The Next Great American Car Will Be Printed By Jay Rogers
The CEO of Local Motors talks about second-guessing Henry Ford and what he learned in the Marines.
When Jay Rogers set out to launch Local Motors in 2007—turning heads with the ripsnorting, desert-scorching Rally Fighter—people thought he had lost his head. A car company? Really? But Rogers had a few things going for him: degrees from Princeton and Harvard Business School, a grandfather who ran Texas Industries (successfully) and owned the Indian Motorcycle Company as well as six years’ worth of experience as a company commander in the Marine Corps.
“When you’re in Iraq, on deployment every day, and you know you could get killed from roadside bombs, insurgent attack, many different things, you get really in touch with the idea of what you want to do with your life,” he says of his audacity. “For me, I loved cars. I like a challenge. This is it.”
That warrior savvy eventually led him to second guess Henry Ford and the way cars are manufactured. Under Rogers’ direction, Local Motors has harnessed the wisdom of the crowd to test ideas and refine designs, embraced local manufacturing to manage costs, and adopted the DIY movement to convince people to come to its factories and build their own cars, slyly (and safely) cutting through the road-test regulations that limit its Detroit rivals.
“If you make your own car, you don’t have to ask someone’s permission to drive it on the highway,” says Rogers.
In short, he created a new blueprint for rapid innovation. On a recent afternoon, Rogers shared his thoughts on the topic with MAXIM.
What compelled you to take a break between Princeton and Harvard to join the Marines?
You have to see it in the broader context of my life. My granddad was a big influence. He and I are very much alike. He could make things. He took on ambitious projects. I wanted to make cars so I went to Princeton to be an engineer. As I got into my sophomore year, I realized this was not the 1950s. If you wanted to design cars, you were going to do door handles in the basement of Ford. There wasn’t a lot of big thinking going on.
I changed majors, finished with a degree in international affairs and a minor in art history. I moved to China, ended up working for a diabetic medical device company. When that got sold, I didn’t know what I was going to do. Most of my friends had been to business school or they were on their way to becoming doctors. I said, maybe I need to learn about how to make money. I got my CFA, and worked for a bank buying company in Dallas. It wasn’t me.
My boss said, ‘Why don’t you go to business school? If you apply, I’ll pay for it.’ I applied to Stanford and got in. I went to Admins Day and sat down next to a young man named Creighton. This was 1999. I said, “What do you do?” He said, ‘I was in the Marine Corps. It was the greatest thing I ever did.’ He said, ‘What do you do?’ And I explained everything. He said, “Why do you want to go to business school? You should go build that car company you wanted to build. You don’t need to go to business school; you have all this great business experience. Why don’t you just join the Marines and get some real leadership experience?’ Three months later I gave up my admission to Stanford and joined the Marine Corps. It was that simple.
You served in Iraq, Japan and Korea. What did that experience teach you that helped you as an entrepreneur?
The Marine Corps is nothing if not a planning organization. They plan for the first shot of war to make everything go to hell. I never expected that. I thought it was going to be guts and glory. They’re also a de-centralist organization: They give a lot of power to their squad leaders, corporals, platoon commanders.
I learned so many things, but chief among them would be how to plan in uncertainty. How to get the best information you can, create a plan, break the plan, rework the plan. Coordinate instructions so that when the shit hits the fan, you can still achieve your intent. I’ve got the guts now to know that I can do anything I want to do if I put my mind to it.
What made you think it would be fun to come home and start a car company? Your grandfather lost every penny he had in Indian Motorcycle Company.
I like a challenge. My grandfather was my idol and he couldn’t do it. That was part of it. I was also reading a book called ‘Winning the Oil Endgame‘ by Rocky Mountain Institute scientist Amory B. Lovins. If the Internet existed when Henry Ford was around, he wrote, if we had FedEx and all these low-cost tools, we would make cars very differently. I was super inspired by that. If you had no money, he was saying, but you thought about a vehicle company from the ground up, you could probably compete with the biggest companies in the world. I was like, “Sounds good to me.”
Many others have tried to start car companies and failed. What did you do differently?
We believe that harnessing many minds works better than assembling a team of hired guns. So crowdsourcing is big for us. Crowdsourcing mixed with this idea of low-volume manufacturing. We want to bring speed to market. If you look at the Mustang that won the air war over Europe, it was developed in 16 weeks. We had no IT patents associated with it because we knew the moment the first plane got shot down the enemy would know what was in it. So we just had to make more planes and get more bombs on target. For me, that’s what Local Motors is about—a desperate struggle to change the pace of technology. If the enemy is out there taking three to five years to perfect an international patent, let’s just throw patents away.
You’ve also come up with a novel way to sidestep delays involving federal safety standards by having customers build their own cars. How does that affect the final product?
I don’t want people to think we don’t make safe vehicles. I believe that engaging people with great ideas could make things even safer. You don’t learn until you test and you don’t learn until you drive and you don’t learn until you do. The point is to find a way to do that. If I make my own car, I can register it for the road in the United States. That’s the law. But we are pursuing more highly-integrated testing profiles.
And, to be fair, you mostly manufacture the body and the chassis. The parts that need to meet safety standards are often purchased from well-known auto manufacturers.
Exactly right. We did not set out to re-invent the mousetrap. That’s one of those things some people misunderstand about Local Motors. We’re taking it one bite at a time. We hope to eventually take on all parts of the car and make them better.
What is the advantage of using a micro factory?
A lot of people think it’s cheaper. It’s not. In many ways, it costs the same as it does to build a mega factory. In fact, it may be even more expensive because you’re replicating certain things you could do in one big factory. The difference—and this is the Trojan horse—is that you can optimize a micro factory to make it profitable to manufacture products in low volumes.
You haven’t toppled Ford, but you have helped the military and GE with rapid innovation. How does that work?
That’s correct. I had a meeting with GE CEO Jeff Immelt and he said, ‘You guys make really complex stuff via crowdsourcing. Do you think we can apply that same idea to a big company like GE, where it’s expensive to decide what to make?’ I was like, ‘Let me try.’ We built a micro factory in Lexington and a community of engineers and designers called FirstBuild. It looks just like Local Motors, but it’s focused on appliances. We just came out with a sous vide cooker. We launched it on Indiegogo. It’s the first challenge to my knowledge that a major corporation has used crowd funding to execute. We received 400% of our goal in two days. In two days, we proved you can bring manufacturing back to the local level. It doesn’t have to be in America. You can bring it to China, too. What we’re doing in vehicles is now being replicated in appliances and I don’t think it’s going to stop there.
Nice. So what words of wisdom can you share with would-be entrepreneurs?
If everybody tells you it’s a good idea, you should run in the other direction, because somebody’s probably done it already. When people tell you you’re crazy, there are two possibilities: You’re either crazy or your idea is just hard enough, just different enough, that people haven’t thought of it yet. That’s the perfect thing to go after.