Inside the Crazy Business Plan of the Hyperloop

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Up onstage in the sprawling Pasadena Convention Center stands Dirk Ahlborn, the German entrepreneur who wants to stick you into a 7-foot-wide tube — suspended by magnetic forces in a pneumatic vacuum, naturally — and shoot you from Los Angeles to San Francisco at a rate of 760 mph, about the speed of sound. “Just to explain it really simple,” Ahlborn tells the audience, “it’s a capsule full of people, hovering inside a tube, going very, very fast from point A to B.”

It’s late September and Ahlborn has been asked to deliver the keynote speech at the unfortunately named Gizworld conference, a three-day event whose tag line proclaims “the future is already here.” Though he’s not yet a household name, Ahlborn, founder of Hyperloop Transportation Technologies, is a natural pick for a futuristic event like this.

Two years ago, Elon Musk, the Tesla and SpaceX founder, published a widely publicized white paper that called for the building of a Hyperloop — essentially a super-fast vessel that runs inside a vacuum-sealed tube. The idea for a “fifth mode” of transportation — after planes, trains, autos and boats — has floated around for about 100 years, but concerns over safety and cost have consistently scuttled the plans.

Still, Musk has been adamant that advances in technology make the time right for a Hyperloop, or a system like it, one that is far more audacious than California’s already-proposed 200 mph high-speed rail line, which, in addition to being very fast, would also be very expensive, at a cost of some $68 billion.

Still, Musk had no intention of building the Hyperloop himself. It was part public exhortation, part public dare. In essence, Musk lobbed the idea into the ether and just sort of hoped that a company — or a person — would turn the notion into a reality.

Ahlborn is the guy who took the bait.

Back onstage, Ahlborn is describing how the company he formed is itself on the fast track to building the Hyperloop. What he doesn’t mention, however, is that in February a separate and competing Hyperloop concern was announced.

Similar Names, Different Approaches
The similarly named Hyperloop Technologies, run by Shervin Pishevar — a former SpaceX engineer and Silicon Valley investor — opened up in Los Angeles not far from HTT’s headquarters. But despite their similar names, much to the chagrin of Ahlborn, the two companies could not be any different in their approach to prototyping, building or commercializing the Hyperloop.

In one corner, Pishevar’s company is taking the more traditional, Silicon Valley route: It’s raising gobs of money from venture capitalists, hiring employees and starting to build out potential Hyperloop prototypes right from the courtyard of its freshly appointed headquarters in downtown LA.

By contrast, Ahlborn’s company is the renegade, the company that the Los Angeles Times recently described as “the radical” of the two companies. Why? Because Ahlborn and HTT aren’t simply trying to rethink the physics of transportation, they’re attempting to rethink how companies are built in the first place. Rather than hire full-time, salaried employees, Ahlborn has decided to crowdsource the labor to part-time workers and offer stock options in lieu of salary.

Amazingly, it’s beginning to work.

Since launching in the summer of 2013, Ahlborn’s company has grown to about 450 workers, based in more than a dozen countries. Many of them work for organizations like NASA and Boeing during the day and spend nights and weekends working for Ahlborn. In order to be eligible for stock, HTT asks its “employees” to commit to a 10-hour workweek. Ahlborn declined to get into specifics about stock allocations for this story, but in an email he noted: “Early [employees] get more. In general we have a difference between senior and junior people for each hour worked.”

Yayun Zhou, HTT’s design director, recently completed her master’s degree in architecture from the UCLA. She’s now helping design the interiors for HTT, forgoing the stability — and paycheck — of a more traditional salaried gig. “Everything is going really fast,” she says. “We’re very focused.”

Eventually, those employees may indeed cash in on their efforts. By the first quarter of 2016, Ahlborn has a bold plan: He wants to take the company public, raising upward of $500 million on the Nasdaq, with the money being used to compensate those who stick with the company, as well as finance a test track in California’s Central Valley.

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SOURCE: International Business Times, Eric Markowitz