Feature: Motown, California
The noise will not surprise the folks toiling in a strip of auto repair shops here in the San Francisco suburb of Burlingame, Calif. But as Ian Wright eases his vehicle out of his garage and into traffic, his passenger, having just been introduced to the Wrightspeed X1, has no idea what to expect. After a quick mirror check, Wright stomps on the gas pedal, producing a huge sucking sound, like that of a jet engine. For the automobile industry, this might be the sound of the future.
“Not bad, huh?” asks Wright, a slight, 50-year-old native of New Zealand. Beaming after making a zero-to-60-mph run in a blink over three seconds, he does not wait for a response. “This baby is all about performance,” he says.
True enough. His prototype is an electric sports car that has bested Porsche Carrera GTs on the track. In production form, Wright’s vehicle could exceed the speed, acceleration, and power of the Bugatti Veyron 16.4 (254 mph, 2.5-second zero-to-60-mph time, and 987 hp). And, with a projected price tag of $120,000, the X1 would do so at about one-tenth the cost.
The Tesla Roadster electric sports car, with its brilliant mix of science and sex appeal, has grabbed much of the car-of-the-future limelight of late. (Robb Report featured the Tesla on its October 2006 cover.) However, in addition to Tesla, a number of other companies operating in the hills and valleys along scenic I-280 are experimenting with ways to alter and improve, radically so, a machine that has remained relatively unchanged throughout its 100-plus-year history. These firms’ innovations, ranging from telematics to alternative fuels, eventually will influence the products coming out of Detroit and other auto capitals.
This is not to suggest that Silicon Valley is the next Motor City. No one here envisions automotive assembly plants sprouting next to silicon chip factories. But Motown execs are keenly aware of the products being developed here, and the mavericks making these products know the potential value of their creations.
Three years ago, when Tesla founder Martin Eberhard first trolled Palo Alto’s famed Sand Hill Road, home to the valley’s venture capital community, he would “just get laughed at,” he recalls. “Now it’s a different story. If you have an automotive product that is interesting, people listen.”
High gasoline prices and concerns about global warming in part have prompted them to listen. Investors also recognize that the Detroit auto industry is nothing if not monolithic, a beast that moves deliberately, taking as long as seven years to retool model lines completely. By contrast, the kids in the valley are not only fleet of foot (and cerebellum), they also are accustomed to changing direction at the flip of an equation.
“There’s a culture of entrepreneurship here,” says Eberhard, a 45-year-old electrical engineer whose passion for cars led him down this road. (Wright, who 25 years ago raced cars in Australia, was designing computer networking products before joining Tesla, which he left in 2004 to form Wrightspeed.) “Here in Silicon Valley, you’re supposed to risk, and even lose,” says Eberhard. “That’s not seen as failure. It’s seen as a badge of honor.”
If any product demanded a little risk-taking to propel it into this millennium, it is the automobile, says Paul Saffo, a Silicon Valley technology forecaster currently consulting for Stanford University. “Since the early 1900s, the car hasn’t changed much beyond a rolling carriage with a powerplant,” he says. “In the past decade, the car has become a rolling computer. Detroit’s problem is that they still think it’s a car."
Since Robert Noyce began working with microchips in the 1950s, Silicon Valley has been synonymous with bravado. Auto industry executives in Detroit, say some of the valley’s entrepreneurs, would benefit from adopting a similar spirit. “With car companies either having existing teams in this area or looking to establish that, there’s no doubt that Detroit is trying to capture the magic of Silicon Valley, the craziness that also seems to be carried through the water,” says Jeff Depew, a Silicon Valley entrepreneur who once ran General Motors’ OnStar division. “Nobody beats the valley for sheer innovation.”
Along with the craziness, says Depew, there is also a sense of camaraderie, even among competitors. “The valley brings together bright people from different nationalities and various industries,” he says. “As a result, if one person doesn’t know the answer, there’s a good chance someone they know does. And they’ll pass you on to them without their hand stuck out, and that’s amazing. Maybe it’s the karma thing. It might sound woo-woo California, but as a result, things tend to get done here.”
Maybe it is a concern with karma that also produces the comparatively minor preoccupation with rank and reward. As a venture capitalist with GrowthPoint Technology Partners, Laurie Yoler has seen her share of brilliant as well as not-so-stellar work from the local denizens, yet each project founder seems to share a common trait. “There are entrepreneurs everywhere, but the people here are used to taking huge risks before they even have any financial backing,” she says. “While others elsewhere might be concerned with the size of their office or their title and benefits package, people here are busy creating things that no one’s ever thought of. That’s their obsession.”
One source of such innovation is Stanford University. Already reaping countless millions from its role as incubator and sometime partner to successful tech companies such as Yahoo and Google, the university is eager to help the auto industry advance. Chris Gerdes has spent nearly a decade in the school’s mechanical engineering department, either overseeing or working on a range of projects, such as student-built, steer-by-wire cars and joint ventures with major auto manufacturers, including Nissan, which wanted help tweaking computers to render a higher level of engine diagnostics. Most recently, General Motors and Bosch gave Gerdes and his team $2.5 million of funding to investigate the production possibilities for an HCCI (homogeneous charge compression ignition) engine. If successfully developed, HCCI engines could be as much as 20 percent more efficient than today’s powerplants, and they would produce near-zero emissions.
“Detroit has great people, but sometimes for them to get things from the
research lab to the road takes quite a while,” says Gerdes. He notes that Stanford’s campus serves as a neutral territory for car guys from around the valley to gather, swap ideas, and pique interests. “In many ways,” he says, “I think Silicon Valley is what Detroit would look like if you started with a clean slate.”
DaimlerChrysler established its DaimlerChrysler Research and Technology North America in Palo Alto 12 years ago. Its president, Akhtar Jameel, says it is critical that companies such as his maintain close ties with the valley’s innovators. “Technology is a fast-moving industry,” he says. “Since we’re fellow travelers on that path, we think it’s best to align ourselves closely with these people.”
While remaining vague on specifics, Jameel says DaimlerChrysler is particularly interested in innovations involving what he calls “human-machine interaction”—actions that can range from changing the heat settings in the car to sending and receiving e-mails through the dashboard. He also is interested in technology that could prevent crashes. “We want to go beyond passive safety to active safety,” says Jameel, “beyond air bags and slip control. The web is opening our eyes up to possibilities.”
Paul Lego recently has realized some of those possibilities. His company, Dash Navigation, makes an aftermarket navigation system that is the first to be connected to the Internet. This enables the system to provide real-time updates that can alert drivers to accidents moments after they happen. But this is only one of its features. “Today, most navigation systems will tell you where the nearest movie theater or gas station is, but we’ll tell you what’s playing and how much the gas costs,” says Lego. “My vision of the future is one where everyone has a fourth screen. That is, beyond the screen on your TV, computer, or phone, you’ll have one in the car that is every bit as functional and connected as those three.”
Lego says that Silicon Valley companies such as his are uniquely positioned to push changes onto the agendas of Detroit’s automakers. But he acknowledges that doing so remains a challenge, for reasons that his own venture experienced. Lego rejected an offer to work with one of the automakers because, given the typical three-year Motown product cycles, his product, Dash Express, would not have appeared in cars until 2009. “By that point,” he says, “what we were offering could be very old technology indeed. So it is a bit tricky.”
It also is proving difficult to secure major funding from some of Silicon Valley’s top-tier venture capital firms. While Dash Navigation did obtain seed money from Kleiner Perkins, other firms have not been so fortunate and have had to rely on angel investors, wealthy individuals who take fliers on new ventures.
Venture capitalist Yoler says firms such as hers tend to shy away from car-tech companies because “the automotive business is not considered to be high margin, while it is capital intensive.” However, Yoler has invested in Tesla and sits on its board of directors, because, she says, she views it as less a car company than a technology innovator. “Tesla’s built a cooling system [for the lithium-ion batteries], a software system, and powerful electronics to run the whole show, all of which are very valuable,” she says. “Detroit does concept cars great. But they never seem to get much beyond that. Companies like Tesla are taking those next steps.”
Ian Wright hopes to take steps beyond those conceived by his former companions at Tesla—though certainly he wishes them well. “Hey, I’ve got shares in the company,” he jokes.
Although the X1 is battery-powered, Wright is not as concerned with a car’s emissions as he is with its performance, a sentiment born of his years racing in Australia. His aim for the X1’s successor is an even faster zero-to-60 time and a “Veyron-like run from zero to 100 to zero,” which, he says, the Bugatti does in a skin-peeling nine seconds. (The X1 performs that feat in 11 seconds.) Wright also wants to increase his vehicle’s range to 200 miles on a single charge—compared with its current 100-mile range—and ensure that the batteries last 15 years. The latter objective is critical, he says, because the lithium-ion units account for half the car’s $120,000 cost.
Wright is confident that if he can make the tech parts click, he will find buyers for his vehicle. “Tesla has nearly 200 orders after a few months of taking them,” says Wright. “If I can fill 100 orders a year, I’ll be profitable.”
But first he needs investors. Wright says it will cost $10 million to transform his prototype into a production-ready vehicle. “I’ll talk to anyone,” he says with an amiable smile. “Just the other month, I took a nice man for a ride at Pebble Beach [at the Concours d’Elegance in August]. He said one word afterwards: ‘Impressive.’ Later I found out it was Jean Todt, Ferrari’s racing director. Not bad from a guy like that, huh?”
Set just off a busy industrial drag, Wright’s one-car garage office suite is crammed with electronic gear. Wright, who does not draw a salary from the company, labors here daily, writing computer programs, raising money, and giving test-drives. It is obvious which of these tasks he prefers.
“Let me show you how she corners,” says Wright, over the whine emanating from the X1’s engine. Then he dives into an off-ramp apex that tests the strength of the heavily bolstered seats. When he stops at the next light, the car becomes eerily silent. Wright punches a button on the dash. “Okay,” he says, “.93 g’s of forward acceleration and 1.08 g’s of lateral.” When the light turns green, the X1 accelerates with a nearly neck-snapping force. The blur on the left is a Porsche dealership, where the new 911s on display seem, at that moment at least, like old news.