Lars is the founder and CEO of EVOTAG, which is a real life gaming startup who combines the excitement of gaming with physical activity, collaboration and fresh air.
Lars has a background as an IT civil engineer from DTU and, before EVOTAG, worked for 15 years in several large companies in various roles, from IT architect, consultant and manager.
EVOTAG is his first startup and it was only when Lars was around 40 years old that he got the right idea that stuck around long enough for him to jump into the life as startup founder .
This is the story of how EVOTAG started, became aware that they can actually have a greater societal impact, found customers they didn’t think they had and what has made them now look to expand abroad.
The beginning
How did the idea that would become EVOTAG come about?
I have never worked with entrepreneurship before, but I thought that if the right idea came, I would like to become an entrepreneur.
The idea for EVOTAG arose when I was at the Langelands Festival with the family. We played laser tag on an outdoor court and it was really fun and the whole family had a blast. When my son had his birthday, I thought that such a game would be a good present.
I was researching what was available on the market. I found that I could either get some cheap junk from the toy store or some very expensive professional equipment. There wasn’t something that hit in between.
It is probably the engineer in me that made me start thinking that it must be possible to get good performance as you get with the expensive equipment, but just make it much cheaper.
That’s how it all started.
From hardware idea to social impact vision
What is your vision?
Today, the overall vision is to create fun and good gaming experiences while you are physically active.
Last time I checked, EVOTAG users had moved +40,000 km, which is the equivalent of running around the world.
Being physically active wasn’t the primary focus from the start, where it was mostly about being able to play a fun game. But the vision of helping kids to be physically active has continuously developed and gained more focus. I myself have always appreciated being physically active – and we also discovered that it was an important parameter for our customers.
We can see that children who may have been difficult to activate around other games are now running around outside and coming in out of breath and with red cheeks. Another meaningful insight is that we can offer children and young people with special needs something that they can relate to. They may find it difficult to be social and playing football with others can be difficult.
They are used to play computer games. It is an environment and framework they know and are comfortable with, so we can now include them because we combine physical activity, team work and gaming.
Our vision has developed from being a technical and geeky hobby project with a focus on making a laser tag game cheaper, to having a social impact and make a difference for a lot of children and young people.
Getting started
What was the first thing you did after you had the idea for EVOTAG?
I had done a bit of market research because I just wanted to buy and not make the product myself. But when I couldn’t find anything, I started the development.
I knew I could build an app myself, but the hardware part was more of a challenge. I bought some Arduino kits and tested the possibilities.
My first challenge was could I build something that could shoot an infrared beam about 100m? If I could do that, it was my hypothesis, I would most likely be able to build something that would work.
I started building a prototype with wood, tape, rubber bands and plastic pipes from the construction market.
I had to find ways to lower the price and to do that, the hardware has to be much simpler.
My approach was that everyone has a smartphone in their pocket and since I know programming, I could probably program an app so I could take everything expensive and complicated from the hardware and put it into the smartphone. The hardware had to be as “stupid” and thus as cheap as possible.
We started by “just” wanting to make a cheaper laser tag, but when we started building the app we thought: ” Hey let’s make a cool game too”. We know how attractive games, such as Fortnite and Counter Strike, can be.
I’ve also played computer games myself since I bought an Amiga 500, so I know how it feels to get caught up in a game. If we could take the experience that a computer game can create and bring it into reality with a laser tag product? Then we would get hold of something really exciting!
Testing and Customer and Market Validation
What did you do to validate the need for your product?
In addition to investigating what existing products were on the market, I also looked at crowdfunding projects. Who made something similar. There were some projects that resembled what I was looking for, but they hadn’t managed to build anything that worked.
I could see from the crowdfunding projects that there was interest and I was pretty sure some would buy the product if it was built well enough and at a low enough price.
It may sound arrogant, but my approach was like this. There is no one who doubts that Call of Duty or Fortnite are successful. And there is no one who doubts that laser tag that has been around since the 80s and is still popular is a successful concept. So, conceptually I was sure, but what I had doubts about was whether people would want to run around playing with their smartphone.
That was one of the things we quickly got tested. How could we make it easy to run with your phone? We were lucky that others had developed wristbands for runners and people in gyms.
We basically took known technologies and combined them. A smartphone, a fitness wristband to hold the smartphone and built a laser tag using an Arduino and 3D printing.
In itself, the technology is not particularly exciting, but put together, it can do something new.
That’s also the whole product idea and philosophy. Our goal was to get the price down, so we have to find all the shortcuts and to do that existing technology is best.
Maybe you want to read more about Market and Customer validation for startups here
No “Mickey Mouse” numbers
What about more traditional market analysis?
I didn’t spend time on “Mickey Mouse” numbers where the market numbers are inflated so much that it is not realistic. Most people involved in startups and business development know that type of numbers.
For us, it could be taking the number of gamers in the world, multiplying by some “random” numbers and then concluding that if we can just get 1% of the market, then we would get a gigantic number.
But it’s my opinion that it’s a waste of time.
We knew that people would like to play laser tag, but before we could present people with a realistic product and a price. There was much uncertainty as to whether people would actually buy it and we wanted to avoid getting false positive feedback. And when, on top of that, it is a hardware product, then people will have to see something that is more than the completely scratched prototype.
Alone you move quick, together you get far. And remember that salesperson!
How did you build the EVOTAG team?
I quit my job in February 2020 and as one of the first things I went to Seedster with Jesper Buch and Co. Right after Denmark was closed due to Covid-19!
I have not previously started my own business, but I was absolutely sure that I should not do it alone. Jack, who I knew from before, joined as co-founder. I worked with Jack and I knew he liked gaming , played hardball and had taught at a sports school. Fortunately, he was on immediately.
We also tried to find a developer who could be a co-founder, but we never found the right one, so I pulled up the sleeves and started coding.
In addition, we were looking for a third profile that would focus on sales and business development. This is clearly the most important learning I will take with me if I have to start something up again.
Get a co-founder from the start who focuses on sales and marketing.
We started a company without anyone on the team having experience in selling a product. Probably the classic engineering mistake, where you think: “If we just make a great product, it will sell itself?” Nope, it just never works that way.
Sales is King
Sales is really difficult and is a special discipline. It is a very broad subject that requires many different skills, which are both difficult to find in one person and also make it difficult to buy you the skills through consultants. You will spend a lot of money and it is associated with a high risk of not getting enough out of the money.
We therefore had to familiarize ourselves with the basics of how, for example, Facebook advertising works and how to build a webshop, so we could get started.
We launched an app and started collecting feedback.
At first our focus was on getting the technical stuff working and it was only then we started on the more commercial things. We should have started much earlier on the commercial side seen in the clear light of hindsight,
New target group and the importance of network effects
We were absolutely sure that we made a BtC product. Private customers would buy a set of two from our webshop. It turned out not to be entirely true.
We had clearly underestimated how important the network effect is with our product, where the value increases with the numberof users.
The more people using our product the higher the value. It requires volume and that you get a “snowball effect” going. And to create that, we are back to the important commercial and sales focus that Jack and I, as engineers, must say we underestimated.
It was a good thing we didn’t know how difficult it would be, because then we would probably have thrown in the towel.
What happened was that we could see from our sales data that some more of our customers were not private, but employees of youth institutions.
They are an exciting target group because they don’t buy one or two, but 10 or more. We had succeeded in working to secure a competitive price, so it was also attractive to this segment.
It is a super interesting area and that is also the reason why Thomas joined as co-founder. He has a special focus on selling to this BtG or public market and it soon became our primary market.
In retrospect, it makes a lot of sense. Our price is competitive, they do not have the challenge of finding someone to play with because there are a lot of children and young people gathered in the club. And then they typically also have a good place to play.
Time to pivot?
What did you do when you got that insight?
We realized it was time to pivot and focus more on BtG and selling +10 products at a time instead of BtC . This is also where EVOTAG comes into its own right, because it is after all more fun to play 5 vs. 5, instead of 1 vs. 1.
We hadn’t done anything special to target this new group, but those who worked in the institutions saw our Facebook ads, but instead of buying for themselves, they bought for their work. We had caught a completely different fish than we had been fishing for. But by looking at our sales data, we have been able to change our focus and from there scale what works.
BtC is not closed to us, but it requires a different setup than the one we have today. One thing we have learned from other games like PokemonGo is that there must be something to do daily in the app or like Fortnite , where there is always someone to play with no matter when you log in.
We are different because you have to meet physically to play. Going forward, we must ensure that EVOTAG is relevant even if you have no one else to play with right now. It is a universe we are in the process of building.
Experienced professionals vs young graduate
What are the advantages and disadvantages of being an entrepreneur with a lot of business experience?
Good question. There are clearly some advantages to knowing something about the very basic things running a business. It can be how you make a realistic budget, what you need to pay attention to when making supplier agreements and contracts. I have also used my experience in selling projects when I have prepared presentations for investors.
But there are clearly also some disadvantages. Younger people have so much fire in their ass that they cannot be contained.
There we can be more restrained and not quite so wild. But we believe that what we lose in speed and wildness we gain by making fewer bad decisions.
We may only drive at 110 km per hour and not 200, but we do not drive over the cliff.
Stay agile
I have also seen my share of things from large companies that we will never use in EVOTAG.
Just to name a few: The year wheel, HR and finance processes with stage gate models and heavy approval procedure. There is so much administration involved and it requires so many resources that different people who have no contact with either the product or the customer have to be involved.
Even though we as a company are growing and becoming more mature, there are some clear don’ts .
The reason is simple. You lose a lot of agility and speed. This is also why startups can take market share from large companies. They can act much faster and change direction depending on what works and reason with the customers.
We have had many talks and discussions about what makes EVOTAG unique. In principle, everyone can do it, but no one has done it. If you have the money and know-how, you would be able to build something similar within a few years, but there is no one like the established ones who is going to do it.
I have sat in large companies and managed project portfolios and there are always fewer resources than projects. And the projects that are approved have fewer resources to achieve the goals that are expected. So when you come up with the brilliant idea no. 2, resources must be allocated from the other projects, which may already be behind.
Getting the brilliant idea through the QA processor and getting the support of all the people needed is almost impossible.
Fuel for the growth engine.
What about funding?
Something that has been of great importance to us is the support from the Innovation Fund. After being bootstrapped and using our own money, we got support through the InnoFounder Experience program. At the same time, we also won DGI Impact. Having two wins made it easier for us to find investors.
We had come a long way, but could see that a webshop and some Facebook advertising could not generate enough sales quickly enough for us to grow organically. Therefore, we began to investigate the possibilities of getting investors onboard.
We looked around in the Danish investor environment, sent our pitch deck around and participated in various pitch events to get some speaking time with potential investors. We were interested in getting so-called smart money, where investors can contribute with more than “just” the money. It wasn’t easy because we are a hybrid between a computer game and a toy.
In the process we learned that the element around having a health and social impact by getting children and young people out and being physically active was important. I am convinced that if we had only focused on EVOTAG being fun, we would not have been able to engage the investors.
Raising capital is time-consuming and heavy. There is a rule of thumb that it takes 6 months to fundraise and it has worked for us every single time.
We participated in a DANBAN pitch event, which created the contacts that meant that today we have a group of investors who primarily come from the DANBAN network. It gave us the opportunity to hire the first employee and start building the team.
Hardware: blessing or curse
What feedback did you get on including a hardware component in the product?
Nobody thought that it was a good idea. Why couldn’t we just make a pure software product and throw in a subscription? Then you take the annual turnover and multiply by 15 and then you have the valuation . SaaS is “easy” and investors know and prefer it.
But the “difficult” part with hardware is both what makes us unique and what also makes it difficult for others to copy what we offer. For the very reasons that caused most investors we spoke to to say no, other startups will also get a no.
It gives us a head start and when you have purchased our hardware and know our games and operating system, it creates entry barriers for others and a stickiness so you don’t just switch to someone else. This means that we can hold on to our customer group in a completely different way than if it were purely software.
Looking into the crystal ball
What’s going to happen now?
We are scaling what works, building our processes for international sales and developing our EVOTAG universe. We not only focus on Denmark, but also Norway and Germany. Norway is an interesting market for us because they are much more active outside than we are in Denmark. And they have purchasing power. Not a bad mix for us.
We are in the process of building our setup and processes for international sales and when we can enter one foreign market, we can also enter three or 10.
More people need to use EVOTAG and they need to do it more often. That’s why we put all our development resources in the EVOTAG universe, so there’s always something to do in the app – even if there might not be anyone to play with, like in PokemonGO.
Combined with the BtC market we haven’t cracked the code on yet, we’re looking forward to something that can get really wild.
Read more about EVOTAG here
