André Eriksen Interview (Asetek Founder & CEO)

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I had the chance to speak with André Eriksen, Founder & CEO of Asetek.

He shares his journey from a toolmaker and engineer to establishing Asetek, a company that revolutionized PC cooling with its integrated liquid cooling systems.

He also delves into his transition from PC cooling to sim racing products, highlighting the overlap in skills and customer base between the two domains.

He emphasizes the company’s focus on creating sim racing products that authentically replicate real race car experiences, rather than only appealing to sim racers.

André also touches on the challenges of competing in a market with rising competition and price pressures, while maintaining a commitment to quality and service.

Flow Racers Interview With André Eriksen

*I have lightly edited what was said on both sides for brevity and clarity*

RO:

André, tell me about your beginnings, pre-Asetek.

AE:

Wow, that’s a long time back! Well, I was a toolmaker by education and more or less right after that I started to study engineering and became an engineer. Then I worked for Danfoss, which is Denmark’s largest industry corporation, in their management trainee program.

Then I got bored, and then I started Asetek, so that’s basically what I’ve been doing for the last 25 years.

RO:

And with Asetek, explain. You guys are very dominant in your market, obviously because of innovation, but how did that innovation come about?

AE:

Well, that was because I made a compressor cooling system for PC called VapoChill

It was very advanced, very expensive and very difficult, but because of that, I got in contact with the right people and realized there was a market for liquid cooling – where the end users should not mess around with water themselves and cut the tubes and everything.

We basically integrated everything into one unit, and now, we’ve sold more than 10 million of them.

RO:

And from there, it might seem like a bit of a jump to enter sim racing from, let’s say, the PC market. How is that jump made?

AE:

It is and it isn’t, and let me start why it isn’t, because what we do at Asetek today – or pre sim sport – liquid cooling, it’s mechatronics.

You have software, you have hardware, you have mechanical engineering, you have simulation. I mean everything that you have in a simulator, you also have in a liquid cooler, obviously you don’t have liquid inside a simulator, but the skillset from my team is the same.

So, we basically have the same people.

Right now, we have the same people working on liquid cooling one week and sim sports the other week, so there’s actually a very big fit there, and while you could say that not every gamer has a simulator, you can also say every simulator driver, sim racer, actually has got a PC.

Some are obviously using consoles, but a lot of them have gaming PCs, and a lot of them actually have our liquid cooling already.

So, there’s also an overlap in customers, but for sure, where there isn’t, the market’s totally different.

On the liquid cooling, we are not really engaging with end users, we are selling OEM to big names like Asus and Dell, Alienware, et cetera.

In sim racing, we are engaging with resellers and with end users, so strategically it’s different.

But at the end of the day, I’ve been racing for many years myself. My kids have been racing, my son is still racing. So I built my first simulator many years ago. It was actually based on Daniil Kvyat, the Formula One driver. It was based on his Formula Three chassis.

So we used the simulator for real life testing and training, not so much for sim racing against others, it was simply to learn new tracks and techniques, et cetera.

And then I think, I don’t know, around 2018 we built an eSports academy at Asetek, where we would invite young people who could not necessarily afford a gaming PC themselves to come to us and game, and we would help them and instruct them.

It was mainly first-person shooter games, but then because of my racing heritage, I was also like, “why don’t we put in some driving sims?”

So we bought five simulators from one of our current competitors, and the quality was just really bad. It fell apart constantly, we were never able to have five simulators running at the same time, terrible customer service, et cetera.

And that’s actually what inspired me to say, “I think we can do this better.”

I think there is a hole in the market for a sim racing product that feel more like a real car, a real race car where you can have a proper customer service and also quality, like in our liquid cooling business where, I mean, we are not perfect, nobody is, but in the longer scheme of things, longer term, I think the quality we have on liquid cooling should be the same as you will see in our sim racing products.

So that was the beginning.

RO:

Can you tell me a bit about your racing background? How did you get into it?

AE:

Yeah. So when I was a kid, I was actually racing motocross, but my parents couldn’t really afford it. So I did all the classics, as a newspaper boy and wiping the floor at a factory, I did everything I could to afford it.

I think I was halfway decent also, but I just didn’t have the money to really do it, and then since then, I’ve always been interested in racing, and then when I moved to the US in 2007, a good friend of mine took me to the karting track in Sonoma.

Before I was home, I had bought a helmet and shoes and gloves, and suit and a go-kart, and soon thereafter, I hired a former professional go-kart driver as a coach, and then I bought one more go-kart, one for him also.

I told him, “now you need to teach me how to drive”, and then I think it was only a year after I won the Northern California Series and did the US Nationals, then after that I started to drive formula cars.

I did that for a while, and I think my best was… championship wise, I won a lot of races, but I think my best was a second place in a championship.

Remember, my kids were really small at the time. We used to live in Denmark, we had moved to the US, so no family, no friends, just the company.

So, there was a lot of free time. So I was really into racing. I spent a lot of money on racing. And then my kids grew older, both of them started to race go-karts. My daughter stopped racing go-karts because she thought I was yelling too much at her. I’m so happy.

RO:

Expensive kids!

AE:

Yes, I don’t think so, but apparently. But I am so happy and thankful for that today because if I had two kids that were racing, then I would be in bankruptcy!

So, then my son [Valdemar Eriksen] started racing and he’s kept at it, and he’s now driving LMP3, and my daughter is heavily involved in the racing also; everything about his setup and stuff. So family-wise, we spend many weekends a year racing.

It’s basically the same as back in the US. Now, Asetek is also racing, and then I have the racing on the side. That’s my life.

RO:

That’s perfect. A really a nice segue into also how you are now doing SimSport products.

AE:

Yeah, exactly. I mean, I’m not Max Verstappen or anyone else, but I know what I’m talking about.

RO:

You mentioned something earlier. You set up an academy for people that couldn’t necessarily afford to do gaming, but isn’t that also the case with sim racing? There’s quite a big barrier to entry in terms of the costs of all the products.

AE:

Yes, of course. And that was also the plan in the sense that people could come and use these simulators, but it honestly just did not work. They were broken all the time, then buttons fell off, then the steering wheel broke and the wheelbase broke.

I mean, there was so much going on that we just had to give up, because the idea was that people could come and use it for free, basically without us being there, but at the end of the day, we had to have a full-time employee just to make things run.

But yes, of course, we are building a new headquarters right now, and there will be a big sim center in the basement there.

RO:

Where does Asetek fit in the ecosystem? What is your, I don’t want to say “USP”, and use jargon, but what makes you different?

Because there are a lot of… Especially after the pandemic, there are a lot of manufacturers entering the market, and I’m sure you’re also feeling price pressure from the Far East as well.

Where do you fit in the ecosystem?

AE:

It’s a good question. For sure competition has changed quite a bit because, our lowest end products, La Prima, which is still pretty high end, that’s €1,349 for a bundle. Three years ago, that would’ve been an amazing deal, today €900 is overpriced if you look at it like that.

But I would say our claim to fame, other than the quality stuff that I talked about, is really this real racing heritage.

We want our products to feel like a real race car. I don’t care what the competition think, I don’t care what the competition say. When we released our Invicta pedals, a lot of our competition, they trashed us: “Oh, the brake pedal is too hard”, and a lot of the so-called expert reviewers were like, “oh, the brake pedal is too hard.”

And I’m not trying to please sim racers, I’m trying to build a product that feels like a real race car, and if sim racers like it, then they can buy it, and if they don’t like it, they can buy something else, and I think that’s what we are trying to carry through all our products, if it’s steering wheels or if it’s wheel bases.

And I think we have been pretty successful with that open and honest approach, and if a race car was faster with a soft brake pedal, I guarantee you all race cars would’ve had soft brake pedals by now.

So there is some physics behind it, and I think, well I know, when I walk around the show floor now [at ADAC Sim Expo 2023], let’s just say I can see several competitors who’ve been inspired, let’s put it like that, by our design. So imitation is the ultimate form of flattery, so we are not going to change that.

Then on top, I would say our prices are actually pretty good for what you get. It’s not a $499 bundle and it will never be, but the value is really good. For example, yesterday we released our GT and, let’s say, round wheels, €399, and €499, and then you can change the rim for €150. So I think the prices are fair.

We will, as you say, point out from the Far East, they are just unloading products into the market, new models all the time, et cetera. That’s not our approach. I’m not saying there’s anything wrong with it, it’s just not our approach because we are participating in racing, but not a race to the bottom.

We are actually trying to make money, and I’m very hooked on this triangle philosophy that when you design a product like we do, and we go to the market, there’s these three corners, there’s quality and there’s price and there’s service, but you can only have two.

What do you choose? And ours is… I mean, quality is also performance and features, but overall we are service and we are quality. When you walk around the show floor here, if you think about it, it’s very easy to point out which two will this company have.

For some people, price is the most important, but then don’t expect to get the best quality or if it’s good quality, don’t expect to get the best service. So that’s what we try to do, and I think we’ve been pretty successful so far.

RO:

With that said, who would be your – I don’t want to put words in your mouth – target customer, or typical customer?

AE:

I think in sim racing, there is no such thing. This is a sim racing show, so of course we have sim racing enthusiasts here, but when we are out racing, we also bring our equipment and we have this 15-year age limit on our equipment when we are at a show like this, for safety reasons.

These are very strong wheel bases that we’ve got, but we also make exceptions.

If there is a… Last weekend, I think it was at a race in Denmark, there’s a dad walking in with his 12-year-old girl, but she’s a karter, so she’s doing go-karting, and she’s like, “I know how to handle it”, and they walked away with a full Invicta set, I don’t know, four and a half thousand euros. I would never have imagined that.

So that’s racing, and then we have of course, our staple of, of course sim racers, and then we have a lot of car enthusiasts, and they really appreciate the fact that it feels like a real car.

So a lot of, let’s say, old fat guys like myself with a lot of money and, unlike myself, who have got all their Ferraris and the Lambos, and they want a simulator in their man cave, a lot of customers like that also.

RO:

What inspired the design philosophy of your products?

AE:

That’s a really good question. I am actually the guy behind it, so I should be able to answer, but I think we all have a different opinion about what is high end and what is not, and to me, I think I’ve been inspired by things I like.

And I do like architecture, I do like design, and if you look at our products, I would say they’re very masculine. It’s all black, flat, black and ribs, and I think I’m also a very big Hi-Fi guy.

So, I think for me, it’s a mix between high-end Hi-Fi, and gaming devices. You can see we have the LED lights on all our stuff, and that’s of course from the gaming world, but it also makes a lot of sense.

We will release a new software upgrade for all our customers relatively soon, where the LEDs are no longer just a feature; they will actually be able to help you with a lot of things in your racing.

And the LED is something people love to hate, but based on what I can see now from our sales, people love it. That’s just how it is.

So, it’s not a gimmick; it’s industrial design, in my view. Just like any car brand nowadays has got an LED strip around the doors. I mean, why do they have that? Yeah, I don’t know if that answered your question.

RO:

And with that hint, what can we look forward to from Asetek?

AE:

I think what we have done now for the last two years is to bring a lot of, in my view, obvious innovations, and that’s my goal, to continue with that, and then I also think to be more specific, we started out with the Invicta.

I think that’s the way to make a splash in the market, is to show the best you got, and we did that with the Invicta pedals.

Then we turned our focus more to the La Prima and the Forte, because we also have to sell something so we can eat, and then I think in the relative near future, we will release the Invicta steering wheel, which will, just like the Invicta pedals and the Invicta wheelbase, will be super high-end and very nice.

All aluminum and carbon fiber.

So that’s the focus right now.

RO:

And how can people follow Asetek’s movements going forward?

AE:

We are on all the typical social media for sure, and of course we have a website also, and we have our YouTube channel.

It’s not very intelligent or very special, but because I am the father of all our products right now, I do these launch videos, and we do videos on how to get the best performance out of our products, and if you follow them, then you’re in pretty good shape.

RO:

Perfect! Thank you very much for your time because I know you’re a busy man!

AE:

You’re welcome!