Hyperloop: The Disruptive Innovation Project

The high-speed Hyperloop train is currently one of the most spectacular business ventures in the world. Here, Hyperloop’s CEO Dirk Ahlborn explains the conditions under which such innovation projects are successfully developed. Plus: Dirk Ahlborn in an interview with Joana-Marie Stolz, Head of Cultural Strategy at Serviceplan, on the business idea behind Hyperloop and the role that marketing plays in this innovative business model.

New businesses need to hold their own on the market and become disruptive innovators if they want to move away from the sidelines. Companies like Netflix and Uber are showing us how it’s done. An opinion piece by Hyperloop CEO Dirk Ahlborn looking at how spectacular and successful innovation projects evolve.

Innovation and disruption are two of the most frequently mentioned terms in the business world today. Every company wants to be innovative, and even disruptive. Our world is changing rapidly, right in front of our eyes. This is a cause of concern for a lot of companies who want to ensure they don’t just become silent spectators while the world’s Googles, Facebooks, Ubers and Airbnbs take over. But a disruptive transformation in the business world is nothing new. Of the companies that the American business magazine Fortune listed in 1995 as the Fortune Global 500, only 12 percent were still listed in 2016. And of course no one wants to belong to the other 88 percent. So what can we do?

Many travel to the United States, to Silicon Valley, where companies can set up so-called innovation hubs and try to fundamentally change the way they think. But, as is so often the case, after a short time they return to their familiar linear way of thinking. We all want to be innovative, but at what price? After all, innovations are always accompanied by disruptions. When our own business is fundamentally turned on its head by disruptive measures and approaches, or is even at risk of disappearing from the market – are we still prepared to be disruptive? And what happens if we fail?

One thing is certain: disruption requires unbridled passion. But as a company, how can you recognise whether you’re just improving on a product or strategy, or whether you’re really being disruptive? Disruption is a revolutionary effect that has been caused by new and innovative technology. But technology should never be a barrier to thinking. Even if the technology isn’t advanced enough for your idea to work, you have to simply accept it as a given and still carry on. The technology will catch up, often faster than you’d think.

Here’s an example: the first iPhone came onto the market at a time when constant, fast data transmission was still pie in the sky for an everyday product. But ultimately it was precisely this iPhone that set the ball rolling for better mobile networks. So what exactly is disruptive? At the end of the day, it is the technology that allows us to innovate in the first place. We can question everything these days. For example: what will the car of the future look like? As I no longer have an engine in the front, I don’t need a hood anymore either. So how will the shape of the car change if it only needs to hold passengers? If I can have a car at my disposal at any time, do I still need to own one?

And why should I favour a certain brand over another? When I order a taxi these days, I’m more interested in how quickly it will be available – and the business model behind it.

Look beyond tomorrow. Of course there are a lot more questions to be asked here. But it’s clear to see that it’s not about bringing as many electric cars onto the market as possible – or retrofitting existing models for that matter. Or having better battery power than another brand. These are all features that are currently still interesting, but will barely make a difference on the market in the long run.

So being disruptive means looking beyond just tomorrow. Short-term experiences don’t count. You need to have the guts to embrace innovative ideas and then also implement them in your own companies. We are often seeing disruptive ideas coming from smaller, lesser-known businesses. In my opinion, this difference is down to the start-up founder mentality.

Large corporations or industrial companies almost always have an executive board and an appointed managing director who are generally judged and paid on the basis of today’s and tomorrow’s operational results. But by the day after next they will have usually lost interest, especially when it means earning less in the here and now. The founder of a start-up or a medium-sized company, on the other hand, is pursuing a vision, a goal, that absolutely has to be achieved, even if they have to go the long way round to do so.

What does all that mean for the companies of today? If we want to promote disruption and innovation, we should be celebrating risk takers, measuring the CEOs of our companies against the future, for example in ten years’ time, and giving founders a chance to turn their visions into reality and establish themselves on the market. But when it comes to disruption, it’s not just about a product or a service.
We’re already questioning everything: how we work, how we approach innovations, how we communicate and how we manage companies and deal with employees. It might sound harsh, but only if we are continually prepared “to destroy” our own company will we be in a position to be disruptive. If we don’t do it ourselves, there’s always going to be someone out there who will.

This article was published (in German) in the Frankfurter Allgemeine Zeitung supplement “Auf die Zukunft – Das Magazin zum Innovationstag 2017” (To the Future – The Magazine on Innovation Day 2017) from 05.10.2017. © All rights reserved – Frankfurter Allgemeine Zeitung GmbH.

Photo: Hyperloop Transportation Technologies

Dirk Ahlborn

CEO, Hyperloop Transportation Technologies, Inc. (HTT)

Originally from Berlin and now based in the USA, Dirk Ahlborn is the founder and CEO of the internet platform JumpStarter, and the founder and CEO of Hyperloop Transportation Technologies (HTT). The company, established in 2013, is developing, producing and building the Hyperloop supertrain, in Dirk Ahlborn’s words “the fastest, safest and also most highly profitable and environmentally-friendly transportation system for passengers and freight”. HTT utilised JumpStarter’s crowdfunding and crowd collaboration platform JumpStartFund to leverage the necessary technology and recruit a team of more than 800 global experts to bring disruptive innovation to the traditional transportation industry. The Hyperloop first attracted public interest when entrepreneur Elon Musk published a whitepaper detailing a futuristic method of transport that could transport people from Los Angeles to San Francisco in just thirty minutes. Musk decided to opensource his concept, inviting entrepreneurs to improve on it and develop the technology. And California-based Ahlborn rose to the challenge. Find out more at http://hyperlooptransp.com and follow Dirk Ahlborn on Twitter: @justdirk

Dirk Ahlborn convinced the audience of his spectacular disruptive innovation project at Innovation Day 2017. After his keynote, there were definitely more Hyperloop fans than sceptics in the room.

In conversation with Dirk Ahlborn

What’s the feasibility of a disruptive project such as the high-speed supertrain Hyperloop in countries like Germany that tend to be critical of technical innovations?

Here in Germany we have a cultural problem with failure. If you’ve tried something and it didn’t work, what do you do after that? Who will work with you? We have to abolish this fear of failure in Germany. But I think the young generation is already changing that.

Hyperloop Transportation Technologies is not only developing an innovative mobility project, the company concept itself is also innovative. Can you explain your crowdstorming business model to us in more detail?

We work with our community. These are people who are generally helping us out, whether via Facebook or other channels, who are somehow connected and react whenever we have an idea. That means we are open to external inspiration, comments, technologies. As well as that, we have our core of super-professional people such as specialists in levitation technology. A lot of them aren’t working for us fulltime, but investing at least ten hours per week into the project. You can’t demand anymore of them and you wouldn’t get any more than that either. The best people are already working for someone else, as they say. Our business model means that you can work with these top people and they’re also passionate about what they do. I think we’ll be seeing that more often in the future.

 A lot of your employees and partners are working on the Hyperloop project in addition to their normal job. What’s the magic formula for getting people on board?

I actually think it’s very simple. Everyone has certain interests, so if someone were to approach you right now and say: “Hey, we have this fantastic idea,” and you say: “Wow, that sounds amazing,” then you would get involved as soon as they ask you. That means it’s really about passion and about sparking a flame in people. They should have the feeling that they’re part of something bigger.

 What role does marketing play in your business model?

Marketing is key. We want to create a movement and not just a company. You have to reach out to the people. And not only in the form of a campaign, but you have to say: “Hey, we are your brand, you make us what we are, tell us what we could do better”. And then you have to show them that you are putting this input to use. Establishing this culture among your own customers is important, and it makes you pretty much unbeatable.

Do you see the CMO as the one who should be driving this movement forward?

In our case, the marketing is down to the bosses, the CEOs, and they work very closely with the CMO. That’s essential. You can’t work in a bubble with your marketing team and community with no interest being shown from the management.

Were you passionate about the Hyperloop from the outset?

To be honest, it was the business model that attracted me at the beginning. I wanted to see if it would work. But of course the passion is there.

How is the business model organised? Something between a top-down and self-regulating approach?

We are organised into teams and the teams have their leaders, who have grown into that position naturally. These teams are managed by our CEO and have to achieve their targets. And of course we also have certain development schedules, it’s all organised properly. But the motivation is a different one.

Would you say that innovation isn’t just about the next new technology, but more about a kind of attitude, a mindset? That as changemakers and pioneers we always have to further question and disrupt our own mental framework if we want to successfully lead our teams in the long term and move forward?

I think that if you already have companies, you’re always going to have the problem with the willingness to take risks. You have something, it works, but innovation or even disruption are something that scare people off. The mindset is important, and I think that a lot of people want innovation and have ideas, but then when it really comes to the crunch, they’re afraid.

You mean when it comes to the implementation?

Yes. That’s the reason why the big industries often have problems. The executive boards and managers are measured by today’s results. They are paid for making money today and tomorrow. It doesn’t matter what happens the day after tomorrow because they probably won’t be there by then anyway. So if, for example, they have to invest in what happens the day after tomorrow, that is deducted from the profits of today’s results, so you end up with a minus. No one is going to be happy about that. As a founder you see it very differently. I don’t think about today, nor tomorrow, but about the day after tomorrow and about what comes after that. That is my vision and where I want to be. That’s the big difference.

What three pieces of advice would you give managers when it comes to the future viability of their organisation?

It’s not that simple. I believe that we often restrict people, and if you keep on just being paid your wages, then you don’t necessarily have to make any changes. Fortunately, there is a new generation emerging. Young people don’t necessarily want to work at Siemens or Mercedes, they are preferring to establish start-ups, and that’s a good thing. It’s really important to work together and to be open. Today I was sitting down with a big German industrial company and laid out pretty much our entire plan in front of them. I wasn’t worried that they could copy our idea. I know that they’d never manage to do it the way we plan to. I have nothing to be afraid of because they profit from working with us and vice versa. Large corporations have to work with the newer ones and also with start-ups. Only then will change start to happen. A lot of the big companies of recent years are still going strong because they’ve invested in the right start-up. It’s very important to have the right intuition for people and to invest in them. After all, it’s not about technologies or ideas, the only thing that counts are people when you want to start a company, despite all of the difficulties involved. Especially when you’re doing it without capital. You don’t have to support them with money either, but with resources, with advice, perhaps even with human capital.

Mr Ahlborn, thank you very much for talking to us.

Taking to the stage at Innovation Day in Munich: Hyperloop founder Dirk Ahlborn and Joana-Marie Stolz, Head of Cultural Strategy at Serviceplan.

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