Elon Musk launched into the transportation infrastructure debate in 2013, stating that current modes of transport are too slow and expensive. He published the “Hyperloop Alpha” whitepaper, expanding on previous inventors’ concepts for a new form of high-speed transportation and suggesting that this was the solution for “the specific case of high traffic city pairs that are less than about 1500 km or 900 miles apart” . Musk’s opinions often incite public controversy, and this whitepaper was no exception: prominent business leaders and academics raised doubts about the concept’s safety and technical feasibility [2,3], and stressed the difficulty of making the project profitable – noting that the transportation infrastructure projects’ high capital costs and adoption risks typically compel public rather than private funding .
Musk’s SpaceX and Virgin Hyperloop One, both private companies, launched two open innovation programs to address these concerns. The first, SpaceX’s Pod Competition, focused on the technical challenges, awarded its most recent trophy to a German team whose prototype propelled itself from a standstill to 457 kph on a 1.2km track . The second, Virgin Hyperloop One’s Global Challenge (VHOGC), was a startup’s attempt to outsource its commercialization effort, asking entrants to develop a business plan for launching the VHO Hyperloop in the entrants’ home markets .
The VHOGC has achieved the company’s initial goals: quickly review the potential of a wide range of markets, then focus VHO’s efforts on development of the best prospects. It did this by adapting entrants’ incentives across the timeline of the program, first maximizing the breadth of markets by promoting independent work in the initial “ideation” phase (by promising to select 12 winning teams out of the 2,600+ competitors), then enhancing the success of top prospects by sharing best practices across the network of winning and finalist teams in the later “concept validation” phase.
In the ideation phase entrants developed business plans for implementing VHO’s hyperloop technology in their home regions. Winners and finalists were selected based on their “demonstration of a real corridor opportunity, favorable economics, a favorable investment climate and the willpower to advance regulatory climate” . This phase was competitive, motivating entrants with the satisfaction of working on a topic of interest to their home region, and the promise that winning teams could work with VHO to validate their business plan in the second phase.
VHOGC is now in that concept validation phase, which inverts the initial phase’s competitive feel by organizing the winning and finalist teams into a collaborative community. In the short term VHO will work with the selected teams to validate their business plans, and in the medium term it will give those teams the opportunity to participate in the execution of their plan during a third “implementation” phase. In lieu of public information about these second and third phases, I will lay out my suggestions for how VHO should proceed and identify a few key issues for readers to consider.
Short term: One key risk to VHOGC is the possibility that the concept validation phase’s collaborative feel will create the perception that winning teams have already “made it,” and offer little motivation to continue innovating. VHO can counter this by announcing new policies to reintroduce a competitive element: first, that VHO’s constrained resources limit their implementation phase support to a subset of the winning teams, and second, that winning teams will be replaced if their progress is eclipsed by one of the finalist teams.
Medium term: VHO’s current technology development process is entirely internal because VHOGC’s scope was limited to the company’s commercialization opportunity. Should they encounter any intractable R&D issues, they could launch a technology hackathon to harness the power of Open Innovation in a new context. This hackathon would attract a different group of technologists from those participating in SpaceX’s Pod Competition; those entering Pod are interested in developing greenfield technology for a broad issue (“design your own hyperloop”), while those entering the VHO hackathon would be interested in the program’s narrower scope (“work with VHO to fix this discrete technical issue”). Moreover, the fact that VHO’s R&D team is already funded and operating (compared to the bootstrapped teams entering Pod) offers entrants a stronger chance that they would have an opportunity to implement their hack.
Questions for readers:
- Short term: What are VHO’s options for continuing to engage the members of winning teams after the “concept validation” phase has ended and the “implementation” phase has begun? How should it decide between these engagement models?
- Medium term: Should VHO launch a technology hackathon to fix any future R&D roadblocks? If so, what are the factors they should consider in determining the scope of technical issues to cover in this program?
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- Musk, Elon. Hyperloop Alpha. Aug. 2013, spacex.com/sites/spacex/files/hyperloop_alpha-20130812.pdf.
- Gates, Bill. “r/IAmA – I’m Bill Gates, Co-Chair of the Bill & Melinda Gates Foundation. Ask Me Anything.” Reddit, 27 Feb. 2018, reddit.com/r/IAmA/comments/80ow6w/im_bill_gates_cochair_of_the_bill_melinda_gates/dux5evg.
- Moskvitch, Katia. “Scientists Explain Why Hyperloop Is so Dangerous and Difficult.” WIRED, WIRED UK, 26 Oct. 2018, wired.co.uk/article/elon-musk-hyperloop-boring-company-trial.
- Bradley, Ryan. “Elon Musk’s Hyperloop Sounds Impossible, but This Company Is Making Impressive Progress.” MIT Technology Review, MIT Technology Review, 21 Oct. 2016, technologyreview.com/s/601417/the-unbelievable-reality-of-the-impossible-hyperloop/.
- Hawkins, Andrew J. “WARR Hyperloop Pod Hits 284 Mph to Win SpaceX Competition.” The Verge, The Verge, 23 July 2018, theverge.com/2018/7/22/17601280/warr-hyperloop-pod-competition-spacex-elon-musk.
- “HYPERLOOP ONE GLOBAL CHALLENGE.” Competitions, Quizzes, Hackathons, Scholarships and Internships for Students, 28 Oct. 2016, com/o/hyperloop-one-global-challenge-hyperloop-one-19054.