As the co-founder and CEO of Prezi, Peter Arvai is a thought leader not just in the startup world but also as a figurehead of the nascent startup scene in his native Hungary. He’s a partner in initiatives that promote entrepreneurial motivation in Hungary, as well as promoting diversity as both the right and financially-wise choice for companies.
Elliott Adams: Hungary, one of your two home countries, probably needs a little more support than the other, Sweden. Let’s start with how you’ve been involved with the entrepreneurial community in Budapest.
Peter Arvai: Well, when I arrived in Budapest in 2008, I got the feeling that the whole idea of startups wasn't a very big thing at the time, and we started Prezi. As we grew up, so did three other global successes. LogMeIn—that’s on NASDAQ—Ustream, and NNG. Actually, NNG is a very successful company, but they are not a consumer-facing company, so you wouldn't know about them. But a lot of the cars that you drive and their navigation systems are actually made by this Hungarian NNG company. And so actually, as we were growing up and reaching increased numbers of users and successes around the world, I sat down with the people of these companies, and we also created an NGO.
EA: What’s the goal?
PA: We feel like one of the things that holds Hungary back today is not a lack of knowledge, talent, or abilities, but it’s actually the challenge of there being very, very few role models of entrepreneurship in the country. So, think about it. It was only twenty-five years ago that the country transitioned from a socialist system to an entrepreneurial, or at least market-driven, economy.
We have these initial successes, and other than that, a lot of the economy in Hungary is really a lot of people who you'd think about outsourcing—how Americans think about outsourcing, that happens to Hungary as well. You have car manufacturing, for example, or support centers, and that kind of stuff. But now, there’s a whole new generation of young people—and Prezi is a great example of this—who are kind of building their own companies and starting to establish a new way of thinking: “Okay, we can actually be global leaders.” Right now, the thing that we believe keeps Hungary back in that process is, while we have this handful of examples, still very few people understand how that works and what is required to make those stories happen. So, we have built an NGO where, essentially, the only goal is to contribute to a self-image for Hungarians. Optimism is not just sufficient but actually a necessary first step to take, and you can take that for granted, I guess, where you're from.
EA: We do take it for granted. I mean, it’s a cultural issue that I think many in the US don’t understand is different.
PA: Even in the US, it’s very different, depending in where in the US. I mean, I think this is one of the big challenges for the US right now. A lot people are starting to not believe in the American dream anymore, and so we have all of these political shifts happening, but I don’t think we can take it for granted, even in the US. The point being that there’s a lot of work, actually, in helping people to understand how they do have opportunities in their countries and in their world. We actually have great results from that work. In the last four years that we’ve been doing this, we’ve measured annually the awareness of it being possible to build global success out of Hungary. We’ve taken that number from about 7 percent awareness to about 47 percent of Hungarians who have, in about four years, learned about the possibility of this. We're also working with leaders and educating them in how to grow businesses. So, this is a very, very conscious thing that we’ve taken on.
EA: There are initiatives that are typical—for example, putting up a co-working space or an accelerator. Is that part of what you’re working on as well?
PA: Actually, it’s not. Everyone is involved with startups now, and we didn’t feel like the money was important. That comes in time. People are taking that initiative, but actually working on the internal narratives that we have around entrepreneurship, that is something that very few people are tackling, even in the US.
In my view, why it’s so important is because without the understanding and the belief that this is possible for people, we immediately end up in a non-functioning society.
EA: Yeah, it happens in these geographic locations around demographic issues, but the issue is also going outside of different regions and classes.
PA: Entrepreneurial inclusiveness. Maybe that's a concept we should be talking about.
EA: It sounds like this is, if it's not too dramatic to say, a consciousness-raising effort.
PA: Oh yeah, totally. I mean, our main goal is to spread inspiration. We do that with the NGO. If we’re focusing on that, through television shows, books, meet-ups, it’s never as practical as incubating companies, but we do think that the conversation itself is extremely important.
EA: As you said before we sat down, there’s no shortage of intelligence or talent. It seems like you’re in the same situation as many countries in the region, having a strong engineering talent, being a hub for outsourcing at times, and transitioning to being owners. Is that generally correct?
PA: I think so. One of the things we need to create more awareness around is that a lot of places like Hungary actually have a very rich tradition of assets that we can tap into. For example, a lot of people don’t know this, but the movie Casablanca was directed by a Hungarian. The oldest studio alive right now in Hollywood, guess what? Founded by a Hungarian. All the four companies that I’ve mentioned do some form of visual communications.
Hungary is actually extremely strong, and Hungarians are also quite proud of the strengths we have in mathematics and engineering. But again, those stories sometimes get lost in the noise. A lot of the time, even Hungarians aren’t aware of their fantastic competitive advantage in the world.
When we talk about entrepreneurship, it’s very helpful framing to ask, “Okay, what is the problem that we're solving for users?” And sometimes, when we don’t recognize and appreciate the skills, how can we help those users? We can actually miss the biggest assets that we have to bring something valuable to the world. That is not a relevant question in Silicon Valley because everyone there already thinks that they have something very valuable to bring to people. But if you look in many other places around the world, that is a very key question. Gaining appreciation for the special insights and perspectives that you have is so important because without that, you won't ever take the first step.
One of the things we’re doing with these companies that are now going global is we are actually creating a whole new generation of people who don’t just study engineering, they also think about how to build businesses. Going back to this idea that twenty-five years ago, Hungary had a centrally-planned economy, the idea of building sustainable businesses that would go global was probably a pretty foreign concept. So, I think that is an area where we can see there’s a lot of momentum. I mean, in many, many ways, it creates a tremendous opportunity for people who are willing to take that step. If we compare Budapest to London, where London is already a bit overcrowded, everything is super expensive. In Hungary, right now there is already a critical mass on global success that you can actually be in a community where people have that mindset. It’s also still a place where you don’t have to sacrifice quality of life and you can live a really good life.
EA: I also wanted to talk about the diversity initiative you’ve started. Can you talk about the impetus behind We Are Open?
PA: I think it’s important to recognize that a lot of people believe that diversity is not just the right thing but the good and beneficial thing, in terms of business. In my view, creating a work environment where people can bring their whole selves to work and they don’t have to waste energy on being nervous about being accepted with their unique background is very important. That is a really great way of actually creating not just a diversity of backgrounds but diversity of thought, which is what you really need. In that creative economy that we talked about, diversity of thought is really important. I have personal experiences with this. The Financial Times put me as number eleven of the most influential openly gay business executives. What I meant to say with that is, even in my lifetime, I have seen a huge change on this topic. Sweden is seen as one of the most liberal places on earth, and yet when I was growing up there, I didn’t know of one openly gay business person. I mean, I knew about a comedian, I knew about a TV host that was dying of AIDS, and I knew about a cross-dressing makeup artist. They were my role models as a child growing up in Sweden. I was like, “Okay, can I identify with any of these people? Does this mean I have to be like them? Can I go into business and build products, which I would like to do, and be gay at the same time?” There were no signals that that was actually possible.
Similar to Bridge Budapest, what we’re doing in Hungary is we’re gathering people who know that diversity helps businesses to grow and do well. We help them share the best practices, and in a similar way as with entrepreneurship, we share inspiring stories of people who are leading a business. For example, being a woman in the workforce, and sometimes it may sound trivial, but the truth is that there are lot of barriers.
EA: I’m not familiar with the zeitgeist around diversity in Hungarian society. I would not necessarily guess it would be the most accepting, to put it mildly. It seems like it's a bold move.
PA: It’s an authentic move.
EA: I think what's really interesting is that the typical story is, “I’m from this company, and I am going to fund an accelerator back home.” But you’re pushing against the societal norms to make things better in a broader way.
PA: I think that is the best form of entrepreneurship. I mean, if you go back in history, there have been a lot of examples of entrepreneurs taking a lot of responsibility. For example, the city where I grew up in Sweden pretty much exists thanks to Alfred Nobel.
Many people don’t know that he was an entrepreneur and made all his money on business, which he then donated to these prizes. But even before that, he was building outhouses for the factory workers, and he had a very, I would say—I’m certain there are parts that we’d think of his thinking that would be outdated today, but there were parts that were very enlightened. He was all about, “Okay, how do I help people to have better lives?” That was a natural thing to be thinking of as a part of your business. I think of similar stories with Ford and, you know, these were entrepreneurs who were thinking very deeply about how to not just create better lives for customers, but also the employees and in general, society. How do we contribute?
EA: It’s not always the narrative that’s been in capitalism from the beginning, and so we're in a place that's relatively new to capitalism with these issues.
PA: Yes, and the other aspect that I feel very strongly about is this narrative among entrepreneurs that the first year is supposed to make all this money and join the dark side, or whatever—
EA: Be a Rockefeller or a magnate?
PA: Yeah, and then, once you’ve made all your money, it’s almost like then you’re going to race to do some good in the world and redeem yourself before you die.
EA: Put your name on buildings.
PA: Yeah. Because you’ve, perhaps, screwed so many people over. That’s such a sad—like, why aren’t we thinking more about how to integrate those things throughout your life journey? That, I think, is really important.
I wish that we would talk more about that, even just to educate other entrepreneurs, again, back to this question of, “What is the narrative that we create around entrepreneurship?”