Fever pitch

Incubators

The ‘Startup Spring’ event series, which is meant to bring together regional players in the ecosystem, culminated in the ‘Central European Startup Awards’. The best ten competed in an ultimate pitch rally for the ‘Startup of the Year’ title that eventually went to RateMySpeech, designed to share public speeches and allow feedback.  

At first, there were tremors, but by now what is going on in Hungary’s startup scene is more of an earthquake. Budapest is turning into a startup hub, and with that the goal envisaged by the National Innovation Office (NIH) seems to be coming true.

The most recent piece of evidence for such development was ‘Startup Spring’, a series of events aimed at strengthening cooperation between players in the ecosystem. Initially, 60 teams from six countries signed up, from which 25 reached the pre-selection stage in April.

“In Germany, holding startup events at universities is common place,” Peter Zaboji, Founder and President of the European Entrepreneurship Foundation noted in the wake of the event. “Now this is starting to happen in Budapest as well. It’s fascinating to see how this ‘virus’ is spreading.”

Boot camp polishing

A jury made up of international experts picked the ten best contestants to compete for the ‘Startup of the Year’ title in the Grand Finale of the Central European Startup Awards. Prior to the showdown, however, a unique chance was given to polish their pitch technique in a boot camp, an experience by itself.

Participants were rigorously prepared by top-notch pitch trainers in order to boost their performance. “You wouldn’t recognize these young people, they have changed so much since the beginning of ‘Startup Spring’. They have become confident and ready to find VC for themselves,” Endre Spaller, Head of NIH said in his assessment of the bootcamp.

Jacek Pluciński, CEO of Poland’s Lab4motion, whose company also qualified for the last round, praised the Hungarian effort. “NIH apparently helps create an environment where startups can thrive. I also sense a lot more activity as regards startups here as opposed to in Poland. The Polish government relies very much on EU money, whereas in Budapest VC is a lot more present and accessible,” he told the Budapest Business Journal.

Pitch of a lifetime

The final pitch rally witnessed well-trained contestants on a chilly May night in the Grund, all carried  live on UStream. The jury grilled them regardless. “You need to be able to stay focused under any circumstances. Absolutely nothing can distract you,” stressed panel member Péter Kádas, Partner at Traction Tribe, which describes itself as a “startup traction composer company”, a catalyst for tech startups from Europe looking to enter the U.S. market

The contestants were asked questions after each presentation on projected revenue streams, user numbers and aggressive growth plans. Speakers were also invited to reply to more complex questions in one single sentence. In spite of the hard training and professional mentoring, being concise and clear proved to be tough. In one case, the nature of the problem that a solution was being offered for did not come out in the presentation.

The Valley awaiting

As expected, a very close race developed between Hungary’s RateMySpeech and Lab4motion. In fact, in the end the team that showed the biggest improvement during the entire ‘Startup Spring’ won the title. The winner, RateMySpeech, delivered a performance worthy of their product, through which speeches can be shared and feedback given online.

“We’ve got a die-hard team and we believe that by improving public speaking skills we can make a positive difference in the lives of people, organizations and communities,” Founder Attila Szigeti told the BBJ.

The team also pocketed a ten-day trip to Silicon Valley. “We hope to establish the contacts needed for us to go global. We’d like to bring home as much from the startup culture there as possible in order to contribute to the development of the local ecosystem,” Szigeti added.

László Korányi, vice-president of NIH said, “Next year we need to make sure that the contest gets even more publicity abroad, thus increasing the number of countries represented,” . “An additional incentive is that two teams specializing in tourism will have the chance to do three months at their own expense at a relevant business incubator in Paris as part of an exchange program,” Korányi added.  
The 2014 CESAwards was organized in a joint venture by IseeQ, Mobility and Multimedia Cluster of Hungary and Drobe Productions from Denmark.

Reality check

“The technical talent is unparalleled in CEE, but design sucks and sales and marketing are horrible.” Such was the harsh, but realistic evaluation of Marvin Liao who was invited to give an insight on pitch training techniques for teams registered for ‘Startup Spring’.

Liao, a celebrated trainer in Silicon Valley, was not happy with what he saw. “I was banging my head against the wall at how badly prepared some of the teams were,” he told the BBJ. He was disappointed by how many candidates had expected tasks to be done by third parties that were clearly their own homework to complete.

Liao further shared his thoughts on the startup phenomenon. “Going global is the hardest thing. Global-oriented companies should go to the Valley, but if you are consumer-oriented, it’s not necessarily a must,” he noted.

He also highlighted that 75% of new product launches fail because the product is separated from the marketing. No wonder the concept of ‘growth hacking’ was identified by Sean Ellis. Ellis replaced the marketing mantra of ‘buy it’ with ‘find it’, referring to the fact that growth hackers rely on the power of sharing information and viral marketing instead of buying expensive ad spots in traditional media.

‘The idea itself is nothing. Most successful firms got where they are because they had a plan B,” Liao added. “Startups are not rational. They are learning machines, they have a vision, but they are also very flexible. In this, the world is becoming more like startups that, among all that uncertainty, go for the unexpected. You need to embrace this optimism.”

-- this is an article from BBJ print vol. 22 no. 11

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