In August of 2013, Elon Musk (CEO of Tesla and SpaceX) released a whitepaper detailing the concept of Hyperloop Transportation- a futuristic transportation innovation expected to change the way we live, travel, and work. Although much of the technology for the Hyperloop is yet to be developed, it has been described by Musk as “a cross between the Concorde, a railgun, and an air hockey table,” and by others as “aerodynamic pods that shoot through low-pressure tubes at speeds much faster than a Boeing 777.” In early 2015, Musk reemerged to help advance the Hyperloop, which is now being ushered through time by two CA startups and the crowd.
The first, Hyperloop Technologies, is a fairly traditional startup that has raised funds ($8.5 million to date, projected $80mil this year) and hired its own employees to work on the Hyperloop project. They are both well-backed financially and with personnel (Hyperloop Technologies holds many key engineers and deal makers close- including SpaceX engineers, ex-White House go-getters, and educational non-profit pioneers). The second, called Hyperloop Transportation Technologies (HTT), was started by Dirk Ahlborn in 2013. Just prior to HTT, Ahlborn launched a crowdfunding site called JumpStartFund. HTT used JumpSTartFund to crowdsource and crowdfund its idea for the Hyperloop project, and now has over 170 mostly parttime engineers and designers. The global HTT team works for equity, and reportedly many also work part time for other big name companies, including Boeing and NASA. In the past year, the team has crowdstormed a 76-page document that further outlines its own plan for the Hyperloop system. Musk’s original paper was the starting point for the crowd to expand on the actual technological, logistical, safety, and cost details.
While HTT is formally crowdsourced through JumpStartFund, they also source contributions informally across other platforms. UCLA’s design and Architecture program is collaborating with HTT on optimizing routes, stations, and design. They also appear to be cooperating with Hyperloop Technologies.
Perhaps HTT’s most noteworthy “partner” is Elon Musk. Musk’s name alone gives legitimacy to the efforts. Per their website, neither SpaceX nor Musk are officially affiliated with any hyperloop companies. They are, however, “interested in helping to accelerate development of a functional Hyperloop prototype.” SpaceX has already announced (but is yet to break ground on) a 1+ mile test track, ETA 2016. By footing the bill for the track, this will greatly reduce the cost of prototyping for engineers and designers hoping to enter this industry at such an early stage. SpaceX (and Musk) have funds, motivation, and the market position to build this track, while others do not. Also earlier this year, SpaceX announced an open competition for designing and building pods, encouraging university and independent engineering teams to participate at all levels. This competition is a different form of crowd sourcing- all knowledge gained from the competition will become “open-sourced free-ware to the public and even potential competitors.” This is an ambitious project, and hopefully the Test Track will be finished in time for the contest’s published “competition weekend” in June 2016. I also fear that the crowd might lose interest should the track (and therefore the project) be delayed. Without a functional and funded track, there is little hope for a proven prototype, despite how many qualified people log onto JumpStartFund to offer their ideas. As of today, there are 3100 followers of the project, and in the last quarter people submitted ideas on everything including pylon materials, economic feasibility, and “modern” branding. It’s also unclear how much money is driving participation. HTT’s website directs you to JumpStartFund, and they state that they “ask for 10hour/week minimum commitment in exchange for stock options. If the project does not progress fast enough, or loses funding, will the best and brightest lose interest? How will that affect the technology?
To date, they are still in the earliest stages of value creation. Starting in 2013 with just an idea, interest has mounted. As interested and capable engineers, businesswomen, and funders join the party, they will continue to create value by building robust technology, an “affordable” infrastructure, and a business model to match. By reaching to the crowd- for crowdstorming in early stages, crowdsourcing in middle stages, and crowdfunding in all stages, HTT, SpaceX, and friends can bring a seemingly unreachable technology to the masses. Unfortunately, there has been no value capture to date. This part of the value chain will only happen in the future, once the technology is actually developed and tested. HTT has publicly stated that they believe that the first branch of the hyperloop, connecting 2 of CA’s biggest cities, will be available in the next decade for a whopping $6-17 billion. How much value will they be able to capture? On a dollar basis, it is far too early to predict, and neither company has released a projection. On a knowledge basis, JumpStartFund and the SpaceX’s Hyperloop Pod Competition will capture mountains of groundbreaking innovations, in the hopes of advancing the entire industry.
Breitbart article on crowdsourcing the Hyperloop (Even though I don’t subscribe to this conservative website, this specific article had a ton of useful linked information, including many of the sites listed above.)