For a pair of entrepreneurs bent on manufacturing electric motorcycles,
Current Motor Company's co-founders, John Harding and Erik Kauppi, are pretty coy about their eco-commitment. Harding admits
that he would not consider himself a "strong environmentalist."
"I do my part and recycle and all that good stuff," says
Harding,
a native of England and former Ford employee. "However, I'm more interested in tackling oil dependency."
Birthed from the
A2 Mech Shop, the 2-year-old firm develops and manufactures electric scooters on Ann Arbor's west side. It employs 10 people and plans to ship hundreds of its scooters this year, promising to take barrel after barrel of oil (and pound after pound of carbon emissions) out of America's transportation system.
"I think we have better things to do with oil, like making plastics," says
Kauppi, a
native Michigander and serial entrepreneur. "We don't need to be burning up this resource."
Though they both worked as engineers for Ford, Kauppi and Harding didn't run into each at work. Harding, who hails from Wales, had moved to Ann Arbor to take a job with the Dearborn-based automaker when he was introduced to his future partner while helping a common friend build a household energy monitor. At the time, Harding was selling imported scooters but the business wasn't clicking. He learned that Kauppi had a background in electronics and entrepreneurship and pitched the idea of an electric scooter company. Current Motors was born.
The motorcycle enthusiasts are now selling the company's first scooters, which go for $5,499 to $7,499 each. The less expensive model reaches 50-mph with a range of 30 miles. The top-of-the-line scooter can hit speeds of 60-mph with a range of 70 miles. They run on a plug-in battery system strong enough to charge an iPod on the side, too.
The eventual electrification of the automobile seems like a foregone conclusion these days. At what point do you think we'll see a majority of new vehicles have some sort of electric or hybrid technology? What are the implications for how we travel? What comes next?
JOHN: Even though the electrification of the automobile is gaining momentum, there are still a lot of [gasoline powered] vehicles out there. I'd say we're still a decade or more away from the majority being hybrid or electric. However, the key to remember is that we can still have millions and millions of cleaner vehicles on the road before we reach the goal of a majority.
Current Motor Co. was the beneficiary of a microloan of about $50,000 from the First Step Fund to help push forward the commercialization of its product. The drought of financing and seed capital today is why programs like this are so popular now, but do you think this will be the case a few years from now when the economy rebounds?JOHN: The microloan programs will always have a place. If the economy rebounds and more substantial, early-stage funding becomes available then microloans will simply shift towards smaller, one-person start-ups.
There are some who say it would be better to lower taxes for businesses across the board than to use tax dollars on government programs that help grow small businesses. As entrepreneurs and the owners of a start-up, would you rather have the economic development programs or a lower tax rate (if you could only choose one)? Why?JOHN & ERIK: Keep the economic development programs. Lower taxes (business or personal) wouldn't have made any difference to us at this stage, while the microloan and other state assistance through
Ann Arbor SPARK have been a key part of enabling us to grow to the point where we are creating new jobs.
Erik, you say in your bio on Current Motors Co.'s website: "we can change the world in a big way, a bit at a time, without billions of dollars, massive government programs." A lot of people talk about changing southeast Michigan's economy, reinventing it so it becomes more diversified and economically sustainable. How do you square your philosophy with the state's need to evolve its economy?ERIK: The change is already happening. There are lots of creative, small companies starting and growing in Michigan – battery companies, vehicle companies, alternative energy companies, and more. They are driven by market needs and new thinking. It would be great if they could get some help. A little help for 100 of these companies would bring a huge benefit to Michigan's future at very low cost. Small companies can use these resources very efficiently to turn them into jobs.
If you could require every entrepreneur in Michigan to read one book, which would you choose and why?JOHN: I'd say rather than reading a book you should attend training courses. Not only do you get to learn stuff but you get to network. On the book front, I like "
Crossing the Chasm" by Geoffrey A. Moore.
Environmentalism in the U.S. has had its peaks and valleys over the last century, ranging from Teddy Roosevelt's creation of the National Park System to the it's-OK-for-everyone-to-drive-an-SUV mentality of the 1990s. Some have said this latest push for sustainability is just another fad that won't last. Do you believe this, and if not why?JOHN: Follow the money. For the mainstream it's more about pocketbooks than environmentalism. The environmentalists are important. They're the early adopters that make things happen. However, the mainstream isn't environmentally concerned. The SUV craze was fueled by cheap gas and creative financing for those overpriced trucks-with-comfy-seats. If we give people a viable alternative that costs less to own and does the job they need it to do then EVs [electric vehicles] won't be a fad. When gas goes back up (which economics 101 tells us that it must) then EV usage will explode. Before we reach that inflection point (I tend to think $4 per gallon) the current trend to push for sustainability and low impact alternative energy helps keep the EV momentum building.
ERIK: The economic argument is certainly important – the time will come; in fact it's here for some users – when electric vehicles make more economic sense than gas. But there is also growing awareness of environmental issues. That's a trend for most of the last century. It may slow down sometimes and speed up sometimes but it's not going away. Opinions are really reaching a tipping point – volatile gas prices, climate change, hurricane Katrina, the oil spill disaster in the gulf. Folks are beginning to see that these are all much more connected than we used to imagine. That awareness will only continue to grow.
You are members of A2's Mech Shop, a tech-oriented coop/incubator. How has this helped your business develop and what role do you see for places like this in developing Metro Detroit's start-up culture? How does a community get one started?The A2 Mech Shop was a huge help in getting Current Motor Co. started. It gave us a low-cost place to start the business and build our first prototypes. We only moved our manufacturing operations out because we needed much more space. We still do R&D and electronics work at A2 Mech Shop. It is great because there are all these really bright people hanging around, looking at each others' stuff and sharing ideas. It's fun, and it leads to better products and finding better resources. Cheap space is really only a small part of the equation.
A2 Mech Shop started because a couple of entrepreneurs needed some shop space. We wanted to build a tech community and support start-ups, but that was not our primary goal. It was a solution to a problem that Bob and Dale and Peter and I felt every day, not a solution built in a vacuum and then searching for someone to help. Now it's working really well. We have a bunch of great companies and individuals at the shop. I just wish we had more space.
The key to starting something like this is to have a couple of people who really feel the need for the facility and have a vision of what it should be. Build what you need, not what you imagine somebody else needs. Probably there are others like you, and the word will spread. Of course it helps to have some broader vision, and to have an ambassador who will tell the world what a cool thing you are doing. The awesome Bob Stack does this for A2 Mech Shop.
Jon Zemke is the news editor for Concentrate and Metromode. He conducted this condensed interview over email and a couple of
phone conversations. His previous article was The
Young & Entrepreneurial: David Merritt.
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All photos by Doug Coombe
Photos:
L to R - John Harding and Erik Kauppi at the Current Motor Company assembly line.
The battery pack to a Current Motor Company motorcycle.
L to R - John Harding and Erik Kauppi with one of Current Motor Company's motorcycles.
The electric motor for a Current Motor Company motorcycle.
A finished motor and wheel assembly for a Current Motor Company motorcycle.
L to R - Erik Kauppi and John Harding riding motorcycles past the cornfields behind their plant.