{"id":4603,"date":"2017-03-20T15:40:35","date_gmt":"2017-03-20T19:40:35","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/crowdsourcing-the-future-with-hyperloop\/"},"modified":"2017-03-20T15:46:23","modified_gmt":"2017-03-20T19:46:23","slug":"crowdsourcing-the-future-with-hyperloop","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/crowdsourcing-the-future-with-hyperloop\/","title":{"rendered":"Crowdsourcing the Future with Hyperloop"},"content":{"rendered":"

You\u2019ve probably heard of the Hyperloop. It\u2019s one of those words that often comes up in conversations with other exciting-sounding words like \u201cSpaceX\u201d and \u201cElon\u201d and \u201cthe Future\u201d (with a capital F). Zipping from LA to SF in 30 minutes through a vacuum tube? It may be closer to reality than you think.<\/p>\n

The Hyperloop technology was introduced by Elon Musk in a 2013 white paper, and shortly thereafter, two companies were established to embark on the challenging work of transforming that idea into reality. \u00a0One of the companies, called Hyperloop One, is a traditional VC-backed startup; the other, Hyperloop Transportation Technologies (HTT), is a crowdsourced endeavor that relies on the ideas and work of part-time collaborators. Which of these two equally creatively-named companies will be first to market to realize the Hyperloop dream?<\/p>\n

\"\"<\/a><\/p>\n

The beginnings of making Hyperloop a reality <\/strong><\/p>\n

HTT was born in 2013 out of JumpStartFund, a crowdsourced online incubator for early stage tech companies. As a collaboration\u00a0platform, JumpStartFund believes that its engaged community can offer validation around an idea in the early stages of a company\u2019s life, thus increasing the probability of finding product market fit. From its early days, HTT boasted an impressive slate of collaborators, including Ansys, a computer-aided engineering and simulation firm, which had already conducted an independent study on the feasibility of Hyperloop, GloCal Network Corporation, a materials science company, and the UCLA Architecture and Urban Design Department. Since 2013, a laundry list of global companies have since joined to offer in-kind services, including composites manufacturers, design and engineering firms, marketing firms and AR\/VR companies.<\/p>\n

What makes HTT truly interesting, beyond its lofty technological goals, is its crowdsourced structure. HTT has no full-time employees<\/em>. Rather, it has crowdsourced work from over 600 individuals, including \u201cmore than 200 professionals from 44 companies in 38 countries\u201d, who work on the Hyperloop project in exchange for stock options (even the CEO, Dirk Ahlborn, only has stock options as compensation\"\"<\/a>). These individuals work full-time at established organizations like Boeing, Airbus and NASA and dedicate weeknights and weekends to working on HTT; the company simply asks that they spend at least 10 hours a week on HTT, but there is no real enforcing mechanism.<\/p>\n

So far, investors, transportation companies and municipal governments seem to be buying it. HTT claims to have raised over $108mm in investment, though only $32mm is in cash investments from VCs and the remaining non-cash portion is attributed to man-hours, services rendered, land rights usage and future in-kind investments (a rather unique (perhaps, loose) definition of investments). The website states that they\u2019ve signed agreements to build in California (Quay Valley), Slovakia, Abu Dhabi and Toulouse, with the expectation that they will test a demo train in 2017. HTT has further demonstrated its market validation through a collaboration with Deutsche Bahn to build an \u201cInnovation Train\u201d, a conventional train that will use innovative technologies developed by HTT.<\/p>\n

Does a crowd maketh a company?<\/strong><\/p>\n

W\"\"<\/a>hile it has certainly shown thus far that it is adept at securing partnerships and signing on early market testers, HTT calls into question the fundamental question of the benefits of crowdsourcing for this particular problem. HTT\u2019s leadership believes that crowdsourcing allows them to gain access to the best global talent at a lower cost. This crowdsourced nature allows the best ideas to surface, an important process for a project as visionary and untested as this one. The stock option structure ostensibly incentivizes collaborators to care more deeply about the success of the company, and the collaborative nature socializes the vision amongst the community.<\/p>\n

There are some technical, project-oriented crowdsourcing success stories that HTT can point to. For example, rLoop, an open source group of 140 individuals formed on Reddit, was the only non-student group to reach the final stage of SpaceX\u2019s Hyperloop Pod Competition in 2016. rLoop individuals \u2013 hailing from the likes of NASA, Tesla and GE \u2013 used Google Docs, Slack and Trello to communicate and collaborate for the competition and never met in person.<\/p>\n

Despite the espoused virtues of crowdsourcing, many challenges lie ahead. From my perspective, some of the biggest challenges are as follows:<\/p>\n