Dirk Ahlborn, the CEO of Hyperloop Transportation Technologies (HTT), visited Slovakia for two days earlier this week. Not only he met and inspired a lot of local people, but his visit was also a great success for the whole country. As we have been informed, during Dirk’s visit, the Letter of Intent has been signed between HTT and Ministry of Economy of the Slovak Republic – making this a historic moment for both sides, as this was the first Letter of Intent ever signed between HTT and a particular country.
Though he was very busy meeting policymakers, professors and local companies, he managed to spend a few hours in Bratislava´s Impact Hub, listen to some of the startups’ pitches and discuss the future of Hyperloop with the audience. Thanks to Ministry of Economy of the Slovak Republic, which organized Dirk’s visit, SlovakSTARTUP had an opportunity to talk to him about many interesting topics including Hyperloop´s challenges, Central European startup ecosystem, fundraising, community and many more. Please, enjoy our interview with Mr. Dirk Ahlborn.
Michal: What was your first impression when you heard about the Hyperloop and when was that?
I was part of non-profit incubator that was funded by NASA at that time and we were working on building JumpStartFund – platform that uses Internet and helps entrepreneurs to build communities around the projects. It was back in August of 2013 when Elon Musk proposed the project of Hyperloop. At that time he said he was too busy with Tesla and SpaceX and he wanted someone else to pick it up. And I saw it as a perfect fit for our model. We reached out and got it on to the platform.
Michal: What are the greatest challenges Hyperloop is currently facing? How do you plan to tackle them?
There is a lot of challenges every single day. I don´t see them as that big, everything is solvable and we are taking one step after the other. The overall greatest challenge in what we are doing is to build something that would be used by as many people as possible, as often as possible. So how do you build something that changes your life? Especially when we are talking about transportation – how do you build something that substitutes airplane, something that you use several times a day and how do you integrate that?
For example the first and the last mile is very important. It has to be so easy as pushing a button at self-driving car that comes to pick you up and gets you to a local Hyperloop station which gets you to the main station and within 20 minutes you are leaving the city. Because if you need an hour and a half to get to the station – even if it eventually takes you 8 minutes to Vienna with Hyperloop – you are probably not going to use it that often.
Michal: You came to Slovakia to discuss possibility of building Hyperlooop in the region. What do you think are the conditions that have to be met in order to actually make this happen – in Slovakia and in this region in general?
I think Slovakia is a very innovative and visionary country. People here are trying to be at the forefront of the technology and to push research and development as well as overall startup community. So I think those are the things that we are looking for. It is also important to have people that have an open mind and that have a vision they go after. Europe is not that easy in general when you talk to politicians, politics are very complicated. But so far our experience has been great.
Michal: You briefly highlighted strenghts of the startup community in Slovakia. Given that you had a chance to listen to some of the startup pitches and you also met couple of students and entrepreneurs, what do you think are the biggest weaknesses of our startup ecosystem?
I have seen that there are some really amazing companies with great visions. But either they are too technical with great vision or their vision is not big enough. They are just trying to make money somehow looking at a lot of traditional businesses rather than trying to solve the big problems or going after bigger vision and I think that´s a pity. As entrepreneurs we should always go after solving the problems of this world and trying to move forward the way we are living.
Michal: Let´s move forward and compare European and US startup ecosystems. How do they differ?
I think that European startups are better at getting faster without a need to necessarily have a large amount of capital. They are fast in implementing the solutions, in finding customers, in proving their models and having the revenues. In America there´s a culture of fail – “Don´t worry”. Which is great because you should not be afraid of failure but you should also do everything possible not to fail and I think that Europeans are still living more in the direction that they really try not to fail. On the other hand they are also sometimes little bit too ashamed if they do fail.
One of the main differences is funding, obviously. In America the tech industry has been around for a long time, so there is a lot of people and startup founders that have made money 20 years ago and now are investing again in startups. You don´t have that in Europe. Most of the money here comes either from family or through traditional businesses, e.g. real estate. So they might not always understand the value of potential of the technology, where it can go.
Michal: In regards to fundraising, your company JumpStarter focuses on helping companies to fundraise. What do you think is the main essence for a startup to be successful in fundraising?
I don´t think we help companies to fundraise. The essence of what we do is to help entrepreneurs to build the community – find people that are passionate about the same things as you are, people that would work together with you.
And if you are working with a company or you are following a company for some time, you see how they are working, you see that they are making progress. When it´s time for them to raise some funds, you´ll be there to help them, eventually, to get them off the ground. You have been working with them, you know the CEO, you know the people involved and you see that they are moving it forward. So crowdfunding in that point of view helps a lot.
But more than raising funds it is actually important to convince people to help. Lot of times I talk to entrepreneurs and they say that they need to raise money for manpower – “I need this code”,” I need this algorithm”,” I have to develop the website”, “I have to develop the mobile app”, etc. Well, you don´t need the money, you need the developer. So it would be much easier to find a developer whom you convince to help you on the site and build the product. If your idea is not convincing enough than you might want to change it anyways, because even looking for money is going to be really hard.
If you have to go for money – just to make my answer a little bit longer (laugh) – and you are very early stage, even in America you are not going to be funded by any investor. So lot of people think that you go with an idea to America and you get funding. No. It´s always friends and family round first. Your mum, your uncle, a friend of the family – someone that knows you, someone that knows how passionate you are about the idea, how reliable you are. They might give you the check to start, to build the product, validate your model and then you can go after investors.
Stano: How does the situation in Asia look for HTT right now?
We are talking to a lot of entities, within many different countries. I will actually be in Hong Kong in ten days. It´s definitely our main target market – Asia, Indonesia, Africa, Middle-East. Those are the markets that are the easiest ones because they have problems that they have to solve right now. They can´t wait 20-30 years and they are actually pushing high-speed travel. Cities are exploding so they are looking for solutions to connect satellite cities.
We started in 2013 and we were a company working on Hyperloop when nobody else was working on it. After we had finished the feasibility study, everything started. So Hyperloop Technologies came out after the announcement of the feasibility study, Elon said “Ok, let´s do the SpaceX pod competition“. Because that´s what we wanted. We don´t want to be alone. It has to be a movement and we would be happy if everybody worked with us directly but the market is big enough for many different companies and we can learn together. Sometimes it´s even better to have several companies because there is going to be parts like regulations where you don´t have to do it yourself, we can collaborate with others.
The worst thing that can happen to us is that for example Hyperloop Technologies fail. As long as they are successful I am happy. It´s a different approach. We are also much larger, we have been working on this for much longer, we are now building the first passenger version. It´s not only about moving capsule inside the tube, it´s about how do you feel as a passenger inside, how do you make money, how do you connect your home to the station as I said earlier. There are lots of small elements that you have to be working on.
We have amazing people in our team. We have very large companies with amazing backgrounds, we have the largest construction engineering firm that is part of our team. Everybody working with us is great.
Stano: You are doing it for a well-being of the whole world not just for a profit…
We are a company. I don´t want to be like “We want to change the world.” We are a company, it´s a business. I am a big fan of open-source but, unfortunately, open-source for certain kind of projects doesn´t work. So we found a way to combine open-source methodology with building a business. Because rather than giving you a license to do whatever you want, you become a part of what we are doing and everybody is creating the value. And your value grows.
And it´s not me, I am just a CEO. It´s really the community. I always try to make clear that the ideas are not my ideas, these are all the things that came from our community of very smart people and everybody is super passionate about what we are doing. That´s what makes the difference.
Stano: I am curious about the future plans of HTT crowdsource model. How will the current state of the company transform after finishing Quay Valley? The main design part is already done so there will be a lots of engineers probably upgrading the current design.
You can always do better, right? In general, I know we have version one and there are a lots of areas we are continuously working on and improving them. We are a crowd-powered company, that´s a part of our DNA. That doesn´t mean we will not have fulltime working people, paid with salaries. But you can continuously bring people onboard, they receive stock options at the current valuation, they grow the value of the company, they will make the money through that. They can bring a lot of benefit and you can work with new ideas and make it better.
That´s the team part. But we also continue working with the community and get its ideas. If we built something in Slovakia, we want to hear what Slovak people think. That´s the power of communities – really knowing how you can build the best system, how you can make the most money, how you can offer the best service. We completely and 100% believe in that.
We are learning, we are not perfect. We are a startup at the end. But it still works amazingly well. And it´s getting better every day, we are learning every day and we are refining systems, continuously putting one step in front of the other. It´s a process.
Stano: What are the plans in regards to IPO?
We have actually always talked about the public offering, not necessarily an IPO. The difference is very subtle but anyways… Our company is built by community so we want to give the community a possibility to be a part of the company very early on because that´s when you can have the most upside.
There is a change in legislation that happened last year and is happening now in America that makes it easier. So we are looking at that and other solutions. Right now the markets are not very favorable so it´s not a good moment to do the public offering. It´s not a necessity for us, it´s not that we want to raise money through the public offering. We don´t need that.
If you were one of the early users of Facebook and would have invested 20 dollars during the series A, today that would be over 500K dollars. So the people that actually make this company because they believe in it, they have been there, contributing, giving their opinions – they should be a part of it very early on. Not only venture capitalists and large investors.
Nevertheless, we are a business, we have to figure out how to manage this in the best way possible and with the current state of the market it´s not that easy. We promised our team that they could be the first ones investing into the company. Right now we are in the process of closing the team round. After that we will be closing round with larger investors. To be honest with you, I would expect the timeframe we are aiming for to be probably by the end of the year. But it´s not a priority. We have lot of other things to do, it´s not the most important thing for me. But we want to do it very early on.
Stano: You said that there will be teams necessary to gather local inputs in the regions where you will be building the Hyperloop. Those will most probably be localized teams, not only cooperation over the internet.
It´s never only over the internet. We are meeting people face to face, we have laboratories where we are working, where we do our tests and prototypes. What I said earlier, however, is more about the internet than anything else. But localized. Because we want to get the information, we want to get the input from the local people, we want to understand what they need, what their problems are.
Stano: Is there anything else you would like to add?
I would love to hear solutions in Slovakia, in Bratislava for example, for short-distance connections that people would like. How would you connect Slovakia, in general. What I mean is the local aspect, like inside Bratislava. Because if you can be in 8 minutes in Vienna but it takes you 40 minutes to get to the center of Bratislava, maybe we didn´t start at the right space.