Max, in 2016 you and your three co-founders pitched evopark in “Die Höhle der Löwen”, the German version of Shark Tank. What was your idea back then?
Our idea back then was to build a large network of parking garages, which you can access without pulling a ticket. We sent out a small RFID card to our registered users. The card is wirelessly recognized upon entering and exiting the garages without leaving your hands from the wheel. This technology makes parking very seamless. No more hassle of pulling a ticket or having cash on hand for the cashier machine. Customers were invoiced monthly and collected parking fees were transferred to our partner parking garages. You could even receive parking credits by shopping at local retailers. We were a clear business to consumer platform business.
Unfortunately you did not receive a funding from one of the investors, however your appearance brought attention. How did this pay out?
We received a lot of media attention and customer base grew a lot at the day of the airing of the show and the days afterwards. Parking is unfortunately a low involvement product, so it was great that at least for some days people were discussing our solution and we got many referral signups.
The publicity also helped us in acquiring new partner for the platform and garage operators directly addressed us for joining the network.
Looking at evopark from a product perspective, you guys ultimately turned into a SaaS company rather than chasing the initial idea of offering a parking card for Germany. When did you realize that you need to shift your focus?
Marketing for a low involvement product like a parking card is very expensive. Not many people find themselves lying on the sofa and get excited about signing up for a parking app. Furthermore, scaling the network on the garage operator side takes a long time due to the infrastructure/technical requirements and for financial reasons. Overall, it was not possible to scale fast enough with the funds at hand to make the case work. In the process of scaling this platform, we recognized that mobility providers like large OEMs (Porsche etc.) were eager to use this digital network of parking garages. At the same time, parking garage operators had many manual and cumbersome processes in place and asked us to help them for example in managing of contract parkers with a new software. So, we decided to concentrate on these two customer groups and turn evopark into a B2B business, switching the focus on profitability instead of growth.
How did this pivot align with the strategic intentions of your investors? Did they stay in?
We were always aligned with our investors. In the process of the transition, we figured out that selling SAAS to parking garage operators needs a strong international sales organization. Coincidently, the leading parking system manufacturer and a longtime partner of evopark, Scheidt & Bachmann, wanted to increase their footprint in digital solutions for their existing parking garage operator clients. So it was a great win-win situation, when Scheidt & Bachmann acquired the majority stake in evopark and made evopark central to their parking digitalization strategy.
In the end, pivoting your business paid off for you and your co-founders, as you’ve been able to exit evopark. What are your lessons learned from the pivot?
The first thing is to not be afraid to change. Such decisions shouldn’t be postponed until it is too late. It is frightening at first as you have to start from the beginning again. But if the known is not working out, the only way forward is to find a different approach even though it might have more unknown factors.
The second thing is never to underestimate the implications of a pivot on your organization and the people working for it. Expectations, job profiles and the organizational structure will change. Some people will take the leap. Some won’t. This is totally normal. But in the time of a pivot you should definitely overcommunicate, set clear expectations for everyone in the organization and be decisive.
What one piece of advice would you give other founders, who are somehow stuck with their product?
You should ask yourself and your customers what single thing makes your product outstanding. Products are often get convoluted with features. Product market fit often lies in nailing one thing and not a full-blown list of features. This exercise doesn’t only help in decluttering your product but also makes your product easily communicable to future prospects.