Silicon Valley's Hottest Innovations 2016

An Idea Whose Time Has Come

Hyperloop Transportation, through a collaborative effort wants to make travelling through high-speed tubes a reality

“I am the worst employee anyone can find,” says a nonchalant Dirk Ahlborn, sitting out of his makeshift office at WeWork, a co-share working space in the heart of Los Angeles. For a good part of his career, the German-born now American entrepreneur preferred to work on his own. After migrating to Italy at the age of 19, he turned entrepreneur when he founded his first company. “As an employee, I may not have done well, but being determined has helped me as an entrepreneur,” says the 39-year-old, who dabbled in the alternative energy space before his love interest brought him eventually to the US where he ended up with a non-profit incubator, the Girvan Institute of Technology. Funded by NASA, Girvan’s goal was to commercialise technologies developed by government labs. It was at Girvan that the idea of using crowdsourcing was born. “When I joined the incubator it was struggling a bit with over $1 billion of investments. The co-founder and president was 83…it wasn’t an easy time. I loved working with entrepreneurs and knew I had to do what I liked,” says Ahlborn, who founded JumpStartFund in 2013 based on the crowdsourcing model, but with a difference. 

The idea behind the platform was to identify and groom entrepreneurs from the ideation stage. A wannabe entrepreneur with an idea or an existing patent can list for as low as $10. The site would then use its community network to create a team around the idea or patent. “In most startups, it’s like two buddies meet up at a bar and decide to form a company. Six months down they realise that what they thought was a problem was never the case to begin with. In most cases, start-ups fail because of lack of experience and insight. But one can build a better company by bringing people together, by working with the best talent across geographies. That’s what JumpStartFund does,” mentions the father of two.

Incidentally, the year his platform went live, maverick entrepreneur Elon Musk put out a white paper aimed at revolutionising the transportation space by using Hyperloop technology. Musk’s proposal entailed transporting people through aluminum pods that can travel up to 760 miles an hour (1,223 kmh) inside air pressure-controlled steel tubes on concrete pylons. Presenting his case for an alternative inter-city transit system, Elon Musk was critical of California’s proposed $68 billion high-speed rail system, which also puts a lot of farmlands at risk. The rail system will see trains running at 200 mph and completing the journey from Los Angeles to San Francisco in less than three hours with an estimated ticket price of $89. According to Musk, Hyperloop is four times faster than the proposed high-speed train and comes at around one-tenth the cost –$6 billion recoverable in 20 years with a ticket price of $20. But given that his hands were full with SpaceX and Tesla Motors, Musk put the idea as an open source project for others to build upon. That’s when Ahlborn got excited and put the idea on “We asked our community should we be working on this and the overwhelming response was yes,” says Ahlborn, who incorporated Hyperloop Transportation Technologies (HTT) in November of 2013 with a small team and also roped in Bibop Gresta, another serial entrepreneur from Europe. 

Starting off
The first phase of the project involved a feasibility study, which was completed in 2014. Based on the study, Ahlborn and his team saw three key points. Firstly, it was not an entirely new technology, second the project was expensive and could be done only by governments and, thus, it had to be more of a movement than an innovative idea, and, lastly, public transportation systems were extremely ineffective and incurred colossal waste of resources. “Public transportation is financed through subsidies. The New York Metro loses $2.2 billion every year, Germany spends $22 billion every year in the train system and it’s the same whether its China or India, it’s a big part of the budget. If you look at the technology in these, there hasn’t been any breakthrough innovation,” points out Ahlborn. 

While Musk’s concept involves steel tubes and aluminium pods, HTT is using a new material and is also deploying a different propulsion technology. The start-up will be using the passive magnetic levitation technology from Lawrence Livermore National Laboratory. A set of magnets located underneath the pod as well as along the tube will help the capsules levitate and since the magnets wouldn’t require additional power, the construction process is expected to be easier and, more importantly, cheaper than existing Maglev trains. A passive levitation system will eliminate the need for power stations along the track. Besides, the pods, which can travel at speeds of 760 miles an hour, will be propelled by an electric motor whose batteries will be recharged from the energy generated when the pods decelerate. In peak hours, a capsule can be made available every 40 seconds with a seating capacity of 28 people. Though in a subway-like system, the seating capacity can be increased. Also, from a safety aspect, in the event of a power failure, even at its maximum speed, the pods will not crash land, but will slowly settle down on to the aluminium tracks after its speed comes down to about 22 mph (36 kmh). HTT is also using a new material called “Vibranium” to build the pods. Developed in collaboration with C2i, a Slovakia-based company that manufactures carbon fibre for automobiles and aircraft, Ahlborn has named the material based on a fictional metal used as a shield by the popular Marvel superhero Captain America. “If a pod is damaged in transit or develops some stress, the sensors in the material will communicate the same to the control tower and the pods can be pulled out of service,” reveals Ahlborn.

Hyperloop’s biggest advantage is that it can also run on alternative energy and produce more energy than it consumes. “Normally, it’s hard to recover infrastructural costs in public transportation as they struggle to cover just the opex. That’s what we are really after, we want to build a system that doesn’t need government subsidies and that’s our blue ocean,” says Ahlborn. 

To showcase its proof of concept, HTT is building an 8 km-long Hyperloop tunnel in Quay Valley, a proposed 100% solar-powered neighbourhood with 25,000 homes. “We are currently doing an environmental study which will be done by early 2017 or end of this year, depending on the bureaucracy,” says Ahlborn, who estimates the project to cost $150 million. Vacuum technology major Oerlikon Leybold is partnering with HTT for the project. “There is a very special motivation in contributing to something fundamentally new which can revolutionise the traditional means of transportation,” says Martin Füllenbach, CEO of Oerlikon Leybold Vacuum, which is also involved in the Hadron Collider project in Switzerland. Just like the Quay Valley project, Ahlborn believes that Hyperloop makes more economic sense for satellite cities, where buying cheap land, for example, 100 miles away from the city, would make up for the cost of investing in the tech. “The appreciation in the land value itself will compensate for the money invested,” points out Ahlborn.

Monetising a commuter’s time is another aspect that HTT is focusing on. Since travelling within a Hyperloop is completely enclosed, HTT is creating a virtual window for passengers that will not just relay images of what’s outside but also includes advertising and interactive applications such as maps. “May be transportation is only marketing. It’s not about the ticket price, but passenger experience is essential. If I want to make money out of your time, it suddenly changes a lot of things,” feels Ahlborn, who is also looking at letting out technology to existing transportation networks. “We are not a transportation company, we are a tech company so we can also contribute to make existing transportation networks better,” he explains. As a first, HTT is collaborating with the Germany-based Deutsche Bahn, the largest railway operator in Europe, to create an “Innovation Train” that will incorporate its VR technologies. Christoph Kraller, managing director of SüdostBayernBahn, the subsidiary of Deutsche Bahn, says, “We have combined our strong development capabilities with HTT to integrate new ideas and innovative prototypes into our local passenger train service. The creation of a digital travel companion continues our progress forward.” HTT also plans to deploy a technology that uses graphene as a base to clean the air of bacteria, viruses and smells. “We have created this device which cleans the air and sanitises it,” reveals Ahlborn, adding, “what we are building can be used even in cars, trains, and planes.” 

On track
Though HTT is yet to showcase its proof of concept, it has bagged its first deal early this year with the Slovakia government to connect Budapest to Bratislava in 10 minutes and Bratislava to Vienna in 8 minutes through its Hyperloop network. The company is also in negotiations with 16 countries, claims Ahlborn. Incidentally, India’s Union Minister of Transport Nitin Gadkari had met the Hyperloop team but no development has taken place since. While the Indian Railways is already burdened with a stodgy network and stretched finances, the government has announced that it will be investing over $16 billion in a high-speed bullet train on the Mumbai-Ahmedabad route, which is a little over 500 km. The bullet train is expected to cover the distance in about two hours, running at a maximum speed of 350 kmh. “If you are building a high-speed train with such huge investment, the money is gone down the drain…you are not getting it back and every year its opex cost will keep on increasing. Not to mention servicing the loan to build the project,” opines Ahlborn, who feels India should relook at the math and do a feasibility study.

Even as HTT is building an economic case for Hyperloop, it is also looking at how the same technology can be deployed in the logistics sector. “We can move containers. It would be a single container per pod, which has an advantage because you do not have to load up the whole truck. Freight does not really complain, but passengers do! So, for us, it is much more important to get it right with the passengers. Freight is something that we do on off-peak hours, we can have a capsule every 40 seconds, so in terms of capacity it looks very good,” mentions Ahlborn. HTT is collaborating with a couple of freight companies to understand how the system can be used in the best way possible.

Journey begins
Currently, HTT is working with a team of 600 individuals and 50 companies. Each of them depending on their time and contribution are allotted stock options. “We are asking for a minimum of 10 hours a week,” reveals Ahlborn, which has 25 employees on its rolls. For now, there are just two startups in the US, which are engaged in the Hyperloop chase. Hyperloop One, backed by Shervin Pishevar, an early investor in Uber, has raised $80 million in series B funding from the French company SNCF and has already tested a Hyperloop prototype in Nevada, but on rails.

Ahlborn is not unnerved by the development and instead feels more competition will only make the technology more prescient. “At the end of the day, you don’t want to be only one. There is no one plane or train maker, every market strives under competition. I believe in the Latin word called ‘Concordia’ which means ‘together’. This means you are running with and not competing against. Even if it’s a race, everyone is running in the same direction and everybody gets to the goal,” says Ahlborn. 

Unlike Hyperloop One, HTT is going slow on raising money. “We have seen our competitor raising a lot of money but we don’t want to focus on the money. We want to show the world that everybody can make a Hyperloop and that you don’t have to be a billionaire. A guy in Bangalore who has an idea can change the world…we are looking at new way of building companies. We are not trying to be an American company but a global company…we value brains more than money. We are doing something nobody has done before,” says Ahlborn.

The company has a couple of undisclosed strategic investors and has access to a wider investor base, thanks to JumpStartFund’s community network. “We have access to capital, plenty of people are happy to invest, we have large Chinese investors and infra funds,” mentions Ahlborn, who believes the company’s strategic engagements with companies matter the most. 

For someone who drove Uber and Lyft and rented out his apartment for a year to bootstrap HTT, Ahlborn is loving what he is doing. “In my earlier ventures, I always felt that I was pulling the wagon, the employees were never really passionate. But here it’s different…everybody is enjoying what they are doing that keeps me going,” says Ahlborn as he gets ready to catch a flight to Moscow. “I will be meeting the Russian Prime Minister Vladimir Putin,” smiles Ahlborn. That’s enough indication that HTT has got its loop right.