Propelling the progress of society as a whole through the innovation of things. Some might say that the chance to leave the world with a product that fulfills such a dream is the true thrill of making anything.
Many of the images we once pictured being in our 21st century future, like consumer robotics and computer networks, are now a reality. But what about that great facilitator of our hyper-mobile society in the 20th century, urban transportation?
However often it is said that cities are the center of change, it is nearly impossible for the speed of the innovation of things to keep up with the speed at which the city itself is changing. As a result, cities around the world still face a mountain of traffic related problems, including environmental pollution, that remain unresolved.
GAIUS AUTOMOTIVE is a Taiwan-based startup that in addition to developing its Rapid-e 2.5 Wheel electric vehicle (EV) with a lightweight carbon resin frame, is establishing an EV car sharing system in an effort to build sustainable urban environments with green technology.
What are the major hurdles awaiting a startup entering a legacy industry like the automotive industry? And what can be done to surmount those hurdles? We discussed these issues in an interview with GAIUS CEO Anthony Wei.
Reasons for entering the urban transportation market
—— To begin, please tell us about how you came to found GAIUS, and what made you want to get into the scooter manufacturing and car sharing businesses.
Anthony Wei(hereinafter, “Wei”)：: I was actually born in the U.S. but about 10 years ago, I was given an opportunity to move to Taiwan. When I got to Taiwan, one thing that really surprised me was the massive number of scooters and motorbikes on the roads. Naturally, the air was polluted, and everyone was riding with masks on during their commute. As an urban environment, it was unpleasant, it was loud, and all these little scooters were burning up and emitting fuel. I wanted to confront this problem, and started to think about what would happen if we could electrify the way people get around. The more I thought about it, the clearer it became that I could turn the idea into an excellent business.
I then began to look into the Taiwan motorcycle market. I was astonished at the scale of the market. About 1.2 million motorbikes were being manufactured every year. It seemed like an enormous market. I thought that if I were willing to produce my own electric motorcycle and design it, there must also be someone out there willing to make it for me.
—— Did you sense that it would be very difficult to break into the market in a mature industry like urban transportation as a startup?
Wei: Like you said, the automotive industry has been around for about 100 years, and the current business model for auto manufacturing has been entrenched for about 50 years. But as a startup we are able to do things that they are not currently doing, and to explore market needs that are not being addressed.
Therefore, the goals that we have set are first, to bring personal modes of transport to wider society, and second, to create sustainable environments through zero-emissions ecological transportation.
Urban areas, in particular the majority of the world’s megacities, are facing major problems with traffic and pollution. As I said before, we devised an electric vehicle as a solution for these areas, but we also created a new 3-wheel vehicle segment that lies somewhere between scooters and trucks.
This product we refer to as “2.5 Wheel” looks like a normal motorcycle at first glance, but it has three to four times the storage capacity, while still being able to make tight turns since it is much smaller than a truck. This was the means that we came up with for entering into the urban transportation market.
User expansion on a global scale
—— GAIUS is in the midst of expanding its user base all over the world. Please tell us about what your aims are concerning your movement, as you say, “from Taiwan to the world.”
Wei: When I thought about transportation innovation, Taiwan struck me as an excellent location for taking a first step. It is not only a place with remarkable economic growth, most importantly, it has a huge scooter industry. I thought that Taiwan might be the only country where GAIUS could achieve the goals I just mentioned.
Japan is extremely well served with transportation infrastructure like trains and subways, but the situation in Taiwan is quite different. There is high demand for time-saving, convenient, and affordable motorcycles––I think it is a special part of Taiwanese culture.
—— What sequence of events led to your foray into the Japanese and European markets?
Wei: We participated in an auto show in Taipei, where we met with clients, and became aware that Europe and Japan are very attractive markets. The narrower the streets, and the smaller and older a city is, the greater its traffic problems are. One the other hand, in a place like Los Angeles, there are freeways, the vehicles are large, and the roads are straight. There is not much demand for our products there. But urban areas in countries like Japan, especially big cities like Tokyo and Osaka, are ideal cities for our products.
These cities will also be impacted by COP21 (the 2015 United Nations Climate Change Conference). After the conference was held in Paris, many countries agreed to implement carbon taxes, emissions trading, and other policies, but these decisions are bound to do great damage to the profits of companies like distribution companies that will be forced to pay these heavy carbon taxes. We want to provide new solutions in line with those new government requirements by expanding our zero-emissions products.
Personnel and funding hurdles
—— Can you talk about how the GAIUS team is organized? How did the founding members come together?
Wei: The core members of our team met back in college. We have known each other for 20 or 30 years, and have managed to do a lot together since our younger days.
Our development and production teams are also a close-knit group, and all production is handled in-house, but we are looking to consult with suitable external partners. We are at the trial production stage right now, with a goal of producing 10,000 vehicles annually by 2018.
—— Are you concerned that you might not have sufficient manpower or other resources to meet your mass production goals?
Wei: My own personal challenge is that I play many roles, sometimes acting as CEO, sometimes as marketer, and also conducting external negotiations, so I am always chasing time.
As a company, of course it is essential to retain good talent. We already have four great groups and an excellent young engineering team, but Taiwan still has deep rooted faith in large enterprises, so we do face a recruiting challenge.
As a short-term solution to our personnel difficulties, we have secured funding and support from the French government and set up a new office in Paris, but we are still at a stage that we are staffing here in Taiwan.
—— Current trends certainly seem favorable to the spread of your products, but are there any particular challenges you are facing on the business side of things?
Wei: We are moving ahead very well with our small team, and we are very proud of creating our functional trials, but when you set your goal to produce 10,000 vehicles, a considerable amount of hurdles spring up due to newly established requirements including factory and ISO systems. Jumping over those hurdles one at a time is the major challenge we are currently facing.
Another major issue is that we need to raise capital to get over those hurdles. We are setting up opportunities to discuss venture capital and corporate venture capital investment, and we need to find angel investors willing to support our startup. And I have to spare a lot of my time to accomplish those things.
—— Specifically, what sort of solutions are you looking at?
Wei: Our current strategy is to first create 50 products, and attempt to persuade investors by demonstrating a willingness to purchase quantitatively by testing virtual customer orders. Further, we are considering getting investments from technology suppliers through joint development of automobile technology. In the auto industry, for example, it is like how Toyota invests in Daihatsu and Yamaha.
Challenges going forward
—— You are currently gearing up for the mass production stage of the 2.5 Wheel, but you are also engaged in several other projects including a car-sharing project. What kind of goals have you set for those projects, and how are you managing those processes?
Wei: Time and resources are divided up for each one of our projects, and we are tackling each within a short-term, mid-term, and long-term time frame. Our current short-term goal is to finalize the framework for the 2.5 Wheel in-house, and produce 40 vehicles daily. To do that requires quite a lot of personnel, so securing talent is our number one challenge. I believe that once we solve this issue, we will be able to deliver our product to customers very quickly.
Our mid-term objective is to successfully set up a car sharing business in Taipei. Once a structure is place to use as a model, we will be able to copy and paste that model onto other cities in various countries, so first we have to make sure we create a successful model in Taipei.
The long-term objective is to develop a self-driving vehicle. Presently, we are already working in coordination with Oxford University on 3D scanner development. In the future, self-driving taxis may also play a role in solving the issue of urban transportation for an aging population.
—— Isn’t it difficult taking on all of these projects at the same time?
Wei: We currently have three types of businesses that we are tackling simultaneously in parallel. However, I think it would be a good idea if in the future these were divided into three different independent businesses. But we do not have a plan in place for everything we are going to do at every step. We will examine our opportunities in the moment, choose one, and try it out.
By doing that, we can ensure we have multiple exit strategies, and as each business prepares for an IPO, it can keep expanding its business with the urgency of a startup.
—— To succeed in a huge venture like building sustainable urban transportation, it is very important to persevere without scaling down your corporate strategy. Thank you very much for speaking with me today.
Unless a startup has a corporate strategy with both flexibility and a sense of speed, it will never paint the great future it imagines. At the same time, securing the resources to achieve such a thing can be a long and arduous struggle.
Though GAIUS possesses both superior technological prowess and a clear vision, they cannot escape the struggles a startup is destined to encounter. Their CEO Anthony Wei, however, never ceases coming up with ideas for overcoming such challenges.
GAIUS’s projects––EV development, car sharing, self-driving vehicles––straddle a number of fields, and it was the feeling of the BRAIN PORTAL editorial department that these were all winnable battles for them because the company is loaded with a thought engine capable of continuously working at full capacity.
A startup with the ability to think is about to turn a fresh page in urban transportation. And their exciting story is making its way to a global stage as we speak.