In Silicon Valley, the mark of a successful entrepreneur is not how good his first idea is; it’s how well he pivots when that first idea doesn’t work out. San Jose Mercury News columnist Michelle Quinn recently wrote, “successful pivots are the stuff of tech industry lore, a critical gamble that resulted in great wealth.”
Which brings us to Ian Wright, founder of Wrightspeed. Wrightspeed, which now makes powertrains for trucks, just got a big order from FedEx; the company is comfortably funded, thriving, and hiring. But it nearly crashed and burned before making a pivot that I didn’t see coming — and neither did Wright.
I met Wright back in 2006. A networking engineer who had spent some time on the amateur auto racing circuit, Wright had been working on a plan for an optical switching company when neighbor Martin Eberhard told him about his new startup, Tesla Motors. Wright shelved his business plan and signed on as employee number one, eager for a chance to merge his two passions, electronics and cars. He worked on optimizing the Tesla One for energy efficiency, but became fascinated with the potential of the technology for high-performance cars — much higher than Tesla would be able to sell to a mass market. So he quit Tesla and set out to build the highest performance electric vehicle possible, without worrying about whether it would have much of a market.
He started Wrightspeed in 2005 and came up with the X1, a street-legal sports car that goes from 0 to 60 mph in 2.9 seconds. That’s still faster than the fastest Tesla. In 2006, he took me for a ride in his prototype, accelerating to 75 km per hour and pinning me to the passenger seat in the 45 meters or so between his parking space and the closed iron gate at the entrance to the parking lot. Out on the street, we raced from stop sign to stop sign and zoomed around a highway cloverleaf, pulling, Wright told me, about 1.4 G — though it felt like more. He had succeeded in building a high performance car.
Venture capitalists, it turned out, were not as uninterested in the size of the market as Wright was, and he couldn’t get the $8 million or so he thought he needed to turn it into a real business. He made the rounds of VCs throughout 2007 and got rejected again and again. Then one VC, Nancy Kamei at Intel Capital, made a suggestion that got him thinking: Making a complete car takes a huge amount of capital, she told him, and all your innovation is in the powertrain, not the rest of the car. Why not just make powertrains?
Powertrains, Wright mused. It’s not likely that car manufacturers could be convinced to use a powertrain from some startup, and car owners rarely replace a powertrain, even if the replacement would save money in fuel and maintenance. But truck owners do. Trucks, he thought, can last 20 or 30 years, and go through several powertrain replacements. He started investigating the truck business, and found out one more encouraging thing — trucks sold to fleets are practically custom designed, with certain engines or other parts designated. If he could get fleet owners interested in his powertrain, he might be able to sell it into trucks coming off the line in addition to marketing it as a replacement item.
And that was the pivot. Wright turned away from his idea of building a sexy super-sportscar to the not-so-glamorous business of trucks. That approach attracted nearly $17 million in investment. Wrightspeed now has 18 employees, mostly engineers, in an office in San Jose and is looking to hire more. FedEx is the company’s lead customer. It’s building electric powertrains with range-extending generators that can run on diesel, gasoline, CNG, or other fuels, The company designed its own motors, gearboxes, inverters, cooling system, and LCD instrument panels, tying it all together with custom software. The only significant parts provided by outside suppliers are the electric generators and batteries. The systems reportedly sell for less than $100,000; exact numbers aren’t available.
Wrightspeed shipped its first order of two powertrain systems to FedEx late last year, and just got an order for another 25 this month; that might not sound like a lot, but it’s a huge vote of confidence from the owner of a major fleet of vehicles. Wrightspeed is also getting attention from people who operate garbage trucks. Garbage and recycling collection company the Ratto Group approached Wrightspeed about creating a powertrain suited to garbage trucks; Wrightspeed did so and Ratto has ordered 17 systems.
“The average garbage truck in the U.S. spends $55,000 a year on fuel, and up to $30,000 a year on maintenance, mostly brake replacements.” Wrightspeed’s electric motors will cut those fuel costs by more than half, and its regenerative braking technology will cut maintenance costs, also by more than half.
While the Ratto Group contacted the company by email, others are literally showing up on the doorstep. “We’ve had people from Russia knock on our door and say that want to buy stuff,” he says.
It looks like Wrightspeed will be able to make a solid business out of selling range-extended electric powertrains. But the company has another asset that might turn out to be a much bigger deal — a patent for “vehicle dynamics control in electric drive vehicles” received earlier this year, number 8718897. This technology stemmed from a problem that needed to be solved to make Wright’s initial sports car prototype safe to drive. If you weren’t an experienced race car driver, it was really hard to control — so hard that a friend of Wright’s wrapped it around a tree during a test drive.
In order to keep his other friends away from trees, Wright decided that the car would have to automatically control traction, torque, and a wide range of other vehicle dynamics. To make the car “safe to drive if you’re not Michael Schumacher,” he started by giving each wheel its own motor. That’s been done before, and people are looking at using the ability to control motors independently as part of antiskid and anti-lock braking systems. But Wright went a few steps further. He set up each motor to be continuously controlled individually by the vehicle control computer, operating at independent speeds. He added individual gearing systems at each wheel. And then he developed software that continually adjusts these individual speeds to keep the car hugging the road. He says his continually adjusting approach gives better traction control, anti-lock braking, and yaw stability control than current technology, which kicks in to adjust individual brakes or redirect engine torque to a particular wheel only when it detects a problem.
This patent will likely bring in cash through licenses to a variety of electric vehicle manufacturers. Eventually, he thinks, someone else will use the technology to create the fastest, highest performance, electric car of its generation. And maybe he’ll buy one with his profits from garbage trucks.
This story was corrected on October 15, 2014.