Why Hyperloop Might Be the Secret Weapon That Makes Your Business Faster, Smarter, & More Profitable in the Future

Why Hyperloop Might Be the Secret Weapon That Makes Your Business Faster, Smarter, & More Profitable in the Future

I asked for the first ride on the Hyperloop…

Back in 1982.

That’s right, it was my idea to travel in sealed pressurized tubes at high speed long before it was even a glint in Elon Musk’s eye.

I was 5-years-old.

I was with my mother in the car at a bank drive-through lane and enthralled by the pneumatic tubing system in place to shuttle deposits and withdrawals back and forth between tellers inside the bank and customers in their vehicles.

Image via: Jane Rawson

“Mom, I want to get in and ride,” a wide-eyed earlier version of me remembers saying.

“Sit down, hun, and stop being silly,” I recall my mother responding.

Silly, huh?

33-years later, this past January to be exact, construction began on a small test track in California...

The Year it Becomes Real?

Okay, so the Hyperloop, at least on paper according to Musk, is to be an elevated high-speed tubular transportation system that’s a bit more complex than the pneumatically powered tubes I fell in love with at the bank as child years ago. However, the concepts that drove the creation of each are relatively similar despite the technology and decades between them:

  • Transport people or items faster than traditional means
  • Offer an unconventional alternative to the status quo
  • Improve efficiency and the customer or passenger experience

2016 may just be the year the Hyperloop jumps from a design on paper to something tangible, albeit in its infancy. In January, Hyperloop Technologies began construction on a one-mile test track to prove the concept.

Image via: Hyperloop Technologies

Note: While the Hyperloop is discussed as a single entity, there are multiple organizations like Hyperloop Transportation Technologies and Hyperloop Technologies as well as Musk’s SpaceX that are working on the concept or funding research. However, these entities are independent and even competitors in some cases.

The Hyperloop promises to transport people at nearly 800 miles an hour and dramatically reduce the time it takes to transport people between cities:

  • San Francisco to Los Angeles in 30 minutes instead of approximately 5 hours by vehicle
  • New York to Washington D.C. in 30 minutes instead of approximately 4 hours by vehicle

Image via: Hyperloop Transportation Technologies

One day, the Hyperloop concept promises to connect major cities around the U.S. and possibly beyond. Besides the prospect of being able to live and work anywhere, a Hyperloop transportation system boasts of advantages that might make other modes of transportation envious.

Here’s how Hyperloop Transportation Technologies summarizes it on the company’s crowdfunding page:

  • The Hyperloop is powered by solar panels placed along the tracks and is self-sufficient
  • The capsules are climate controlled and aren’t impacted by inclement weather or earthquakes thanks to the use of pylons
  • The construction costs are less expensive than traditional railway projects as it uses existing infrastructure
  • Cost advantages will translate into lower ticket prices allowing people to work in one city and live in another

Separately, another step forward was taken recently when a team of MIT students won a contest sponsored by Musk to design the Hyperloop pods that might one-day transport people. The group’s pod was judged to be safe, scalable, and feasible.

Image via: MIT

The Hyperloop’s Tailwinds

The beauty of the Hyperloop concept is that it kills many birds with one stone.

Let’s start with the traffic congestion that impedes productivity in major cities across the U.S. According to the 2015 Urban Mobility Scorecard, a study that investigates and measures the impact of traffic congestion in the U.S., traffic congestion levels have returned to pre-recession levels.

Some of the study’s more notable findings include:

  • Travel delays due to traffic congestion caused drivers to waste more than 3 billion gallons of fuel
  • Travelers were stuck in their cars for nearly 7 billion extra hours due to congestion – 42 hours per rush hour commuter
  • The economic impact nationwide is $160 billion, or $960 per commuter

While congestion is often worse in major cities, the study also found congestion impacting productivity in smaller cities, especially as energy prices have fallen and it has become cheaper to travel by vehicle.

Image via: Texas A&M

Bibop Gresta, COO at Hyperloop Transportation Technologies, suggests the Hyperloop concept can redefine what it means to be a city. “The world we conceive now will not be the same when the Hyperloop is up and running,” he says. “When you can live in L.A. and work in San Francisco the whole concept of a city will change.”

Even more important, the urban mobility study expects urban roadway congestion to worsen without changes in projects, programs, and policy. By 2020, the study concludes that with a strong economy drivers can expect:

  • Annual delay per commuter will grow from 42 hours to 47 hours.
  • Total delay nationwide will grow from 6.9 billion hours to 8.3 billion hours.
  • The total cost of congestion will jump from $160 billion to $192 billion.

Now consider that when you account for births, deaths, and migration, the United States sees a net gain of one person every 15-seconds:

Image via: U.S. Census Bureau

The population in the U.S. is expected to increase by 26-million in the next decade and nearly 100 million by 2060:

Image via: Statista

Remember, the Hyperloop concept, at least, as suggested by some, has global ambitions which means population growth in the U.S. is expected to be dwarfed by dramatic gains overseas:

Image via: U.S. Census Bureau

If millennials continue to live in or on the edge of major cities, you can expect congestion in urban centers to intensify. Now consider what Tim Lomax, one of the authors of the 2015 Urban Mobility Scorecard, says:

“Our growing traffic problem is too massive for any one entity to handle – state and local agencies can’t do it alone. Businesses can give their employees more flexibility in where, when and how they work, individual workers can adjust their commuting patterns, and we can have better thinking when it comes to long-term land use planning. This problem calls for a classic ‘all-hands-on-deck’ approach.”

The Hyperloop’s Headwinds

The challenges opposing the Hyperloop concept are just as formidable, according to critics, as the reasons for making it a reality. In fact, one prominent Hyperloop critic argues:

  • The Hyperloop’s cost projections are substantially low
  • The Hyperloop will offer awful passenger comfort
  • The Hyperloop as designed has very little capacity
  • The Hyperloop lies about energy consumption of conventional high-speed rail

The critic also takes a dig at Musk by saying:

“All of these come from Musk’s complex in which he must reinvent everything and ignore prior work done in the field; these also raise doubts about the systems safety that he claims is impeccable.”

Separately, there are additional obstacles the Hyperloop concept must ameliorate if it is to become a viable transportation alternative:

  • The Hyperloop would be competing, at least in theory, with taxpayer funded HSR projects like those in California that are already under construction. While Musk has certainly proved doubters wrong in the past, even President Obama’s first-term promise of a nationwide network of high-speed rail lines has largely gone unfulfilled.
  • While less expensive than HSR, according to reports, the HTT’s Hyperloop concept would cost approximately $20 million per mile. Remember, the assumption is that the Hyperloop will gain permission to use existing infrastructure. Even with the cooperation and financial support of public and private partners, the Hyperloop does not address the age old criticism of public transportation; the last-mile problem. Additionally, critics contend Musk’s cost estimates are extremely low.
  • Deadly bridge collapses and reports of drivers dying after chunks of concrete fall from overpasses aren’t uncommon in the U.S. The American Society of Civil Engineers grades current infrastructure in the U.S. as a D+ and estimates $3.6 trillion must be spent by 2020 to shore up our ports, highways, and bridges. Despite a recent $305 billion infrastructure bill passed by Congress, supporting the Hyperloop concept could prove difficult politically when portions of traditional infrastructure are in various states of disrepair.

Gresta acknowledges the regulatory and political hurdles that lie ahead. ”It’s not about cash, it’s about politics,” he says. “I don’t care though because I’m going to build this thing. I’d love for the first Hyperloop to be built in America, but there’s some catching up that must be done.”

The Decade After the Hyperloop

If the Hyperloop concept becomes reality, you can expect it not only to change how people travel and where they live but also how commerce is done in the U.S. and beyond.

In other words, a Hyperloop system that can transport people at the speed of sound may also possess the ability to transport products, prototypes, and machines just as rapidly.

Image via: Hyperloop Transportation Technologies

If major U.S.cities connect via the Hyperloop and if the system also eventually tunnels beneath water, the way you fulfill orders may eventually look nothing like it does today:

Image via: Hyperloop Technologies

NOTE: Gresta, the COO at Hyperloop Transportation Technologies, says the image above, created by a competitor, is fantasy. Gresta argues it’s not possible to connect continents with underwater tubes as the pressure on the tubes would be too great.

Depending on the final product, crowdfunders and others who wind up manufacturing overseas and commit to tight shipping deadlines might also get a bit of a reprieve with the Hyperloop’s cargo pod:

Image via: Hyperloop Technologies

The Hyperloop concept carries with it the potential to completely reimagine logistics. If the Hyperloop concept were to become a logistical cornerstone imagine the customer experiences you might create and how traditional logistics might have to pivot or adapt:

Reimagining Logistics

  • Shipping direct to customers from the factory or manufacturing facility, in just minutes or hours, could potentially cannibalize portions of the commercial air freight and ocean freight container shipping industries and further shrink the world

“We don’t want to antagonize the rail, air, or freight industries,” Gresta says. “But they will likely have to reposition themselves and adapt to the Hyperloop’s impact on freight.”

  • Hyperloop shipping ignites growth for on-demand manufacturing and replaces the current practice of strategically positioning fulfillment centers around the country much like Amazon, Walmart, and AutoZone does today

“The Hyperloop will change how business is done,” Gresta says. “Today just-in-time manufacturing is done within cities, but the Hyperloop will make it possible to manufacture just-in-time between cities.”

  • UPS and Fedex potentially repurpose their truck fleets as first and last-mile carriers dedicated to transporting finished goods from manufacturing facilities to Hyperloop system entry points and delivering products from Hyperloop end points to their final destinations
  • UberRUSH and drones compete with commercial vehicle delivery fleets for first and last-mile delivery fulfillment or are replaced, in part, by the locker concept Amazon has been testing in various markets regarding same-day deliveries
  • Machinery, equipment, or agricultural implements that are relatively stationary in nature today may be, if they fit in the pods that are created, instantly moved closer to end users, shared among entities that cannot individually afford expensive equipment, or otherwise reimagined as mobile factories or manufacturing centers
  • Enables companies with global footprints to perceive resource inputs, finished goods, and employees as easily and cost-effectively transportable and positions organizations to more perfectly match supply with demand, plug logistical talent vacuums with higher performers and rapidly determine an optimal mix regarding product selection or team building

The world is certainly a long way from realistically reimagining logistics in these ways and beyond. These scenarios might even seem foolhardy to the skeptical, practical, or those with a special interest to protect.

Gresta, the COO Hyperloop Transportation Technologies, even acknowledges the first Hyperloop will likely be built overseas. “It’ll be built somewhere else first, maybe Indonesia, the U.A.E., or China,” he says. “It’s happening and I’m going to do it but we’re probably fifteen years away from a Hyperloop in the U.S.”

While we’re a long way from reality, the idea of an actual Hyperloop might not seem as far fetched if you view it through the lense of your own business. How might you creatively use the Hyperloop concept to solve problems, deliver better customer experiences, or improve margins?

Below are several ways Shopify Plus customers might one day use the Hyperloop concept to reinvent how they do business:

  • Gaston Blanchet, co-founder of smart luggage maker Trunkster, would not necessarily have to fly to China to view a new prototype in April of 2016 but rather have the prototype shipped to his home on the Hyperloop a few hours after it’s complete
  • Martin Cieszewski, a marketer of the brain sensing headband Muse that people use to reduce stress and calm their brains, could instantly ship large quantities to destinations where demand from trauma victims would be impossible to predict accurately ahead of time; areas hit by natural disasters, humanitarian crises, or cataclysmic environmental or health care events
  • Rather than using traditional means to educate people about the story behind the brand, Griffin Thall, co-founder of Pura Vida Bracelets, could transport prospects and customers to Costa Rica to meet the artisans who handcraft the company’s bracelets and experience the brand in ways that have everyone back home before lunch
  • Rather than limiting himself to pop-up shops where he’s physically located, Nate Checketts, co-founder of men’s premium activewear maker Rhone, could use the Hyperloop to instantly ship the infrastructure necessary to create conversion-boosting temporary pop-up shops – anywhere pockets of loyal Rhone customers exist or outside conferences, business gatherings, or sporting events where Rhone’s target market may be gathered

Conclusion

Slipping into a sealed tube for a cross country or underwater journey at light speed that lasts only minutes but covers hundreds or thousands of miles or even using such a contraption to reinvent logistics can put rational, data-driven, entrepreneurial-minded business owners in a quandary:

  • You’re right to be skeptical the Hyperloop concept will ever come to pass anytime soon, or of the seemingly impossible ways it might be used to reimagine commerce
  • You’d also be right to imagine how it might position your business to become faster, smarter, and more profitable

Either way, it’s often the disruption we don’t see that leaves us licking our wounds and wondering what we could’ve done to keep from being Ubered. At the very minimum, pondering the potential of a concept that has raised tens of millions of dollars and counting can do us no harm and might even position us to take advantage of it all before competitors – should the dream one day become reality.

If it happens, it’ll be a far cry from those pneumatic tubes I wanted to ride in as a wide-eyed child at the bank.

But at least I’ll be able to tell mom she’s the silly one.



About The Author

Nick Winkler is a contributor to the Shopify Plus blog. He helps individuals & organizations generate new leads, make more money, and ignite growth with story. Get more from Nick here.