Each Hungarian idea and talent matters!
It has been 3 years since Startup Campus started to support startups from a very early phase of the idea until entering the market. In the market of venture capital funds they support business growth not only from the financing side, but they also provide a variety of services relating to education, incubation, foreign market entry and investment, through their team of professionals and partner network. We talked with Zsolt Kovács, CEO of the organization.
A few years ago it was difficult even to get admission into startup competitions, and the investors still had to be convinced that your idea was the most promising opportunity.
By now there are so many resources, capital funds and incubators that those having a good idea and team will manage to start for sure. There is little chance that a better period can come than the present one and the next 1-2 years.
Apart from incubation, Startup Campus is also present in universities and in the international scene. How did you start?
Three years ago we saw that in higher education there was a great need for practical knowledge, inspiring university students to launch innovative enterprises. Our first activity was associated with ”Get in the Ring” startup competition, where the participants tried to convince the investors to provide them with resources in a box ring.
We brought these events to higher education. E.g. in 2015 it was organized in Corvinus University and Startup Campus was launched from this initial phase. We ran a university roadshow supported by the National Research, Development and Innovation Office of Hungary, initiated a series of workshops on entrepreneurship for Hungarian undergraduate students from Debrecen to London, and through our education programs several starting enterprises received venture capital investment.
Which is the strongest pillar of the organization?
By now the structure of Startup Campus University has grown very mature and outstanding on an international level, as well. We co-operate with several universities and we have also invited the venture capital fund managing entity, Hiventures. In the frameworks of this program, large enterprises bring in innovation challenges, and we provide the education and organization.
We have built up a supporting environment with talented young people in the centre, where no talented ideas can be lost because we add market validation, large enterprise partner, expertise and capital to them.
This is the most essential value of our university program, which we would like to make available for more and more young people in Hungary and in the region in the coming years. Last year our education program was widened with Startup Campus High School roadshow, in which also the National Research, Development and Innovation Office of Hungary joined this autumn. In the frameworks of the series of interactive lectures we introduce the world of startups to 14-18 year-old students, inspiring them to launch their own entrepreneurship later on. This is an outstanding part of building up an ecosystem, because even if there are lots of resources available for startups,
if we don’t pay attention to generate projects and support talents, in 1-2 years we’re going to run out of innovative ideas.
We consider it our mission to build up a network for gathering ideas and talents assisting domestic incubators, large enterprises and venture capital investors to meet as much good projects as possible.
In the course of your programs you have met several hundreds of projects. What do you look at first when meeting a new one?
In this initial phase the starting point is always the team. We are waiting for applicants with an elaborated idea and/or prototype. After the selection process we assist with the international validation of the projects, the market entry and the opportunity for a next phase of investments with experienced professionals.
Startup Campus Incubator is looking for those innovative enterprises and talents, who have perspective for the future, and dare to think beyond the domestic market.
How many companies do you support for the moment?
Until now we have invested in 10% of the projects submitted, meaning 21 companies. Among them there is TrustChain, which is one of the best examples for the results a good team can achieve. The idea made up at the very beginning is usually subject to many changes, but this is how it works. We need to consider the feedbacks from the market and clients, as well. This is a good incubator-startup co-operation, representing exactly what our role is:
to find teams with a very high risk-ranking, which we can educate and support with our services. What needs to be emphasized that we primarily focus not on financing but on the network and on the additional mentoring.
Insimu is a university team, who managed to find a British investor through our program in London, who helps to make them visible in the map for international investors. This is exactly why these incubators are needed. And we would like to help these success stories to grow further. Among the successes of the incubator I would also like to mention that since autumn 2017 EIT Innonenergy HUB has been also operated by Startup Campus in Hungary.
And what is needed for international success?
Whereas in Estonia the population is so small that Estonian startups launch their business rather in London because they cannot validate their ideas on a national level, Poland with its market of 30-40 million people is large enough to make it possible that startups achieve significant growth on a local level, as well. Hungary is somewhere between, since the market is big enough to not have to start to validate your ideas abroad, however if you want to achieve big numbers and results, you need to open to foreign markets in sometime.
In order to be able to support the 21 businesses involved in our Incubator program in the foreign markets as well, we spent enormous amounts of money together with our partners from the public and business sectors on getting familiar with foreign ecosystems and starting to cooperate with new partners from foreign markets. We understood that the key factor in the success of Hungarian startups is how we can assist them to enter the international market. This thought lead us to establish the third pillar of our organization one and a half years ago, Startup Campus Global. We currently have a business network based on the Hungarian diaspora in several countries and we also maintain our own offices in Berlin and London to provide services relating to market entry.
In cooperation with Hungarian Export Promotion Agency (HEPA) we set up a one-stop market entry program, Startup Campus Hungary for Hungarian startups expanding into the international market. The aim of this initiation is to take up the best Hungarian innovative businesses and introduce them to the international market and by doing so, to improve the visibility of the CEE region and Hungary.
Can serious challenges be expected by the businesses who would like to be successful abroad? How can you help them?
We need to prepare the start-ups very precisely at home and afterthat we need to recommend them reliable foreign partners.
A domestic business which has been just launched may struggle with many doubts, since it is not sure that what they have validated here is required abroad as well. Nevertheless, they may need help with setting up their local service or selling their products locally, too. Of course there is a 0.5% existing like Bitrise, Sharp 3D or Prezi, where they have the team and leadership approach needed to step into the international market by themselves too but in most of the cases even these talented innovative projects need support.
With appropriate knowledge and network, one can be successful abroad from Hungary as well, a good example of which is Gomontir. We started to work together with them in the phase, when no one else would have invested into their idea and since then their software supporting service sharing has been launched in the Indonesian market. I usually say that Asia is fast rail and in Europe we sit on high-speed train. We need to be aware that there is a stiff competition, there are no friends, only rivals and if we don’t prepare well, we’re going to fail.
Thanks to the new state subsidies, the domestic startup sector is now facing enormous opportunities.
The government has realized that when building an ecosystem, subsidies play a key role at the beginning, so that it can provide knowledge, support and financing at a stage when the risk is too high for private investors. Startup Campus cooperates with a number of capital funds and in education and training programs our key partner is Hiventures Venture Capital Fund Management Zrt.
70% of the European venture capital resources are relating to some state- or EU financing. The neighbouring countries focus on the initial phase as well but in the countries, which aren’t members of the EU and there is no such source available to them, the ecosystem is controlled and supported by successful businesses. In the EU countries the incubators – in Hungary there are 20 incubators actively helping the starting businesses on a national level – play a key role, since we are the ones who can build up companies.
What are your plans, in which directions would you like to expand?
We would like to involve even more companies and partners in our programs and scale our services both in Hungary and abroad. My vision and definite aim is to turn Startup Campus into an international accelerator program supporting business development, available in more and more countries. As for the business part and entering to foreign markets, we would like to strengthen these based on the Hungarian diaspora network. We plan to open offices in the USA, further European cities and South-East Asia. We believe that these locations can provide the Hungarian businesses with real markets. One can start to create international success stories from Hungary, as well.
Kolozsvár (2020), Debrecen, Budapest, Győr, Berlin, London