Estonia’s entrepreneurial ecosystem?

I believe there is always room to improve immigration — although it’s more of a minor improvement to make than a problem to fix here. We are pro bringing talent to the country and I am super impressed with Estonia's immigration program. I think it’s wonderful that Estonia has tried to make it easier for companies to do that.

A more significant aspect to focus on is integration. It is crucial to better integrate entrepreneurs who come to Estonia into society. I think that there could be a program to educate immigrants on how to be culturally Estonian.
It is also crucial to have these programs run by people who have a true passion for Estonian culture because it has a lot to offer.
Unfortunately, currently there isn’t a way for them to tap into that as effortlessly. Focusing on the integration of immigrants and people joining the community could go a long way — for the newcomers and the promotion of the startup community to Estonians.

What is the most important value created by startups for the Estonian economy?

I believe the startup scene pushes the Estonian government to think ahead — for the best ways to position the country for success in the new economy. Globally, we have entered a new era where technology is going to play a significant role. To look forward, you need to understand the role technology plays in global economies. In this way the Estonian startup scene pushes the government to create systems that set up the country for future success. They are pushing the country and the government forward.

The foundation is now set for Estonia to have an amazing future. All the pieces of the puzzle are there. The only step left is to actually put the puzzle pieces together. I believe that there are going to be wonderful times ahead for Estonia.

Glia is a partner of sTARTUp Day 2021. If you want to hear about the true value of a diverse company, come and hear Carlos Paniagua, the Co-Founder and CTO of Glia on August 27 at sTARTUp Day!

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