By: Paul Chen
Down the street from theHub.hu you can find a coworking space, called Loffice. Coworking offices are based on the sharing economy, which more and more excepted in business. Loffice is the oldest coworking space in Budapest, opened their doors in 2009, in the former printing house of the Liszt Ferenc Music Academy in Paulay Ede street. The six-story building, upon being restored in its original character and operating with renewable energies. Loffice is known as a new-generation office, it is located where the creative and the business spheres coincided; a place where the meaning of working gained a new understanding, networking and relaxing opportunities are provided, a place where everyone could find a space best suited to their activity. More info can be found here: http://lofficecoworking.
Loffice is focusing on SMEs and, in the meantime, working on several new projects, one of them, BiznizLab, is tailored to startup companies. Loffice is working on an incubator with 3 other partners in order to provide professional guidance and building an online database for startup companies. The project is still under construction. Loffice will launch BiznizLab in 2014. BiznizLab is meant to increase the possibility of visibility and help to validate projects and to help startups to become investment-ready. At the moment, it is in the late stages of the fund-raising process.
Anna and Kata Klemetz are the founders of Loffice, would like to invite you to Budapest and check them out. The startup ecosystem is growing rapidly in Budapest, so there are lots of opportunities. New innovative ideas are always welcome!
Did you know that there is a Deutsche Telekom incubator in Budapest as well? It is called Kitchen Budapest or KIBU for short. In Kitchen Budapest, they experiment with ideas in the intersection of design, technology, art and business. Founded in 2007 and powered by Telekom, they are a multidisciplinary team of designers, technologists, artists, researchers and entrepreneurs working in a hyper-collaborative environment to create value and push boundaries forward.
Currently they have two programs which are looking for participants. First is the Talent Program. It is meant for 20-25 year olds who are still in university. It hopes to give them a motivation to grow their ideas. It is a 6 month program for those in the field of tech, biotech and hacking. It is set to launch in late January of 2014. What is unique about this program is that the pre-startups will have access to a in-house mentor. There will be a 80,000 HUF stipend for qualified participants. The winner gets a spot to the next round of the Startup Program.
The Startup Program is to help talented teams and great projects to change the world! Essentially, those who want to make millions of people’s life better and happier. They believe that a place is needed, which inspires personal improvement and startup development. The three most important ingredients of a successful realization of a startup are knowledge, relationships and money. This is why their mentors, partners, domestic and international investors, and 6 million HUF financial funding are at the startup's disposal during the step by step development of the startup.
I met up with Zsolt Winkler, the managing director of KIBU and asked him a few questions:
How do you feel about the state of the startup ecosystem in Budapest?
Like most of the people you interviewed, I would agree that we are still at the beginning stages of the development. There are still lots of work to be done. Despite some successes, many startups are not at the stage where they are ready for investing yet. However, here at KIBU we are working hard to change that.
Do you feel that there is a lack of funding in startups?
No, we have enough funding to get us growing. Hungary has just received about 400 Million Euro of Germy funding from the European Union. However, I feel that we still need to be educated on how to fund startups.
At the moment, startups are not too well educated in how much control they should give up in order to get funding. At the same time, some local VC's are not well educated on how much equity they should take for their investments. For example some VC's might ask for 50%, non-negotiable for 200 thousand Euros, whereas 20-25% would be more reasonable.
But that would give the VC almost sole ownership of the project and make pivoting very difficult.
How is KIBU combating this?
In our Startup Program we are only asking between 10-20% in exchange for up to 6 million HUF plus mentoring services.
What are you looking for?
We are looking for startups that would like to solve problems of one million people. It is not limited to telco, but other fields can be considered.
Other than mentoring, what else is included?
We are offering education in strategy and design, developing an effective pitch, setting up a solid business plan, and get the startup ready for the seed round.
Has KIBU had any good success stories?
Yes, one of the biggest success stories to come out of KIBU is Prezi, the dynamic Flash-based presentation software producer.
What are you working on currently?
We have two startups currently in progress:
You might have seen some of your colleagues making their presentation on something other than the popular Microsoft Powerpoint. If you have, then most likely, it would be a Prezi presentation. And they are fantastic! The SaaS presentation tool is Flash-based and very dynamic. It allows you to move, zoom-in, zoom-out. Just as you think you might get bored with one particular slide, you are whisked away on a ride to another part of the presentation. And the software allows you to feel the journey with very clever movement in graphics.
The company isn't really that startup-like anymore. One cannot just turn-up and talk to anyone, you need to make an appointment. I was able to ambush one of their representatives and get a coffee chat. She expressed her joy with working at Prezi. She told me that the working space is up for a award of working space of the year in a local contest.
One of the things that she kept emphasizing was the values of the company and its employees. They want to allow their employees to be free thinking but hard working. Because of the open office space, there is a community feel to the place. She is happy to report that the founders of the company are very accessible. They aren't hidden away in some ivory tower guarded by a gate-keeping administrative assistant.
She feels that Budapest is really coming around as far as startups are concerned. It is powered by the youth and their optimism. The city is cosmopolitan populated by talented young professionals who enjoy the pressure and don't mind collaborating for the greater good.
One example is the Bridge Budapest. It is a fellowship allowing talented Hungarians to gain practical experience by working at one of the big three, Prezi, Logmein, and Ustream. Not only do you get to work in one of the most promising Hungarian companies, you are equipped with a smartphone, insurance, and accommodation. Your travelling expenses are also covered. The only requirements are the application process, participation in meetings, and file a „report” at the end of the program. More information can be found here.