One million simulations played, next million to go: learnings from Michael Bodekaer, Co-founder of Labster
Emerge’s extensive network gives me the opportunity to share learnings from some of the most successful edtech entrepreneurs around the world. This month in my ongoing series of inspiring founder interviews, Michael Bodekaer, co-founder of Labster, shares his journey to their first million simulations played by users, as well as his insights on how to pitch to investors, overcome the challenges of selling into edtech, and what makes a good entrepreneur.
Take time to reflect as you read — these are purposeful long-form interviews. Why? Because we believe “there are no shortcuts to knowledge” (Ben Horowitz) and that “sometimes taking time is actually a shortcut” (Haruki Murakami). So go on — make a coffee, sit back, indulge yourself.
Here are some highlights from the interview
💗 Choose passion: You really have to ask yourself why you want to be an entrepreneur. Pick a field you’re really passionate about, because it’s insanely hard and you’re going to have to be ready.
👂 Focus relentlessly on customers: You have to understand and listen to them. Focus on your customers and talk to them all the time.
🧠 Personal development to overcome mental challenges: You will be bombarded with challenges non-stop, and if you’re not ready to cope with that mentally, you will go bananas.
Read on for the story behind why Michael thought “Why don’t we take some of that incredible innovation happening in the gaming industry and bring that into education” — and made it work.
It has gone pretty well for you, Michael. How well?
Obviously, you can measure success in many different ways. There are two sides to Labster — one is very impact-driven. We’re ultimately about transforming education globally, so we measure how many students we reach. For that metric, we have quadrupled our growth in the last year, reaching one million simulations played and we’re hoping for the same thing this year, which is obviously super exciting.
The other way that we measure success is our growth as a business. We are very aware that if we want to make a huge impact in the world, we must be a sustainable and growing business. Our revenue last year also grew dramatically, which helped us close a Series B round of funding. We raised $21.3 million with some amazing investors, among them Owl in the US and Educapital in Europe.
We were oversubscribed in this round and raised more than we were planning to, which shows us that investors believe in our story, where we are on a path to building a platform to transform education globally.
Want to see the VCs investing in European edtech? Check out Emerge’s new Investor Identifier tool.
What is your one-line elevator pitch for Labster?
I would say that it’s just like a flight simulator, but for science education — that’s the really short pitch.
When we pitch to investors, it’s a little broader than that — it’s a flight simulator for all education, globally. What we’re doing is building a platform to transform education around the world.
Also, our one-line elevator pitch for new team members is that we’re empowering the next generation of scientists to change the world. That’s really how we see ourselves every day, we want to inspire more students in the world to solve global problems and give them the tools to do so.
So how did it all start?
I’ve been an entrepreneur since I was 16, which is almost 20 years ago. I did work as a consultant for a few years, but I realised quickly that I am an entrepreneur at heart and I want to work in the industry of creating businesses that have a positive impact.
I really realised this when I started working in the corporate world. I worked there for two years, enjoyed it a lot, learned a ton, and it was really good for me to go through that experience, but the biggest learning for me was that I lost my passion. I woke up in the morning, and I wasn’t excited and ready to go to work, which was a whole new feeling for me. I have never in my life experienced that lack of drive and passion. That’s when I realised that I have to work in a field I’m passionate about, where I can see the impact on the people that I work with, but also the customers that we have. Having that positive feedback from the customers is very motivating for me.
Why did you decide to become an entrepreneur?
I was always an entrepreneur and I was always super excited and passionate about my work, because you can choose what field you want to work in, and if you don’t like it, you can stop and create another company. I did that a few times to really understand my core passion.
It must have been exciting. What has been the best thing about running your own company?
One of the most motivating parts of my job is when students email us and tell us stories about being inspired by using Labster, how now they finally understand the topics, or how they now find it super exciting to learn about science.
There’s an email I got just a few days ago, in which a student told me that she had come up with a new idea for curing Parkinson’s disease and that she’s been explaining it to doctors and experts in the field, even though she’s still a student. Apparently, it’s not a perfect idea, but all of the experts were wondering if she’s a professor, because she had all that knowledge, and she had to explain to them that she learned it using Labster simulations.
For me, our dream is to empower the next generation of scientists to change the world. My ultimate dream is that 10–15 years from now, the Nobel prize winner who has solved global warming, or cured all cancers or similar, goes up on stage and tells the audience that it all started with playing on Labster and that they got so inspired and gained confidence in their own abilities to solve really big global challenges. I strongly believe we can get there.
A part of me also simply wants to make sure that the planet survives, I like to live on this planet, I would love for it to not be destroyed. I think we really need great minds to solve that. I won’t be able to solve all that alone, so I hope that I can inspire thousands of young bright minds to do it.
There are always challenges to overcome for a growing business. What has been the most difficult aspect of the entrepreneurial journey for you?
For me, the least favourite part is the challenges around having to let go of people, because, especially in a startup, you have such personal relationships with everyone, so it’s always a challenge when you have to make those hard decisions. I don’t think I’ll ever get good at it, it gets more manageable, but it’s always the hardest part of it to me, because I care so much about my colleagues.
We had a few times when we had to close down a project that we thought would work, but after a year we could see it wouldn’t work, so we had to let go of three people who had been trying out that idea. The decision to try that out was mine, I hired those people, I believed we could do it. Having to admit I was wrong and to let go of three people was really tough.
Can you take us back to where the idea for the company came from?
The specific idea for Labster came up when I realised how many of my fellow students found their studies boring. My co-founder Mads, who was teaching biology at another university in Denmark, had trouble engaging students, even with something as exciting as genetics, and altering DNA and other super exciting topics.
Both of us were confused about why people wouldn’t be excited about learning. We thought it was so important to make education more exciting. At the same time, I had some previous experience in the gaming industry as I had founded a gaming platform company. I saw how we were investing billions of dollars every single year into games that are incredibly addictive and incredibly fun. I thought “Why don’t we take some of that incredible innovation happening in the gaming industry and bring that into education?”.
As I went deeper into the education industry and tried to understand why no one had done that before, I found that the profit potential in the education industry is much more challenging. This is especially so if you want to create education games because you don’t have to create just one game for a billion users, you have to create hundreds of different games on different topics, so it’s very expensive to build.
The only way that I could see that we could solve it was to find a way to bring all that innovation from the gaming industry and bridge it into the education industry by creating a platform that makes it very easy, super fast and cost-efficient to produce high-quality learning games.
We did this by automating 99% of the whole process, and that’s what we build at Labster. Many people don’t see it when they look at Labster, but behind the scenes, there’s a gigantic cloud-based server infrastructure that’s automating the production of the simulations, so we’re really a simulation production automation platform company. That was the core idea, and it came from me realising that no one had built really great games for education, because it is so expensive and it’s a relatively smaller market per game.
My cofounder was a teacher of biotechnology, so he had first-hand experience in a very concrete topic, so we joined forces to apply the idea to biotechnology first. We built a simulation for biotechnology, because there’s a big need, and it’s very expensive. Now we’re using the same idea, but covering chemistry, physics, engineering, nursing, healthcare, etc.
The first game (we call them simulations) we built took us 9 months to create, and today we have some simulations being built in one week. The average is around 1–2 months now, and it’s going down every month, depending on how complex they are. We even have people creating simulations simply with “drag and drop” style builds, no coding experience required. That’s the big vision we’ve always had.
Thinking over the last few years, what would you pick out as the key milestones you think happened to get to where you are today?
- Platform technology to scale. One really key moment was when we launched the game that we built on this new technology, and it took a long time. We essentially invented a new programming language, we defined how learning is done in a virtual world, we did a lot of innovation. At some point we said “ok, now we have to launch”. We ran a test with 70 students and we were measuring it against other students, who were having just normal classroom education, and the results were mind-bogglingly positive. If the teacher would first play our virtual labs e.g. as homework and then have follow-up lectures, the learning outcomes were doubled. If they only used the virtual labs, the students learned 70% more than within a typical classroom lecture.
- Research study documenting impact. Our results were later published in Nature magazine, which is a big deal in the education field. It’s especially important because teachers don’t believe your sales pitch, you can tell them as many stories as you want, they want strong evidence that it works, which is what we got from that study.
- Insider builder tool. We launched our insider builder tool where we used that to create simulations really fast. This greatly helped us increase our production capacity and ability to serve many more partners, so this was also a key moment.
Getting to “market-product fit” is essential for the success of any business. How do you think you knew you had achieved this? What were you measuring to know you had ‘got there’?
We have a very positive retention rate. In fact, we have negative churn, that means that customers not only stay with us, they buy more. Once they start using Labster, they want to use it for more students and more courses, which is probably the best indicator you can have that there’s a product-market fit.
The other factor is our NPS, which is really high for the education industry. We interview our teachers on a quarterly basis, and we also get very positive feedback there.
The first time I thought we had product-market fit was when the research study was published in Nature magazine and really showed the big impact that the simulations have. But we realised that to really have product-market fit, you need more than just a few simulations, you need entire courses, really big packs of content. That way, teachers don’t have more work with adopting your product, but it is actually easier for them and requires less work, when they start using Labster.
It wasn’t until 2–3 years in that we realised that it was only the really innovative teachers who wanted to try new stuff, who didn’t mind spending their weekends preparing everything that were adopting Labster. That’s not product-market fit.
We had to work very hard to make the product much simpler, easier to use, easier to adopt in the classroom. We do that to this day. Every single quarter, we continuously interview teachers to understand how we can keep making it easier for them. Most recently, we launched a very advanced grading system, so that grading for 10, or even 20 different simulations can be done. The teachers can decide the algorithm they want to use for grading, but it’s fully automated, so it’s a big win for the teachers’ workload.
Making an impact is really important in education. How do you measure yours?
The number of students is one that is really important to us. That also relates to revenue.
And then, of course, the NPS for both students and teachers is also really important for us. If teachers don’t love our product, we won’t have any impact. The true impact is really the love that the teachers have for our product, because that will lead them to recommend to other teachers, which will lead us to have an impact in the long run. If we can get teachers to not just like us, but love us, then we’ll have a big impact.
You have done well against a background where everyone says that selling in the edtech market is really hard — how did you do it?
It’s really hard. This is actually my fourth company and the education market is by far the hardest market to sell in from my experience, but it’s also the one I’m most passionate about making work due to the big impact. What we’ve done is basically to continuously try out new ways of doing things. Every quarter, we would reflect on what worked, what didn’t work and we would try new initiatives.
We tried selling online, tried field sales, calling teachers directly, selling directly to students, tried to have more teachers refer us, engaging them at conferences. I even tried a TED Talk, which was a big success with over a million views. We simply tried tons of different things and to this day we keep trying new ideas to continue to innovate on our business model — production innovation alone is not enough.
I think it’s a different story for every edtech product, some use freemium models, others use paid models so I don’t think there’s one right answer. I think it’s important that people keep experimenting, talking to teachers, getting feedback from the market and adjusting pricing.
Part of your journey involved raising investment — what did you learn from that?
This is the third time I’ve raised investment and I realised how important a gigantic market is. The story is really important, because if you want venture investment, they need to believe that you can become a billion-dollar company, because only a few of their investments succeed statistically speaking.
Understanding that and really understanding how investors think, really helped us tailor the story that we tell, so that they can better understand our business in the way that they look at a business. I could talk for hours about the impact that we’re having, and that’s great, but for an investor, at the end of the day, they have to believe that there’s a return on investment — in addition to the impact.
Being able to fully understand that through simply asking investors about how they think, what the important factors are for them and what are the metrics they look at, has been super helpful for us. The story then came relatively easily out of that.
I worked at McKinsey, and I’d done M&A deals, so I had a lot of experience that I could leverage there as well. Bringing in that experience to tell a clear story that appeals to the investors and VC was the biggest learning. I feel it also helps me think about the business more clearly, so I have a much more clear way of communicating our investment story and bridging the impact and the investment story. They are two separate stories, but they’re really interlinked, which I think is a really important element in education if you want to succeed.
The challenging part I see in education is that it is a relatively smaller market compared to many other businesses. Obviously it depends on the business, so I’m not going to generalise, but in my experience from selling for other software companies, your market is often every single company in the world. But in education, your market might be every teacher, but it’s actually every science teacher, or maybe every biology teacher, so you start understanding that the market you’re after is actually really small. That makes it much more difficult to tell a story to investors and make it believable enough that the market you’re aiming for is actually big enough. And getting that story right is really important.
If you had to pass on 3 golden rules for aspiring or current entrepreneurs, what would they be?
Back in the day I had a dream that everyone should be an entrepreneur and try to create their own company and that that was the best way to live. I learned that that’s actually really bad advice, being an entrepreneur is not for everyone, so for aspiring entrepreneurs:
- Choose passion: You really have to ask yourself why you want to be an entrepreneur. Because if it’s for the money, which it is for many people, there are much better ways to get a lot of money, or less risky ways at least. If it is about being really passionate about solving a problem, and you don’t mind working really hard every day doing that, then I think it’s a great thing to do. Pick a field you’re really passionate about, because it’s insanely hard and you’re going to have to be ready for that.
- Focus relentlessly on customers: I say it from my own experience, you have to talk to customers all the time. You have to understand and listen to them. I got surprised yesterday, I had a meeting with some university partners, and it turns out that in specific cases our login process was too complicated for students and we have to fix that fast. I had not seen that, because for me, it’s just “click, click, click”, but if you have 300 students in VR headsets, it’s actually a lot of work. So you should really be focusing on the customers and talking to them all the time. At my first companies, I would even sit at the customers’ place, literally asking them for an office desk and offering to pay, so I can sit next to them and work on my project closely with them.
- Personal development to overcome mental challenges: People like Anthony Robbins, or Brendon Burchard, listen to these guys or read books on how to overcome challenges. I also love Stoicism, for instance, there’s really good mental concepts in the stoic philosophy. The key point is to realize that you will be bombarded with challenges non-stop, and if you’re not ready to cope with that mentally, you will go bananas. I work really hard, but it’s not stressful for me anymore, because I’ve learned to deal with those incoming things in an insanely effective and structured mental process I’ve basically “programmed” into my mind. In the past, even if I wasn’t working hard, if I just had a personal issue with a colleague, or if I had to let someone go, or something like that, I would sometimes not be able to sleep for days. That was the most stressful parts of my entrepreneurial journey. What helped me was to continuously work on personal development, so I would highly recommend that.
As regards learning from others, is there one course or book you think everyone should take/do that has helped you?
At the moment I like a book called A Guide to the Good Life by William B. Irvine. It helped me a lot in the mental aspect.
In terms of running the company, I really liked Principles: Life and Work, which is a new book by Ray Dalio. I like how very methodical he is in how he outlines the core principles of his company. The principles are a little bit different for my company, but the idea of writing clear principles that are much more detailed, beyond just having values, that you can communicate to the whole company, is really powerful — and scalable!
In terms of the key components that founders need to succeed, Emerge focus on the right network, core expertise and access to capital. Which parts were critical to you early on?
In the early stages, I would recommend to have as low a burn rate as possible. I lived off of nothing really. In the beginning, I lived in dorms, got breakfast, lunch and dinner from the same local pizzeria every day. I think it’s important to get through the first stages without too much dilution, and having a low burn allows you to get that first product-market fit before raising capital.
But then I would say the expertise which we get through our investors’ network, has been invaluable. I’ve had so many challenges in the past that I could have skipped if I talked more to smart advisors. I wish I had done that a lot more. It’s something I do today, and I recommend everyone to use their network more and talk to new people all the time to learn from them.
So, Michael, what’s the next big goal for you?
We want to empower a million more students to change the world. The goal really is to scale. As a company we have now reached a stage where we need to put the pedal to the metal and grow incredibly fast, without losing the culture, the core of our business, the trust we have from our customers and our high overall engagement.
Internally, when we present we always have a picture of a million students to show our team what a million students look like in real life, and then ask all of them to imagine us giving all of them an outstanding high-quality education. We call it our impact-o-meter and we measure how we’re progressing towards that mission of another million students — that’s what drives us all.
This interview was kindly given by Michael Bodekaer, co-founder of Labster to Nic Newman, Partner at Emerge Education.
