Dirk Ahlborn is a German-born entrepreneur who found success in crowdfunding projects. Ahlborn, along with a large team of workers spread across the globe, is now working to make Hyperloop travel a reality. The innovative system promises to transform transportation by reducing the cost of travel to almost nothing, decrease travel times tenfold and run on nothing but renewable energy. Both Ahlborn’s past ventures and his leadership of Hyperloop have utilised unique and innovative business structures which Ahlborn claims are ideal for the Internet age. We sat down with Ahlborn and chatted about how Hyperloop’s business model has fascinated business schools across the world.
What do you believe to be the most interesting part of Hyperloop’s business structure?
Building the Hyperloop business model taught us a lot about communication. It used to be all about putting as many engineers as possible onto one problem, but we quickly realised that smaller teams are way more efficient. A team of more than eight people tends not to communicate as well as one with fewer members. Rather than having larger teams, we pose the same problem to different groups and see if they come up with different solutions.
How did you begin building the model?
We used a completely new model. I was part of a non-profit incubator funded by NASA that aimed to help entrepreneurs build a better company. Today, we do everything online – you do your grocery shopping, your dry cleaning, and you can find a partner online. When it comes to building a business, it tends to be you and a friend in a closed space trying to fix a problem that, after six or seven months, you realise nobody else cares about. If you could find, say, one hundred people who are as passionate as yourself and are willing to really offer their criticisms, insight, and contacts, you would be able to build a better company. When Elon Musk said he was too busy with Tesla, we used an online platform to source engineers who would be interested in the project and then offered to pick it up. We then asked those we found on the platform if they would like to work in exchange for stock options. If they agreed, we asked them to apply. They would only have to work a minimum of ten hours per week. After that, we continued to expand and went from a team of around one hundred engineers to the team of eight hundred that we have today.
What is the role of management in your business model?
Today, the company has around 800 employees across the world, in addition to fifty other companies and a large wider community that we consult with. Harvard did a case study about us and started teaching the case last year. The model changes the fundamental way we manage. Workers invest their time and spend less time with their families in exchange for engaging work that they know will pay off in the future. Our job as managers becomes ensuring that these people feel that their work is meaningful.
Is the hierarchical business structure a bad fit for the Internet age?
Some vertical organisation is still necessary, but there must be the possibility to connect the top with the bottom. Without that, the company becomes subject to the same limits that sees communication wither in larger teams. We are trying to make the company an “ideacracy” – based on who has the best idea, rather than who has the best title.