The event was opened by Szabolcs Szakacsits, the founder of Tuxera, one of the most successful companies in Finland, who compared his 22 years of entrepreneurial experience in Finland and economic data with his home experiences: first of all, he highlighted the problem of efficiency, the administrative integration of Tuxera Hungary was very difficult. They have very successful subsidiaries in several countries, so it was obvious that the opening here didn’t bring enough success. During his investigation, it became clear that the processes were very complex and expensive, which should be significantly automated and digitalised, and they could achieve significant increase in result with a better motivated labor. The lack of trust is determinant and rare, the information sharing is mainly ad-hoc, so the knowledge based society is not being built. In our country, it costs more than ten times to start an enterprise and bring it to the market than in Finland. Many well-known solutions are rare in Finland. One of these is the lack of SAFE investments, which he pioneered in Hungary by investing in Puli Space Technologies, which had previously closed a successful support campaign on the TőkePortal. He also highlighted the lack of angel investors: they now only have a group of 30 business angels compared to the target, which is 200 angels, but they need to develop more startups of the right quantity and quality. He liked the quality of the Tőkeportal’s work as an investor too, which he compared to the Finnish platform Invesdor, and he absolutely support it’s mission.

He concluded his speech with the festival’s slogan: “Affect, create, increase and the ecosystem will be competitive.”

Imre Hild, the moderator of the evening, said after the event that nearly 150 people had gathered on the A38 on 12 October for Ecosystem Festival. The key themes of the ecosystem were discussed along the main stages of a startup’s lifecycle, in 4 panels with 24 panelists. The panels were complemented by keynote presentations and 2 video presentations. Everyone agreed on the main points – strengthening communication and collaboration is essential to create a living fabric of a startup community that can grow on its own and attract more and more people. This is important because an ecosystem needs to grow in order to attract the different actors, international investors, supporting organisations, global programmes and in this way induce more attraction.

The panelists’ thoughts were generally focused on the internationalisation as a necessary element for a healthy ecosystem development. Three main aspects of this were mentioned – the need for more internationally experienced start-up entrepreneurs and other ecosystem actors, more living international connections between organisations and if the ecosystem was open and recipient to growing international companies choosing Hungary as their regional hub.

Typical domestic problems were also mentioned by panel members, such as the lack of clear regulation, which is often delayed years. The keynotes were more focused around the thoughts of a participating company or sponsor, and offered cooperation or best practice tips from abroad tot he guests. Overall, the participants were enthusiastic and responsive to the development of the startup entrepreneur community and ecosystem. It was repeatedly mentioned that they will focus in their everyday life on mutual and selfless communication and to giving back their experiences to the community. We will work on giving space to these commitments, and we will be reporting about this in the near future.

The first panel’s topic was about what makes an idea good and how it becomes a business, what are the challenges of the early stage, but the panelists immediately radicalized the question: what’s wrong in the early stage? Péter Kovács, an expert of a thousand startups and the founder of Iseeq, Budapest Startup Safari and the Global Startup Awards, said the main shortages were: lack of smart angel money and lack of self-confidence, which is a typical Hungarian trait. Young people should go abroad as much as possible, make as many friends as possible, and bring the mindset and self-confidence with themselves that is typical of young people in abroad. Timur Csillik, founder of the fintech company Nabu.xyz, spoke about his experiences in the Antler accelerator in Berlin and London, as he said the talent pool, the ticket sizes are orders of magnitude bigger, they think about entering the market and scaling up in a completely different way than we do in Hungary. He said Lithuania is a good example, where former successful startups are giving back to the ecosystem. Kinga Incze, founder of Mediaspace.global, continued Szabolcs Szakacsits’ introduction, saying that it is a Hungarian peculiarity to overcomplicate things, to burn a lot of time and energy, while a minimum MVP should be needed to enter the market as soon as possible. She sees a problem in the fact that the large markets are not connected, and there is no network between the small ecosystems. The lack of connectivity is a problem in itself, everyone is building their own ecosystem and there are few points of interconnection. Confirming this, Péter Bártfai said that there is also a lack of local communication. It is difficult for start-ups to find their way around, there is a lack of a leading voice, little information and no feedback. Attila Suba, director of the startup division of the Express Innovation Agency, highlighted the lack of a feedback culture, the teams not getting feedback from investors after a pitch. Péter Bártfai from StartITup Győr cited the fear of the West, of internationalisation, as a barrier to development.

At the end of the panel, the participants agreed that building an ecosystem is a very difficult task, but it can be achieved with the sacrificial work of many people. The question is whether this task could be institutionalised.

The second panel discussed the challenges of building relationships and raising capital, what is a “startup dns” really? Csongor Biás, Head of the Startup Hungary Foundation, started the discussion by saying that ten years ago the ecosystem was much more developed compared to the regional countries, so we are lagging behind compared to the countries across the border. Back then, startups didn’t even think about staying in the Hungarian market, and nowadays many of them stuck at that level. Elemér Eszter from Impact Ventures says that there is a certain amount of convenience, but the Hungarian ecosystem has developed a lot, if you look at the volume of investments, the segment has grown by an order of magnitude. Angel investor Petya Balogh drew attention to the lack of education, saying that Hungarian entrepreneurs are five years behind their Western counterparts because they need so much time to catch up in terms of knowledge. According to László Jónás, CEO of Design Terminal, the ecosystem has indeed evolved, but if you ask whether we have done everything, there are gaps. In his opinion a startup is an entrepreneur, a good entrepreneur. According to László Hradszki, senior advisor at Hiventures, there is a difference in thinking between the north and south and west and east of Europe, and Hungary is rather poor in this respect. Roland Kovács, co-founder of pozi.io, also finds that cultural differences mean that Hungarian and foreign teams are at a different level. Looking for the reasons why, he said that start-ups in this country do not have the opportunity to learn and develop.

The third panel’s participants discussed international market entry and growth pains, and they reached the following conclusion when discussing the opinions. According to Zoltán Várdy, founder of The Launch Code, the first and most important factor in the growth of domestic startups is to improve the domestic sales and marketing approach. He highlighted 2 factors that would be necessary for startups, namely at least 2 years of experience in a multinational company and the launch of an organisational development programme in which they can participate. Barbara Verő, co-founder and owner of Future Proof Consulting, said that the main gap is in people’s management skills, as they are usually able to run the company down to the micro level. In addition, one of the essential pillars of scalability is to develop the right leadership within the startup operation. Márton Suppan, founder of Peak Financial Services, drew attention to the importance of eliminating micro-management in the growth process. A 10-person startup and a 30-person startup in the growth phase need to be managed differently. In his view, not all companies are suitable for the international market because of their scope of activities. And failure should be seen as a learning curve. Ákos Deliága, co-founder and CEO of Talk-a-bot, said that the most important role of the ecosystem is to have a long-term vision and resources for change, thus relieving the burden on startups. Currently, none of the Hungarian company forms are ideal for startups, and the SAFE investment form and employee share option are complicated to arrange. Dalma Berkovics, Head of Sales and Partnerships at MOME, recalled from her own professional background the urgent and dynamic operational structure of a Spanish company to enter the global market. She observed that when a start-up is launched, it takes much more effort to reach the Hungarian society than in the surrounding countries.

The panelists were unanimous in their opinion that the events with a similar ecosystem-building purpose add a lot to the development of the ecosystem. The implementation of international experiences in Hungary and the development of an entrepreneurial mindset at an early age were discussed.

The fourth panel was a really exciting discussion about sharing relevant experiences. Zsigmond Bodnár, Jared Schrieber and Gábor Szántó talked about the successful exits they made: they told that the idea of exit came up in a casual conversation in their lives, and the next thing they realized they were signing a term sheet. The most difficult part of the exit is the personal attachment to the idea that the product and/or service we have grown up is going to be someone else’s property and we have to get rid of it. Andrea Kozma talked about the attitude of startups: members of the Hungarian startup ecosystem – when it comes to exit – don’t see it primarily as money, but as the success they have achieved. One of the most important steps of an exit is to find the right investor with the perfect timing. And Istvan Fetter revealed that CIB Bank supports the domestic startups significantly. During the panel discussion, there was a small argument about the need for an investor, whether it is really necessary, as the involvement of an investor creates a kind of commitment, which comes with obligations. It was also discussed that the term sheet currently used in Hungary is very different from the term sheet used in Silicon Valley. The aim is to acclimatise to Silicon Valley conditions in Hungary over time.

Balázs Horváth – Startup Grind

Balázs Horváth, founder of Startup Grind Budapest and Tech In The City, has been involved in mapping the Hungarian tech and startup ecosystem for 4 years. At the beginning of his opening speech, he emphasized that he considers the Ecosystem Festival a very important and missing event. In recent years, after active discussions with the most different organisations, many problems and gaps have emerged, which, in his opinion, can only be solved through joint efforts and determination. The need for change is there and this requires the successful and systematic development of three well-defined values or ecosystem building blocks. The three most significant areas that he highlighted, without which we cannot talk about a well-functioning ecosystem, are shared thinking, collaboration and communities. In his opinion, collective thinking can lay the foundations, which sounds very simple, but is perhaps one of the most damaging diseases that the domestic ecosystem is struggling with: for example, the need for actors to know about each other, to be curious about each other, to dare to argue and to listen to each other and others. The second element is collaboration, the art of working together. We need to get to know the other people, see them as partners and equal members, and work together to find common ground and synergies. Thirdly, he highlighted thec ommunities, sharing some thoughts on their role and recalling a surprising and instructive story. At this year’s World Summit Awards, based in Graz, he met Adam Montandon, who was the Master of Ceremonies for the event, and a conversation with him highlighted the importance of the role of individuals in the community. Adam, as a winner of the 2006 WSA competition, still works on building the community to help the organisation that supports him. We have so much work to build communities like this, let’s make this our common cause, let’s work together for a better ecosystem.

Krisztián Berecz – SEON

Krisztián has been the Business Development Director of Seon, one of the best-known Hungarian startups providing effective protection against online fraud, for 3 years. During this time, the company has developed globally, grown to over 300 employees, and realized the “golden rule” of scaling, tripling their revenues in the first two years and doubling their revenues since then. As a result, in addition to their headquarters in Budapest, they have a commercial office in London and several hubs in the US. One of the keys to their success is that they run their marketing activities and social networking sites as if they were a B2C company, while the service is B2B. Their competitors sell mainly in America, so Seon’s focus on Asia and Europe when it started and this is still the main source of their revenues. Raising capital has always been a strategic decision for them, as it has allowed them to build new relationships with globally recognised companies and opened up new revenue resources. He emphasised that his and his colleagues’ mission is to transfer their knowledge, which is constantly expanding day by day, to the local startup ecosystem. Krisztián is an active investor in TokePortal also and other domestic startups, which he also mentors. He is able to compare his domestic experience with his own experience in foreign ecosystems through SEON.

Péter Fáykiss – MNB

Péter Fáykiss, the Head of the Digital Directorate of the MNB, gave a brief overview of the FinTech sector, highlighting that although the Hungarian FinTech scene is not large by international standards, it is constantly developing, with nearly 150 FinTech companies active in Hungary. One of the important tasks of the MNB’s digitalisation area is to encourage the digitalisation of the financial system, but it also has concrete partnerships with FinTech companies. The digitisation of the banking sector is supported by the MNB’s Digital transformation recommendation, which provides a comprehensive framework: in addition to customer relations, it also sets out expectations and good practices for internal operations, banking systems or digitally accessible products. In March 2018, the MNB Innovation Hub was launched, where innovators can find the MNB as a regulator and supervisor on a dedicated platform. Through this platform, innovators can get feedback on the compliance of their new solution and the legal possibilities for its creation. They have also created a Regulatory Sandbox, where participants are temporarily exempted from certain regulatory requirements and can test their new solution. Their initiatives are increasingly being used by the domestic ecosystem and more and more FinTech companies from abroad are approaching the MNB. They are also collaborating with FinTech companies on several innovation projects, such as the MNB Digital Student Safes app, the MNB Money Museum mobile app, or the MNB Chatbot.