It’s a bird, it’s plane, or is it blockchain?! Vladimir Smerkis’ interview with HyperloopTT CEO Dirk Ahlborn (for Forbes Russia)

Hyperloop. Is it a bird or is it a plane? It’s not even a train, it’s a completely new type of vehicle introduced by Elon Musk. It uses a so called magnetic levitation principle, runs inside a vacuum tube and offers you a ride at the speed of sound. Exciting, huh?! The transportation system of the future is now being built by Hyperloop Transportation Technologies, a company formed using a crowd collaboration approach. The head of HTT Dirk Ahlborn, German-American entrepreneur and tech guru met with Tokenbox co-founder Vladimir Smerkis for an interview for Vladimir’s column in the Russian edition of Forbes magazine. They met in Moscow during the World Cup, just days after HTT signed a historical agreement with China about building a Hyperloop line in Guizhou region. What happens at the HTT construction site in Touluse, when the first 10 km of the line should be built and how Dirk Ahlborn and his team use the benefits of blockchain — read the whole interview HERE.

So we know that HyperloopTT began construction of the first full-scale passenger and freight prototype system in Toulouse, France, and expects delivery of the first passenger capsule later this year. The capsule will be assembled and optimized in Toulouse, France, prior to use in the Emirates.

Let’s elaborate on Toulouse — what exactly is going on there right now? And when do we see the capsule?

Toulouse is about working together with other companies, our partner companies on new technologies, future technologies — it’s not so much about building a prototype as it is about being able to test out everything — the levitation technology, new technologies in our R&D Lab. We are ready right now to build Version №1, so there is going to be full functional system so we could test things out in the same environment, this is very important. The capsule will be ready in a month and a half, I guess, it is going to go to Toulouse at first. So we’re already building.

Do you have the release date?

I’d say September.

So the capsule is being assembled somewhere else?

Yes, in Spain. And then it will be transferred to Toulouse in order to be optimised. All the tests will be done at the factory. And it’s not about testing the capsule itself, it’s about finding an integration.

And why Toulouse was chosen?

Because it is a centre of aerospace technology in Europe. It is called the Aerospace Valley. There’s an amazing eco-system of technological companies in aerospace sector. We have already started innovation projects with about 15 companies. In addition to that there are also very high-skilled people, so you can really find the best people.

And what happens to the capsule when it is tested?

It is going to go to Abu-Dhabi on the first commercial line. Now we have first 10 km stretch in Abu Dhabi. And we work with Aldar, the largest real estate developers in the Emirates. The important part is that we need to start working on regulations and certifications in differents countries and this is what we do right now in China and Emirates, in Ukraine as well.

Why didn’t you start with freight system, rather than a passenger line?

Most people actually don’t care about freight being moved. However, from the business point of view freight is an important part, so we work on this where application of freight really makes sense, for example China, Russia and Ukraine. While most of the goods from China are still transported by airplanes, our technology will reduce this time from several weeks to several hours.

Are you going to be the first passenger of the Hyperloop train?

Of course, I have been working on this for so long!

You said that legal stuff should be done before the beginning. What is the biggest barrier?

We are moving over to the commercialisation of the system, which means that we work with Munich Re, one of the best insurance companies in the world, to create the necessary policies. There is a risk report that says that they can insure our system, and now we are moving on with that so we are actually creating the necessary policies. We will also be working with the safety institutes to create the safety standards. As every country standards are different we are trying to create different pilot projects, on which we can create certification and regulation. I am expecting that once we have the first couple of policies it is going to get easier. Honestly, you never really know what happens, so when you start working with one country the government might change for example, so we work on different destinations in one time.

What are the other obstacles except technological or legal risks? What it takes for the technology to become widespread and massive?

Regulation is really the obstacle. We have to prove all the numbers that we have so far. Again, it’s not so much about the speed, but its about efficiency. Even first countries of the world don’t have the good infrastructure, because it is very expensive not only to build but also to maintain. Countries need to use their taxpayer money to pay for the subway, and for the system. So building something that makes economic sense by itself, that creates the business for itself — that is the right approach .

Is it true that in the US to buy a land for the tube is even more expensive than to build it?

You can always buy cheap or expensive land. In New York it will probably be very expensive. The real problem in America is acquisition, and the laws. For example, I need this piece of land, and this is the money I’m willing to pay for it. In America it does not work. If the land belongs to someone then its owner will not give it back. You have to fight for 2000 kilometers, which are necessary for the implementation of the infrastructure project.

Couple months ago you signed an agreement with Ukrainian government, so why Ukraine?

They have big issues with infrastructure. However, they want to build something completely new to improve the transport system as a whole, so they reached out to us and we talked to them as it is our business to give the governments the technology.

So you are going to build a line or just share the technology with them?

Our business model is that we are the technology providers, we licence our technology. We are working with the government, because we need to create the regulatory base. Now we only came to basic agreements and the development is really on early stage, Ukraine has to decide in which area the line will be built.

You have been to Saint Petersburg Economic Forum and met Mr. Putin, does it mean that Russia will also have a chance to have Hyperloop?

Of course. I think Russia is a perfect place for the technology. In general, I think that Russia is in challenging position right now. Also our connection with China will also be good for Russia.

So what about China?

We have signed an agreement with Tongren Transportation & Tourism Investment Group of the People’s Republic of China. Guizhou, and this is the area that Chinese government wants to actively develop. This is an entrance to Tibet. The first Hyperloop line they want to build exactly there. We will begin with the construction of the first 10 kilometers, which will later be connected to a longer line. This is the first hyperloop agreement with China and marks the twelfth agreement for HyperloopTT and the third commercial agreement for HyperloopTT following announcements in Abu Dhabi and Ukraine earlier in 2018. HyperloopTT will be responsible for providing technology, engineering expertise, and essential equipment. Tongren will be responsible for certification, regulatory framework, and construction of the system. HyperloopTT will work in partnership with the government of Tongren in defining the route for the system. Financing will be done through a public private partnership with 50% of the funds coming directly from Tongren.

So for now you have France, Emirates, Ukraine, and China.

We have more, but it depends on which stages. We have been working with several governments for quite some time now, doing technical and economic research. We also have Slovakia, Czech Republic, in USA it’s Cleveland and Chicago. In France we have our site in Toulouse. In Brazil we have an innovation center. In Indonesia and India technical and economic research is being carried out. In South Korea, we license our technology and give it to the local government, which announced their desire to build Hyperloop and have already created a whole consortium to implement this idea. We help them and advise them. So we try, as a whole, to give progress all over the world.

How much will it take to build 10 km stretch?

The first 5 kilometers will be built by the end of 2020. The most difficult is not even the construction, but obtaining all permits. In Toulouse we had to spend a year just to do all the paperwork.

You said that your company is one of the bright examples of a distributed team that seems to work from all over the world. How do you manage such a team and how big is it today?

When we started, I was part of non-profit incubator sponsored by NASA. We were looking for new ways of how to build business. Today, you do things online. Buy products, find yourself a boyfriend or a girlfriend. In America you can even get divorced on the Internet. But when you think about building a business it happens offline. You look for people, look for a solution to the problem, and six month later you find out year that you can not solve this problem alone. And if you find on the Internet one, two, hundreds or thousands of people that are passionate about the same idea, that help you, that give you their honest opinion, you can build a working platform, collect the opinions of these people, improve their business. When Elon Musk said that he was too busy with the SpaceX project to realize the idea of ​​Hyperloop himself, we thought that this is the perfect opportunity to try our team model. We incorporated the company and said that everybody who would like to join, please reply. We got more than 200 applications, attracted people who wanted to be a part of the project — back then, in 2013. Today we have more than 800 people all around the world. Basically they work with us for an exchange of stock options. About 50 companies work with us, some of them are the largest in their field. For example, Oerlikon Leybold Vacuum, one of the best specialists in the world for working with vacuum equipment. We do not have to reinvent things, we just work with the people that know how to do them. We have a staff right now of about 50–60 people that are managing all the others. It has huge advantages. For example, the best designer from Tokyo, or the best engineer in Moscow, it is better to work with them remotely than with mediocrities from around the corner. O a tech genius from NASA — why do we need him for 40 hours a week? We have enough hours of his time. This also saves us a lot of money, and we invest in building, not in research. And that is the biggest advantage.

Do you use the blockchain technology in your work?

Today we would probably use blockchain rather than stock options. We are looking for how we can use it now, but the regulations are not very clear. Our company is big now, so we need to be careful. We are very innovative company, so we are always looking to the latest technologies in different areas. It is not about holding an ICO, it is more about the use of the technology to build something that is better and data management data management is one of them when it comes to optimisation of trips and passengers.

Do you hold Bitcoin or Ethereum?

Of course. I buy and hold and even participated in some ICOs. There are some project that I do myself when it comes to crypto.

You are a technological and a business guru. How to spot which technology will hype in advance?

You don’t spot it — you embrace it. You look at all the technologies and if you think that upside is big enough — you should support it. Things happen you make them happen. There are several Hyperloop countries but we were the first one like 6 or 7. And if we didn’t make a work for first two years — there would be nothing. We are the one who push the things we believe in. I hope that Blockchain Technology will be used mostly by governments for the transparency.

But is the society ready for the full transparency?

I think that yes. The change will come. It takes time, because we have some people in power that don’t really want to. There was a story that I’ve heard, about the US military that wanted to help the local army in Africa. But African soldiers don’t have a bank account, so when the money wire arrived the soldiers never got the money. The general took them all. And the US militaries have been working for 15 years trying to get the money directly to the soldiers. But the general in the middle delayed the process. I don’t think we need to show everything on the personal level, it can still be encrypted. Privacy is something that is important, but it is also something very new. Just decades ago you did something, then the whole village knew. So the important part now is to give the power to you: do you want to share your data, yes or no? But when it comes to governments it is different as it is all of us — we should have the right to know. It will make everything simpler and more organized, in many areas. For example, think about construction, about what we do. You have suppliers, they have deadlines, but in 2 years time the road is still not ready, and it may take 5 more years and cost 5 times more and you don’t know why. If you put it on the blockchain the suppliers have smart contracts, and if you are late you just don’t get the money. It’s very straightforward. I really thank that small countries will integrate it very soon, and bigger countries will follow. Ukraine and Estonia already do amazing things.

Still looks like communism, isn’t it?

I’ll tell you what, to get a Russian visa is really a pain. When I was buying my tickets to the football game I just used my fan ID, and the whole process took 2 minutes. 2 minutes! I even tried to cancel my tickets, as I was in LA for just one day and thought there was no way to get my visa.

Basically, blockchain is still in its early days. I’m sure there will be some kind of evolution, and it’s exciting.

Read it in Russian in Vladimir Smerkis Forbes column: http://www.forbes.ru/tehnologii/364841-ne-poezd-i-ne-samolet-chto-nuzhno-znat-o-hyperloop

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