Episode 134: John "Jay" Rogers of Local Motors on This Week in Startups

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TWiST #134: John “Jay” Rogers of Local Motors

We love to see real-life products — and Jay Rogers, CEO and co-founder of the next-generation car company Local Motors, delivered by bringing the crowd-sourced Rally Fighter car to our studio. He and Jason discuss the Local Motors business model, the wisdom of crowds, DARPA having LM design a new military vehicle, electric cars and Jay’s military service (including a favorite Jason movie, “Black Hawk Down”).

Support This Week in Startups by joining our new producer program at twistlist.co!

0:00-0:30 Today we have Jay Rogers of Local Motors on the show, plus an Ask Jason and the winner of the .CO contest.
1:15-6:00 Jason reads off the 20 .CO finalists (see the list below).
6:00-9:15 Jason and Tyler discuss the .COs they like most.
9:15-10:00 Winner is announced: ihatemy.co gets the MacBook Air and speedbump.co gets an iPad 2.
10:00-11:00 Welcome, Jay — when did you get this idea?
11:00-12:20 Jason asks Jay, a U.S. Marine Corps vet, about going to war over oil.
12:20-13:00 Jay talks about his two deployments and starting Local Motors.
13:00-14:10 How the “wisdom of crowds” works in reality.
14:10-15:00 Industrial engineers are the dreamers.
15:00-15:45 How Local Motors uses creative commons.
15:45-17:00 Why people participate in crowd-sourcing a car (or anything): recognition.
17:00-18:30 : The business model for Local Motors: We make the cars the big guys can’t make (see the clip).
18:30-20:00 Making cars in a sustainable way, from the factory process to the materials.
20:00-23:00 Video of Rally Fighter shot that morning — this was Jay’s design with his wife and kids.
23:00-24:00 How many cars have been built?
24:00-27:00 Why the U.S. military asked Local Motors to design and build the XC2V (see the clip).
27:00-29:00: Discussion of how true to life “Black Hawk Down” is and why existing military vehicles fail to fill all battleground needs.
29:00-30:15 Many in the LM community have a background in transportation design.
30:15-31: 30 Trada ad.
31:30-34:00 Harnessing the community’s energy and how the LM community designed a shoe for Reebok.
34:00-35:00 Jay says the LM community could crowd-source anything, but the company will stay away from music and code.
35:00-37:00 Jay explains a component competition they held for the Rally Fighter.
37:00-38:00 Applications need to meet a basic standard — is it manufacturable? — to be in a LM competition.
38:00-39:00 How big is the company? And Jay gives the benefits of being LM CEO.
39:00-40:10 Are LM cars allowed to be on the road? Jay explains federal Department of Transportation rules.
40:10-41:45 Jay Rogers on who can be in the Local Motors community — and how to work with the crowd (see the clip).
41:45-42:30 Design contest for a 100 miles-per-gallon car? How the SpaceX program inspired Jay.
42:30-43:45 How to get to a 100 m.p.g. car and why compromise is needed if the car is going to have a large market.
43:45-45:50 Possibility of LM building electric cars and what Tesla has done and not done.
45:50-47:00 GoToMeeting ad.
47:00-48:00 Did Jay get to keep his KA-BAR knife?
48:00-56:40 Ask Jason with caller David Durall, who asks: My company doesn’t share data, but does the data have value to someone who acquires the company? Does the acquiring company have to honor my policy? [some legal background Tyler found]
56:40-57:30 Jason says he is speaking at the upcoming ReadWriteWeb 2WAY Summit, a gentleman’s throwdown with Nick Denton. Use code THROWDOWN for discount.
57:30-59:40 Jason promotes the new twistlist.co, our producer program that supports TWIST and gets you insider info.
59:40-1:00:45 Jay has 45 angel investors in Local Motors, Jason says he crowd-sourced his funding.
1:00:45-1:01:30 Profit in near term will come from contests. In the future, making the cars will have a greater legacy.
1:01:30-1:03:40 Have traditional auto companies expressed interest in using Local Motors?
103:40-1:04:45 Jason wants the XC2V, designed for DARPA.
1:04:45-1:05:30 Jay talks about being in combat.
1:05:30-1:06:50 Jay explains the Stockdale paradox (see Brad Feld’s blog post on this).
1:06:50-1:08:00 Jason and Jay talk about “The Hurt Locker” and post-traumatic stress disorder.
1:08:00-1:09:20 Jason thinks military guys make great entrepreneurs, and Jay encourages startups to hire from the military (LM has three vets in addition to Jay).
1:09:20-109:50 Thanks and closing.

Multilingual? Translate this episode of TWiST into another language and email the transcript to translate@thisweekin.com

BACKGROUND ON JAY, LOCAL MOTORS AND THE RALLY FIGHTER
About Jay

  • Has loved cars and model building since he was a child
  • Went to Princeton hoping to build cars but didn’t find anyone else who wanted to do it; graduated in 1995 and took a job at a medical startup in China
  • In 1999, was poised to start Stanford business school when he was recruited for the Marine Corps
  • Spent almost 7 years on active duty (southern Philipines, Japan, Korea); later deployed to Iraq; was a Scout Sniper Platoon Commander
  • While at Harvard to get his MBA in 2006, wrote the business plan for Local Motors
  • Inspired to start a car company that would change the face of automotive technology
  • Says that the pace of innovation in the automotive industry is way behind that of the software industry and wants to help change that
  • Motivated by feeling that Americans don’t realize their dependence on current fuel sources are enriching another part of the world (70% of American fuel use goes to cars and light trucks)
  • Lives in Phoenix with his wife, Susannah, and three sons, John, Charles, and Houston

About Local Motors

  • Founded in summer of 2007, Local Motors designs, manufactures and brings to market safer, more functional, lightweight and efficient cars
  • Poised to disrupt the auto-making, -selling and -servicing industry with their local assembly and retail experience
  • 27 employees
  • Model is the crowd-sourcing of car building: community submits designs (over 70k currently on the site), then votes to determine what gets built
  • First prototype was built in Boston (the Boston Bullet)
  • Community will vote on what car should be built next and car type will determine micro-factory location
  • Capital has been raised exclusively through angels, most of whom aren’t “car people”
  • Raised $8M over four rounds, with the same group participating from the beginning
  • All investors believe deeply in American manufacturing and innovation
  • Currently raising another (bigger) round
  • Expected revenue is several million on car side and another several million on the co-creation side
  • Launching a sister site in the fall that’s a vehicular co-creation community
  • Jay believes that our biggest crisis is how to finance innovative businesses and sees a shortage of end-product manufacturing businesses
  • Working with US military agency DARPA to build a military vehicle
  • Called the XC2V challenge, the prototype will be ready in June

About the Rally Fighter

  • The Rally Fighter is manufactured in Phoenix, designed to be driven in the desert
  • 155 people have contributed to the design and building of the Rally Fighter (designed by Sangho Kim), which is the world’s first crowd-sourced car
  • 15 have been bought, and another 139 people have put deposits toward one
  • Costs $5k to put down a deposit that includes a date to start building

TOP 20 .CO CONTEST ENTRIES

  • FakeGirlfriend.co — text a number to receive a text back and call from your “girlfriend”
  • PictureCord.co — be reminded to take picture of your kid every day, site automatically tags photo with child’s age
  • ProjectNauti.co — chip in to buy part of a real submarine and get access to it
  • ReTwist.co — place for all things related to the companies that appear on This Week In Startup
  • GoodByeCable.co — organizes all your online entertainment services so you can easily find shows/movies you want to see
  • PetFirst.co — online first aid course so you know how to treat your pet’s ailment
  • Evac.co — helps urban office workers plan how to escape get home in an emergency
  • Baat.co — “talk” in Hindi: Yelp-type app for Indian cities like Mumbai, also allows people to organize their own events
  • Speedbump.co — teen driving safety product that allows parents to set speed limits according to road type
  • Vaynerchuk.co — insights and video from Gary V’s interviews and talks
  • SportsThrowaways.co — distributes unused sports promo items (donated by athletes) and distributes them via an e-comm platform; proceeds go to charity
  • IHateMy.co — Post your resume anonymously if you hate your company
  • IsAnEvil.co — Aggregation of topics from Twitter API searches to spur discussion about companies doing good or evil
  • CodeStem.co — relational documentation for programming languages, displayed in a clever interface to make learning simple, fast
  • Kid-Safe.co — private, custom URL written on clothing tags stores your kids info (allergies, address, emergency contacts)
  • ChimpBay.co — eBay app that auto inserts a MailChimp newsletter sign up form into user’s eBay auction listings
  • Drivel.co — competitive, crowd-sourced topical blogging; bloggers highest ranked by the community share in the ad revenue for the day
  • Bloody.co — world’s premier community for all things Mixed Martial Arts/UFC/boxing related
  • Alfrs.co — find restaurants and bars where al fresco dining is available
  • NeedAHo.co — need we say more?

FOLLOW ON TWITTER

Jason: @jason
Tyler: @steepdecline
John “Jay” Rogers: @johnbrogers
Local Motors: @localmotors

And support This Week in Startups by joining our producer program at twistlist.co!

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  • judo

    You added the wrong video – this is last weeks…

  • Anonymous

    iTunes Podcast is the Earbits Joey Flores interview.

  • Anonymous

    Disappointed not to see at least one of my .CO entrants not make the top 20; even more disappointed having seen some of the ones that did, but oh well, I had no control over it.

    Would like to see a review of this contest in 1 year to see which entrants actually did something and how they do.

  • http://www.jasonnation.com jasoncalacanis

    This was a great show… really happy we had Jay on. We need more of these unknown, startup heroes!

    if only we had another couple of Producers to help us book the show! :-) http://www.twistlist.co baby!

  • http://www.jasonnation.com jasoncalacanis

    OH NO!!! is it fixed yet?

  • Josh

    Google listen is also the Joey Flores / Earbits episode even though it’s listed as this episode (Local Motors). Just an FYI.

  • http://twitter.com/dejardine Tim de Jardine

    local motors is not showing up in iTunes audio too? Its the earbits one from last week!

  • http://liferegistry.co Scott

    needaho.co isn’t even registered, even if it was, needaho.co really? Did the TWIST team even take this contest seriously?

  • Sarah Angelina DeLagostti

    Sounds Great ! I registered on your web site

    Thank You,

    Sarah Angelina DeLagostti
    http://www.DeLagostti-Industries.com
    CEO Extreme Engineer
    Manhattan NY City & TN
    United State Territories
    Skype I.D. SaraAngelina007
    DeLagostti@aol.com

  • Margaret Johns

    I was finally able to see the show, downloading it again this morning, It was originally downloaded as Local Motors, but was a replay of the previous EarBits program.

    John Rogers, CEO of Local Motors, is incredibly impressive and articulate. The show is much more than Local Motors, which would have been impressive in and of itself. I became curious about Rogers’ background and saw that in addition to being a Marine he’s an HBS, Princeton and McKinsey & Co grad . . .

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