 Live from Nice, France, it's theCUBE. Covering Dotnext Conference 2017 Europe. Brought to you by Nutanix. Hi, I'm Stu Miniman and this is Silicon Angle Media's coverage of theCUBE at Nutanix Next in Nice, France. Really excited to have on the program Rob Lloyd who is the CEO of Hyperloop One off of the keynote this morning. Rob, thank you so much for finding time to join us. It's great to join you. So it's interesting, I've been watching Hyperloop since kind of the day one when it got announced. I'm studying mechanical engineering, so transportation's something I looked at, but I've been in the tech world. I knew you back from your Cisco days and when I talked to some friends of mine that didn't know about Hyperloop, you kind of explain it was like, oh, remember the bank pneumatic tubes? It's like, we're going to do that with people. And they're like, that sounds crazy. And then you say, well, Elon Musk is behind it. And they're like, well, okay, another Elon Musk thing that's probably going to be near impossible, but they will find a way to make it work. So you talked a little bit about your journey in the keynote this morning, but let's start Hyperloop One, pre-revenue, give kind of a thumbnail of the company and where you are today. So it's a three-year-old company, literally in a garage in the very late part of 2014, our founder co-founder started on November 2nd. So just an idea. A white paper that Elon wrote, which was the concepts of something very different, a new mode of transportation, slightly outraged by the expense and archaic nature of the high-speed rail in California proposal. So that's the starting point. A company that was founded, co-founded by Sherwin Pishavar of Venture Capitalist and some brilliant engineer, Josh Geigel. Now, from that point, 300 people, $245 million raised, and just this summer, having only started on the designs, tested some concepts, a magnetic levitation, and a custom-designed linear electric motor, evacuating a tube to the equivalent of 200,000 feet above the Earth's surface, we built a full-scale prototype. 500 meters, proved the tech is working, and the cool part is that the speed with which this engineering and development is occurring is like nothing else. So it's kind of DevOps for hardware, and we saw what happened when people kind of went to agile development methodologies. We saw it in tech, but it really hasn't hit the traditional methods of transportation where people build in silos, they're not closely associated with a fabricator or a welder, and we have mechanical engineers working with fabricators, working with welders, and you make amazing progress when you see that happen. You stated it's been over 100 years since we had kind of a major new transportation model. The tooling that allows you to prototype this, I know it's kind of a friend of mine, it's watching the space stuff, and watching the videos that you put out, everything from testing the engine to the pods. If I remember right, wasn't there a contest around the pods too? Yeah, well actually, yeah. So the tools we have today, the analytics tools, the way we can model things, didn't exist when we did our first moonshots, when the United States said we're going to put a man on the moon and NASA was mobilized and the country was excited. We didn't have the tools we have today. So we have much, much better tools. We have methodologies and approaches that are not accepted everywhere, but are embraced in our company, and you make things happen that we're taking five years from an engineering perspective, and you can build a full scale prototype in 10 months, that really changes the speed with which this can occur. Most people say this would take a decade. This is going to take three years. As I said, like other Elon Musk companies, you've got strong conviction at Hyperloop One. Some of the things that kind of skeptics come up with reminds me a lot of autonomous vehicles. Well, regulators are never going to let it happen and gosh, safety, it's like, I'm putting software is going to do this, we're going to be going at what speeds and how fast and all these things. How long is this going to take before it's reality? Can you give us a little bit of that roadmap as to how we make sure that once somebody actually goes in this that they're not going to end up just completely flattened? So the way that we're approaching this is actually different than the way in which most new technologies are regulated in transportation. We're going to partner with one or two countries. We're going to partner with the regulator while we're designing the commercial version of our technology. So while we commercialize, which is the next two to three years of our roadmap, we know the tech works, now you build a commercial offer. You build the car, you build the pod, you build, we will commercialize this. We're going to work with them now so we don't come to them in three to five years and say, would you please certify this? And in doing so, we actually bring a huge opportunity to the countries that go first. We ran a global competition, kind of AKA Peter Diamandis who's on our board like the X Prize. We actually asked countries who'd like to build the world's first Hyperloop. 2,600 people registered, 100 series submissions, dozens of them are now real projects moving forward with government support. So the short answer is, we have to do it differently. We're going to partner with the regulator while we're commercializing the tech and then when we get there, of course you want it to be safe. Of course you'll need certification but you do that now rather than later and you'll end up bringing benefits to a country that chooses to go first. So did I hear right that the first solution is probably going to be in the Middle East? There is a good probability that's the case. The land is fairly flat. We can build along existing right-of-ways. There's massive investments in airports and ports there. And so kind of wherever there's a very dense transportation hub today, airports, downtown centers, connections to metro or train stations, that's where we want to put kind of a Hyperloop portal. So think of it as the backbone between two data centers. All the activity going on in the data center, we want to connect those high density locations but it's not just one, one-to-one, we can branch on and branch off. So it's sort of like point-to-point packet switching. Yeah, one of the things that really excited me in your presentation that I didn't know as well is you talked about kind of the sustainability energy of this compared to other options as well as the affordability, something that really could help a lot of environments. Could you speak to those? Yeah, so there is absolute science about the substitution rates that will go to a faster mode of transportation if the price is right. So our model as we analyze opportunities around the world in the United States, in Europe, Northern Europe, Canada, India, and the Middle East where we see a lot of our projects today. If we price at the same price level of the current mode of transport, you'll get almost 100% conversion. Because why not? Why wouldn't I go in nine minutes to Abu Dhabi from Dubai instead of what could be a two-hour car drive? But why not price it for the ticket of a metro ride? Then you'll get really high ridership, high utilization, the economics of building infrastructure, a PPP structure that would bring private equity, debt, pension funds, sovereign funds together to invest in that new infrastructure. That's how it's going to work. So that's the passenger case. And then on the freight side, seriously, we forgot that this on-demand economy is based on a transportation network that effectively is 100 to 200 years old. Steel cans, right? This idea of a container was invented, a standard-sized container that goes on ships. The ships unload them in ports. They sit a couple of days. Then a truck puts it on the back and they drive through our cities, or it goes on the back of a train and takes seven to 10 days to get to its consumer. That doesn't work anymore. In this world of Amazon on-demand Alibaba commerce, the only option they have is to pay for air freight, which is five to six times more than it would cost to carry those same packages and goods in a Hyperloop cargo system. Okay, this is a huge opportunity. Rob, speak about the sustainability, kind of the energy required for this compared to other modes of transportation. We take some energy to remove the pressure inside the tube, which obviously reduces resistance. It's an all-electric motor. Because we have little resistance and no friction because we're floating on magnets, effectively floating on a magnetic cushion, once you're up to speed, you're pretty much gliding, like gliding in space. And so... What speed do we think that'll be? And by the way, this really is, I'm being very candid, it depends on the route, it depends on how straight we can get it right away, it depends on the level, so flat and straight means you can go fast. If you're going to go 300 kilometers, we could go six, seven, 800 miles an hour, which is faster than an aircraft. And obviously city center to city center, then we don't have the drive of an hour and a half, the vagaries of weather and all that other stuff, which has made air travel for most of us just a somewhat demoralizing experience. So, solar power, wind power, and in some environments where we do have a lot of sun, we can just have the tube covered with solar panels and make the entire thing energy-neutral, which is really, really amazing. A new mode of transportation that doesn't consume any energy. Yeah, maybe Elon can help with some of the solar stuff. I think that's good. How much has Elon involved? So he's not involved in our company. His idea, right? His brainchild, our company was formed to commercialize that and there are others that are now in this market. I think we're the leader. No, I know we're the leader. We've demonstrated the technology no one else has and we're there. I mean, this is a go-for-it business, so we're going for it. Well, you just had a new partnership with Virgin announced, absolutely. So Richard Branson, you know. Yeah, so Virgin Hyperloop One, a brand that actually has been known for customer experience, thinking of the customer, delivering an experience, taking on the giants as he did with Virgin Atlantic, putting people into space now from a commercial perspective as well as satellites. So think of his companies in transportation and how that brings comfort to governments and investors that we're here to actually really make something big happen and Richard's done that. He's a serial entrepreneur and that brand typically stands for an excellent experience. Yeah, and, you know, he's a pretty good track record as a risk taker out there too. Some of the extreme things that he had done, but absolutely the comfort and the brand there. Pre-revenue, he said a couple of years until we're there but you mentioned even that you've got kind of a pipeline of orders already. So it sounds like- Well, the projects are big, so this is infrastructure. We won't be financing that. That will be done by people that find governments and pension funds and sovereign funds and insurance companies that invest in infrastructure. But if you take a look at the projects, because they're big, they start with billions and they go up from there. So it's kind of fun to think that your first order could be three billion. It's kind of neat to go from this pre-revenue stage to the size of projects that we'll have. That three billion will be spent on, some will be on contractors, some will be on infrastructure. But for us, the revenues that will come will be high margin. We're building a software platform that will connect with other modes of transport and manage the massive amounts of data we'll be collecting off the pod and the track, the headway between these vehicles, which could be as close as 10 seconds traveling at that speed. And then obviously you've got to have a whole lot of control software and a whole IoT platform built in. Last question I have for you, we're here at a technology show and just throughout their software, massive amounts of data, I've got to have the analytics going into it and there. The tech already, how's the industry doing to support some of these kind of moonshot type of activities? High speed networking is going to be a big deal for us. So we probably need kind of an evolution of 5G because we're moving so fast inside that enclosed area that we're going to need some radio technology to keep all of those devices connected. That's a little bit of a push. Listen, we're starting from scratch. So we have a clean sheet. So we have no legacy to integrate. That's typically an advantage. We're not trying to do mechanical switching. We'll do a digital switch, which means you'll actually just bump a vehicle off onto an on ramp and weave it back in with software, kind of like packets on the network. But clean sheet, I think we have tools required to do everything that we're looking for today. An industry that's evolved has developed around IoT and a plethora of options that our architects and engineers are working on today. Gosh, all my background thinking about packet loss and things like that, it gets me a little bit nervous, but I know you've got lots of engineers working to solve that problem. Rob Lloyd, Hyperloop One, really appreciate you joining us. I'm Stu Miniman. We'll be back with lots more coverage here from Nutanix next in these France. You're watching theCUBE.