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5 tough questions for Hyperloop One

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LAS VEGAS — Hyperloop One's 2016 was about as good as yours: Some good moments (even great ones) and some very, very bad ones.

The next-gen transportation company, which is building a unique people-mover platform based on a design by SpaceX and Tesla CEO Elon Musk, had a milestone moment last spring. In the arid Las Vegas desert and with hundreds of parched journalists watching, it publicly tested the propulsion system for its planned tube-based transportation network that could cut hours-long travel between cities down to minutes. Hyperloop One estimates a trip from Los Angeles to San Francisco will take just 30 minutes. The test itself lasted just a few seconds, but Hyperloop One also spent the day proudly showcasing all the progress it was making on building the tubes and preparing for full-scale human transportation by 2021.

SEE ALSO: The world's first hyperloop is officially coming to Dubai

Hyperloop One promised more exciting tests before the end of the year for more exciting demonstrations. 

Then it all appeared to fall apart. 

Flamboyant company CTO and Co-Flounder Brogan BamBrogan was shown the door and then he promptly sued, blasting co-founder and Executive Chairman Shervin Pishevar, alleging nepotism, mismanagement and veiled threats. It was an ugly scene that undermined Hyperloop One’s credibility and lingered on until the fall when Hyperloop One and BamBrogan settled out of court.

Since then, the company has reorganized and sought to regain its footing and stride.  Pishevar appears to have stepped back a bit while former SVP of Engineering Josh Giegel took over at CTO.

Executive Director Shervin Pishevar (far left), CEO Rob Lloyd (center) and former CTO Brogan BamBrogan at the first successful test of the Hyperloop One propulsion system.
Executive Director Shervin Pishevar (far left), CEO Rob Lloyd (center) and former CTO Brogan BamBrogan at the first successful test of the Hyperloop One propulsion system.

Image: lance Ulanoff/mashable

I found Giegel, Hyperloop One CEO Rob Lloyd and SVP of Global Operations Nick Earle on the floor of CES in Las Vegas last week. Like the rest of us, they were running between meetings and presentations, but I managed to ask them what I consider five critical questions. 

What follows is our brief discussion, edited for clarity.

Do you feel like you’ve stumbled?

Rob Lloyd:

Actually, I am extremely proud of the company’s grit, focus and execution and I think we’ve accomplished things that most people thought would be quite impossible. 

We’ve continued to build the team, 225 today in the company. The quality of that team continues to be at the highest level on every function. We've built out our facilities. We’ve made progress on our development loop, which is the primary focus of the company. We’ve raised $50 million more equity. We’ve built a 105,000-square foot factory 21 miles from where we’re standing. And we are so close to showing the world that Hyperloop is real, since the last time we talked. I think that’s an amazingly incredible track record and something every one of our employees is very proud of.

Is that where we drove to, 21 miles outside to the factory?

Lloyd:

You haven’t been to the factory. It was 33 miles to the development loop. Maybe 34 to the post site, and we built two preparation areas. The development loop, Josh [Giegel] was there this morning and, literally, the progress on building dev loop, which is the company’s focus, to show a prototype, to build a prototype, to show the world that Hyperloop is real, has been phenomenal. But the facilities around that are amazing.

Work on the test facility continues.
Work on the test facility continues.

Image: hyperloop one

The 105,000-square foot facility 20 miles from here is a fabrication site where Josh and his team have hired welders and fabricators and machinists. They’re building components and learning the methodology of manufacturing the technology that will be part of Hyperloop and that learning will be part of what we continue to develop on our site, and also at some of the customer engagement sites we have around the world as we move from an early development site to one that would be more like an early production site, which is really the focus of the company.

Are you still on schedule?

Josh Giegel:

As far as near term dates, we talked about basically starting our… conducting our development loop, beginning construction on that at the end of last year [2016], which we did and [we are] continuing construction right now. Starting testing basically within the next couple of months here, if not sooner.

Hyperloop One CTO Josh Giegel (left) speaking with media after last spring's successful test.
Hyperloop One CTO Josh Giegel (left) speaking with media after last spring's successful test.

Image: lance ulanoff/mashable

Then, after that, we have engaged with RTA [Roads & Transportation Authority] on the ground in Dubai and in a couple of other spots around the world that are moving into how do we actually build this in your country and how do we actually regulate this?

And then we’re looking for the 2020 timeline for cargo and 2021 for people. That’s still what we’re targeting at this stage.

What do you think, at this moment, are your biggest hurdles?

Giegel:

The biggest challenge we have at this spot, taking it to production, is … So we’re doing a proof of technology, proof of concept in the desert, right? That’s our R&D facility. The next rev of that, the next version of that is taking this same performance, or better performance, and driving the cost down. So, that’s what we’re going to be spending 2017 on. And 2018 is going to be really going through a lot of the, building these and moving those into a, this is a new type of product, a higher-performing, low-cost sort of product, which will ultimately get us to the point that we want to be at to be extremely compelling in the marketplace.

Lloyd:

Second thing that I always thought was going to be a challenge was the certification and regulatory environment, where we are dealing with technology that isn't regulated. Firstly, there is no regulation for Hyperloop and we have to work with regulators to write them. Secondly, typically, these things are done, ‘We’ll build and then we’ll ask you to certify it,’ but we are approaching it quite differently. We’re collaborating with regulators before we’ve even finalized the design of the product. Having them weigh in and give us advice as to how to design and develop the product in such a way that they would approve it.

The Hyperloop One propulsion test track.
The Hyperloop One propulsion test track.

Image: lance ulanoff/mashable

So, we’re way further back in that process than normally happens in a highly-regulated transportation technology, and we’re learning so much about what we would do and the decisions that Josh’s team would make. So, that, a couple of years from now, that regulator was a part of that, very collaborative and then they’ll be almost co-authors as to how that technology can be regulated. I think that’s what we’re looking for in terms of negating that risk. So, that was one that concerned me and I am pleased with the progress we’ve made and how much positive reception we’ve had.

Nick Earle:

I would add that the third challenge as we go to market point of view is really very unusual, which is too much opportunity.

I’ve been in the IT business for over 30 years. Typically, you go out to customers to try and persuade them to be interested. We had the opposite problem. We had 2,800 entries for The Hyperloop Global Challenge and we whittled them down to 35 that was announced today. But if you think about that, that’s 35 entries, not just for teams, but teams that each have somebody at the government or regional level who’s in transportation planning saying, ‘I support this bid.’

A worker is busy making the Hyperloop One tubes.
A worker is busy making the Hyperloop One tubes.

Image: hyperloop one

So, what we’ve got is 35, government -supported requests for us to build Hyperloops.

We need to qualify and just do a few initially and make sure we get them absolutely right. Se we have a very unusual, at least in my experience, challenge, which is, we really have to be crisp over qualifying which ones that we go after because there is so much demand and so much interest. You could argue it’s a nice problem to have, but I’d argue that actually it’s a tough problem to have.

What is up with Dubai? Dubai seemed to come out of nowhere. When I read about it, I wondered, is Dubai going to get Hyperloop first?

Giegel:

They put together, the Dubai Future Foundation, put together an accelerator. It’s an incubator for startups, so to speak, in that area. And what they were doing was providing office space, but they’re also providing connections to the regulatory and government officials that you need to take a project to scale. We got into that fairly quickly in August and we mobilized a small team, about five of us that went over there for the better part of five months, actually a team is still there, and we moved through that process, we were the first team to move out of that process into the actual feasibility study with the government body there.

They put together a plan together to attract technology talents and technology opportunity to Dubai and to the UAE and completely opened their doors and said, ‘Go ahead and you’re gonna need to talk to these people.’ And so, ‘Let’s do it.’

Is there a chance that Dubai would have Hyperloop One first?

Lloyd:

Yeah, there’s a chance that that could be first. It’s certainly not decided. There’s much more work that needs to be done. There’s a chance that that could occur in Europe. There’s a chance that that could occur in Asia. And, quite frankly, we’re just saying, we need a number of places that really want to do this. So, we can make the decision, the strategic decision, that Nick just mentioned, is when we prioritized and put our resources behind those projects, we’re really prioritizing that they’re going to get through the entire construction phase, have the government contingent to support them, that we can finance them and raise the capital. That’s another thing in the filter that still has to happen. So, we can get the most phenomenal, high-potential, impactful new route, but we’ll need to be able to raise project financing to then construct that.

There’s a lot of filters to go through.

Dubai is a possibility, but we’ve got more work to do there, and I think, along with the regulator, we’re very happy with where we are, but we’re still working really hard with the team.

How soon can I ride?

Lloyd:

Five years. 2021.

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