A “startup” is a micro-company founded only recently. Many base their business on a creative, fresh and new idea or product. The best become mature companies or, in the case of an acquisition, part of a larger group. More and more success stories are started in Budapest.
The YouTube videos “Startups in Budapest”, in English, present foreign decision makers who chose the Hungarian capital as their “place of birth” and company base. They all have in common that they value the architecture, culture and entertainment, the cosmopolitan flair and the well-educated Hungarian workforce.
Mark Webster, who comes from the UK and is the general manager of Higher Click Kft., a digital marketing company, came to Hungary four years ago with no more than a backpack and tried his luck.
After founding his business as a one-man company it started to improve slowly, and in 2013 he had 25 full-time employees and 50 freelancers. He is enthusiastic about the “Paris of the East” with its good weather and fast internet connection. As a businessman he was attracted by the relatively good prices. “You can rent a huge office in the city centre here for a very good price,” Webster said. “The prices are not comparable with Western Europe or the USA.” The wages are also significantly lower, despite the good education of the Hungarians.
Elnar Hajijev, Technical Leader of software company Realeyes, lays emphasis on the intellectual skills of Hungarians as well, and sees them as some of the most intelligent people in the world. “The good mathematical background makes Budapest popular for high-tech companies,” he said. “There are many Hungarian schools with excellent mathematics and physics education, and many Hungarian Nobel Prize winners in these areas.” In addition, the Central European location was ideal; you could reach any part of the continent within two hours.
The founder and leader of shopping website Kupon Világ, Shehryar Pirache, moved here in 2010 because of love and the economic possibilities. Eastern Europe was a promising market for the coupon business at that time. Three years after the startup he already has 25 full-time employees and has sold over 700,000 coupons, through which he says he has saved his clients over HUF 6.5 billion.
“When the business models arrived here from Germany and the USA, there were many young entrepreneurs who finished the university and founded a startup,” Pirache said. “Budapest is becoming more and more a hub for this kind of enterprising culture.”
The state also gives a lot of support to recently established companies. This April the Ministry of National Economy, the National Innovation Authority, Design Terminal, the BudapestHUB Workgroup as well as a number of domestic professional associations and foreign enterprises got together to launch “Startup Spring”. These events include not only conferences and presentations but also award ceremonies and networking possibilities.
State Secretary Zoltán Cséfalvay said at the announcement of the “Central European Startup of the Year” competition for 2014 that there will be another legislation package coming before Parliament this autumn to lighten the administrative and taxation duties of startups and their owners. The package would be based on suggestions from the BudapestHUB-workgroup, which is composed of representatives of domestic startups and experts from the Ministry of National Economy.
Given the increasing number of startups, especially in mobile application development, Cséfalvay spoke of a “revolution that is happening right before our eyes”. The constantly growing application development business is the “best business of the decade” thanks to the steadily growing turnover. Endre Spaller, president of the National Authority of Innovation, said he aims to make Budapest the startup centre of the whole region; somewhere that will start as a technological incubator and a mentoring program as well, and will mediate between the young companies.
Some startups from Budapest have already gained world-wide recognition, such as software company Prezi, LogMeIn and Ustream. We will soon present these and some other successful Hungarian companies to you.