About two weeks ago, Daryl Oster and five people from his company ET3 made the trip to 1 Rocket Road in Hawthorne, California, the headquarters of SpaceX. Its CEO and Chief Designer Elon Musk had invited the engineer and former stockbroker over for a chat. Musk was interested in Oster's idea for an Evacuated Tube Transport (ETT) system that he said would let people travel from New York to L.A. in 45 minutes.
Oster lives in Longmont, Colorado (population 85,000) but he says he had business in Las Vegas and a meeting in L.A. with "another licensee." (More on that in a bit.) "So we made a road trip out of it," he says. He arrived at SpaceX at about 1:30 p.m., and for three and a half hours, he talked with Musk, one of SpaceX's engineers, and three people from Tesla Motors, Musk's other company, who had teleconferenced in, Oster says.
Oster's design, powered by his ETT system, is called the ET3. Capsules weighing about 400 pounds would could carry up to six people at speeds (in the initial design) of 370 mph. But the capsules could eventually get up to 4,000 mph (that's Mach 5) in straight, unpopulated areas. That's faster than any known aircraft (hence the ET3's trademarked tagline "Space Travel On Earth"). The capsules would ride on a cushion of air and be propelled by a system of coordinated acceleration devices. Oster won his first patent for ETT in 1999. His associates and licensees have won several related patents for his ET3 system since. The most recent in 2007 was for a vehicle control system. Many press outlets have featured ET3 over the years, but most have been skeptical if not dismissive. In April 2012, design site Core77 featured pictures, a video, and a writeup of ET3, saying it made "outright incredible claims."
Fast forward to this week. On Monday, Musk released an "alpha" design document of his own. It outlined what he called the Hyperloop, an idea he'd first mentioned at a PandoDaily "fireside chat" in Santa Monica in July 2012. Hyperloop would transport several people in a capsule through a metal tube on skis that glided across a cushion of air, much like ET3. They'd whisk from San Francisco to L.A. in 30 minutes—at speeds of up to 760 mph. It would maintain speed with a series of acceleration devices, like ET3. And it would all run on solar and other reusable power, generating more than it actually used. The whole thing would cost a fraction of the price of a proposed high-speed rail system along the same corridor.
Businessweek, which had featured Elon Musk on its July 18 cover with the headline "Why Everybody Loves Tesla," got an interview with Musk in advance of his Hyperloop announcement in which he shared new details. The renderings of the system looked a lot like ET3—Musk even mentioned the older system in the document he released, without elaborating extensively. In her writing about "Musk's vision," Businessweek's Ashlee Vance wrote that Hyperloop "immediately poses a challenge to the status quo." The Wall Street Journal said Musk is "often called Silicon Valley's real-life version of superhero inventor Tony Stark." Core77 wrote, "It is staggering how much of this he has thought through." ABCNews ran a story under the headline: "Hyperloop Designed for a Quick, Convenient Commute Like No Other."
But in fact, plenty of people had already speculated that Hyperloop was similar to ET3. In one of the oldest on September 8, 2012, two months after Musk appeared on Kevin Rose's Foundation show and talked about Hyperloop, a writer identified as Daniel Chmielewski wrote a blog post asking, "Is Elon Musk's Hyperloop the ET3?" Asked this week in Businessweek whether he had looked at the ET3 concept or an even older, less similar vacuum train concept, Musk said, "I wasn't familiar with either of those before, but I have learned about them now."
Oster isn't bothered by the similarity between the Hyperloop and the idea he patented years earlier. Quite the contrary. "We're really thankful that he's brought this to people's attention," he says. Oster actually licenses his ETT design under what he calls an open consortium model. Anyone can buy a license from him—it's like a software license.
So is Musk's Hyperloop a licensed version of Oster's design? Oster won't say directly. Licensees "are in direct control of the release of their information on their projects. We leave all that to the licensee," Oster says when pressed.
Doesn't that imply Musk is a licensee?
"Like I said, the licensees that want their info to be public are in control of the release," Oster says. He would neither confirm nor deny whether Musk or his designees licensed ET3's design. But later, in describing his visit with Musk at SpaceX, Oster mentions combining the trip with a visit to "another licensee." A little slip of the tongue?
SpaceX has not responded to questions sent via email on Tuesday to a media address about when or if Musk licensed ET3's design. A representative for Musk's other company, Tesla Motors, has not responded to questions sent via email on Tuesday evening, either.
Even if he did license Oster's ETT idea as the basis for the Hyperloop, Musk didn't do anything wrong.
He's precisely the kind of messenger that could make the idea take off, whether it's fundamentally his or not.
"There are two things going on here," says Jonah Berger, a Wharton professor and author of the New York Times bestselling book Contagious: Why Things Catch On. "The first has a lot to do not with just what's being said, but who's saying it. If [Elon Musk] says 'I'm going to build a high speed train from San Francisco to L.A., people are willing to listen not only because he's an entrepreneur but because he's disrupted a number of transportation related industries. Second, this is not an incremental change or innovation. It's a remarkable extremely large innovation."
"He's the right person to get attention of this idea right now, whether or not the idea will survive," Berger says.
If anything, the story drives home the importance of a narrative in the innovation equation. Musk knows how to tell a tale: about a beautifully designed car that needs no gas and asks you give up nothing in the way of luxury or power; about a fantastic space ship that not only lifts off but lands; about a people mover that is cheap, incredibly fast, produces more energy than it uses, and looks like something out of The Jetsons. And the world at large, and Silicon Valley VCs in particular, love a narrative.
Narrative is how Spotify garners tens of millions in venture capital and a $3 billion valuation—not by positioning itself as a streaming music service but a movement to make music free. It's how entrepreneurs like Leah Busque transformed her little idea for a business that would connect neighbors into TaskRabbit, a solution for employing the middle class. Facebook's not an ad platform; it's a tool for making the world a more "open and connected" place.
Plus, as New York magazine writer Kevin Roose put it, Musk is making a political statement by positing Hyperloop as a cheaper, smarter, private business-lead alternative to the California High-Speed Rail Authority's plan to build a 520-mile high speed train network linking San Francisco and Los Angeles. "I'm also very impressed that he's had the courage to make a politically charged comment that there is a boondoggle," Oster says of Musk. Part of his narrative involves playing the role of a "Libertarian Lite" agitator, as Roose writes, part of a Silicon Valley cabal tackling seemingly unsolvable problems with technology and innovation. Who is Elon Musk, if not John Galt?
Oster might have pioneered the future of travel, but without someone like Musk to champion it, it's just a big idea in a vacuum.
Oster's design and Musk's Hyperloop aren't precisely the same. Ironically, Oster's idea is more ambitious. He wants to connect the whole world via ETT, not just L.A. and San Francisco. He says five dozen people in five countries have licensed ETT for their own versions of the system. A dozen are in China, Oster says.
"Our vision and our mission is global transportation taking place with one optimally designed diameter evacuated tube system that can move people and cargo," he says. If Musk has a similar vision, "that's very helpful, because it's bringing awareness to what our consortium has been focused on for many, many years."
A day after Musk announced details of Hyperloop, Oster says he has 2,267 unanswered emails in his Priority Inbox. "Our growth has occurred invisibly," he says, "but now it's emerging."
It would be interesting to know whether Musk stumbled upon his Hyperloop idea after arriving at his own concept independently or whether he saw ET3 years ago, iterated on the idea, then sought to do right by Oster and avoid a dispute by licensing the similar design. What's baffling is why Musk would say he only recently learned about ET3. However the Hyperloop idea materialized, though, Musk clearly thought it was important to have Oster in for a visit a couple of weeks ago, if Oster's story is accurate.
Buying the license wouldn't have been a tough negotiation for Musk, either. Oster requires licensees to pay a one time-fee, and then a 6% royalty, but only if they use his design to make money. Until the Hyperloop was built, running, and charging people its $20 tickets, all Musk would need to do to start working would be to make the one-time payment for the license itself.
How much does it cost to license ETT? $100.