E134: 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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