Most businessmen dream of opening a branch in the United States. Such a step can determine the success or the failure your business but, as Prezi CEO Péter Árvai says, if you want to build a global brand, America is the key.
“When Prezi decided to open an office in San Francisco, that was a pretty bold move. We had been on the market for five months, and Prezi had 12 employees or so,” Árvai tells the Budapest Business Journal.
“But since we were aiming to have global success from day one, we knew that we had to go to the United States. There were couple of reasons for that. First of all, if you want to have a global success, today you need to be successful in the U.S. too. There are companies built in Hungary, which are able to make business in Germany or in the U.K., but that is not enough for global success. That is why it was crucial to gain some ground there.”
Prezi is not the only successful Hungarian firm operating in the American market, of course. The automotive navigation and infotainment software company NNG has four offices in the United States (Detroit, MI; Greenville, SC; Atlanta, GA; and New Market, VA). In April 2015, the company opened its North American automotive offices in Detroit to help facilitate growth in North America, while strengthening local sales, marketing, engineering, and research and development support teams.
“The North American market remains a significant opportunity for NNG and will be a critical proving ground for our new technologies,” Jim Robnett, vice president of business development, NNG said at the time.
“Suburban Detroit is the focal point of the automotive industry. This, coupled with the exceptional technical talent located in southeast Michigan and the close proximity to our customers and partners, made Birmingham an ideal location for NNG’s new North American automotive offices. Consumer demand for a truly integrated and differentiated navigation experience in the car continues to intensify, and NNG is well positioned to capitalize on an ever-growing need.”
Robnett is charged with helping NNG expand its business with U.S. automakers and leads the Detroit office. Late in 2014, NNG won a bronze International Business Award from the Stevie Awards in the “Fastest Growing Company in North America” category.
And NNG is not the only Hungarian company expanding in America. Kecskemét-based Magnus Aircraft launched Magnus America LLC around this time last year and opened a maintenance plant in Fredericksburg, Texas.
When it comes to deciding where it is better to set up in the United States for business, Árvai suggests San Francisco. “New York and Boston are closer to Europe which is a big pro; however, Silicon Valley has a really unique offer. Being in the Bay Area allowed us to learn from other companies and use their best practices, so we decided to open up our office there.”
According to the U.S. Department of Commerce, in the first half of 2017 exports and imports between the two countries amounted to more than USD 2 billion and the Hungarian Chamber of Commerce underlines how America is contributing to the Hungarian economy, being a very big player when it comes to FDI.
But the United States is not the only North American target. Hungarian firms have also chosen Canada and Mexico, as Prezi again demonstrates. “We have 300 employees: 180 are based in Budapest, 70 in San Francisco, 30 in Riga [after the recent acquisition of the Latvian company Infogram], 15 in Mexico City and a couple of them in different cities,” notes Árvai.
The Hungarian National Trading House mentions several different areas where Hungary really adds value: ICT, automotive, and agriculture are all sectors where Hungarian businesses are welcomed abroad, especially considering the high-qualified workers Hungary can count on, it says.
Canada seems to be a particular target for investment nowadays. Known as the best country in the G-20 in which to do business, Canada presents a good business environment with easy market access and lower tax costs (according to the Canadian Embassy in Budapest, taxes are markedly lower than in the United States, particularly corporate income tax).
Still, most entrepreneurs who want to live the “American dream”, want to do so in America. But, perhaps not surprisingly, entering the U.S. market is not that easy. Arvai tells us the two major challenges Prezi had to face when it decided to open an office in San Francisco.
“Working with different teams divided between the United States and Hungary it is not easy. It takes a lot of time and it requires a lot of meetings to keep everyone updated and to make sure that everyone is on the same page.” And that is not helped by the nine-hour time difference between San Francisco (now on Pacific Daylight Time), and Budapest (Central European Summer Time).
“The second important thing to keep in mind is the cultural differences. It takes a lot of time to manage people with diverse backgrounds.” But at the same time, nowadays this diversity can be turned into a strength. “This was one of the most important factor in our success. We think that diversity – different point of views under the same roof – helped us to build a globally successful product. For example, in our Budapest office, we have people from 26 countries. This diverse community is our main asset.”