Dynamos were hammered 5-0 by the irrepressible Masandawana in Tshwane and were two goals down in the first 15 minutes of the match.
"Yes, in the first 10-15 minutes we were like a deer in the headlights and conceded two goals which we said we going to try and prevent from happening," Larsen told SuperSport TV.
"Don't give them the early goal, once they get that they control the game and that's exactly what happened. You know, early in the second half we get a chance to go 2-1 and then really put them under a little bit of pressure and it hits the upright and they scored the third thereafter.
"So it was backs to the wall after that, but the gulf in class was clear for everybody to see. I'm happy the boys gave it their all. We weren't good enough, we can now focus on the national play-offs," he added.
Dynamos had chances particularly through Samekele Ngubane who hit the upright early in the second half, as it is a case of lesson learnt for Larsen and co on the day.
"Like I said, the first 15 minutes we didn't play at all. But after they got their second goal I thought the last 20-25 minutes we started to play a little bit and more in the second half.
"But they already had the goals behind them so they were controlling the game from that point on. But from our side I think it's a lesson learnt, we will take a lot of positives from this defeat and I'm sure it's going to make us grow as a team going forward," he said.
With Masandawana fielding a somewhat second-string team and resting a number of their regulars, Larsen was pleased none of them featured.
"Listen, in every position there's quality. I was walking through the tunnel now and saw the guys that didn't play and I was thinking 'thank God' they weren't on the field.
"So so much depth in quality throughout the team and what they have build over the last five, six, seven years has been magnificent.
"I think everybody has been in awe of what they have achieved and build. You know, I'm sure a lot of people can learn from what they have done," Larsen said.