Hungarian, High Tech And Programmed To Sell

During his first meetings in the late 1980s with Hungarian entrepreneur Gabor Bojar, French software distributor Xavier Soule was puzzled by the mysterious woman who always tagged along with Bojar but never said a word. Bojar, president of Budapest software developer Graphisoft, finally identified her as an agent of Hungary's communist government, assigned to make sure he didn't pocket Western hard currency or commit other illegal acts. The tight rein, however, didn't curb Bojar's drive. "He's a totally self-made man," says Soule.

Indeed, against all odds, Bojar has built tiny Graphisoft into an Eastern force in Western markets. Bojar, 44, is an example of the abundant software talent in the ex-communist bloc--and of how Eastern entrepreneurs can overcome obstacles in the West. First, he targeted a narrow but lucrative niche: software that lets architects design buildings and interiors on Apple Computer Inc.'s Macintosh. Last year, his ArchiCAD package earned pretax profits of $2 million on sales of $6 million, making it one of the rare software brand names from Eastern Europe to make its mark abroad.

CLEAN AND SIMPLE. What Bojar had going for him was Hungary's engineering heritage--and the limitations that backward technology placed on him. As a mathematician at a state institute in the 1970s, he learned to write extremely compact computer instructions. Russian-built Ryad computers broke down often, and because of export restrictions, the only reliable Western machines available to run the programs were programmable calculators and home computers. That meant that each program had to be extremely well thought-out and efficient so it could operate on machines with limited memory.

Now, that talent is paying off. Bojar was able to combine three-dimensional modeling, two-dimensional drafting, and other complex features in the same personal-computer package, while many less-efficient Western programmers could accomplish such feats only by splitting them up. The result: ArchiCAD has grabbed 30% of the global market for architectural programs on Macintosh computers. It even outsells powerhouse

Autodesk Inc. of Sausalito, Calif., and Apple's own Claris software unit.

Boja r started on the road to Graphisoft back in 1982, when he and a partner designed a 3-D program on an aging Hewlett-Packard Co. computer. The assignment, for Hungary's Energy Ministry, showed that the pipes in a Soviet-designed nuclear-power plant didn't fit together. In 1983, the program got rave reviews at a Munich trade fair. That's where Apple executives spotted it. They encouraged Boja r to rewrite it for their computers and also advised him to tailor it for architects. Sales took off in 1988, after Apple helped Bojar sign up Western distributors such as Soule.

Bojar had little choice but to go West. Hungary had a huge gray market for clones of the IBM PC, but there were almost no local Macintosh users to sell to. That was a big handicap, since software developers usually depend on feedback from local customers before venturing abroad. So Bojar sent programmers to foreign trade shows to learn what they were missing out on at home. Then, once Western technology-export rules eased in 1990, he started seeding the Hungarian market by selling Apple computers through a Graphisoft subsidiary. Hardware sales brought in $3.5 million in 1992 and are expected to grow about 40% this year.

Bojar's biggest not-so-secret weapon is his staff of 30 developers. Annual salaries averaging $30,000--less than half of U.S. rates--allow him to focus enormous talent on a tiny niche, which Western companies can't match. "If we don't watch out, guys like Graphisoft could eat away at our base," concedes an Autodesk marketing manager.

'WE LEARNED.' Another asset is Bojar's ongoing relationship with Apple. From working with the computer maker, he says, "we learned how to run an international marketing company." Last year, on Apple's advice, he started setting up regional operations to manage distributors in 45 countries.

Bojar will soon face his biggest test. To keep growing, Graphisoft will launch a version of ArchiCAD next summer for the huge but cutthroat IBM PC market. By entering the $125 million market for architectural programs for the PC, Boja r will go head-to-head with such U.S. giants as Autodesk, IBM, and Intergraph. To prepare, Bojar plans to raise up to $6 million this spring by selling a stake in Graphisoft, now owned by himself and 18 employees, to outsiders. This time, though, there won't be any state agents hanging around to watch how he spends the money.

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