Login or signup
36

This Is Rocket Science
 

Paul Moller may have been working on his flying car for nearly four decades, but he's no crackpot. His saga is a road map of how to keep a dream moving ahead when the world seems to offer nothing but head winds. And he just might pull it off.
Advertisement

Paul Moller may have been working on his flying car for nearly four decades. But he's no crackpot. Meet Skycar

Inside a small, squat building in the interior farmland of northern California, a machine that can only be described as a one-man flying saucer sits next to a spacious workshop. It's not the most interesting vehicle in the building. That honor has to go to the gleaming red machine in the corner, the one that looks like a race car circa 2025, all wicked curves and multiple jetlike engines. It's a Skycar -- a "roadable aircraft," or a flying car, if you will -- that is capable in theory of lifting straight up past rooftops and then zooming off over hill, dale, and traffic jams.

Paul Moller believes he's going to put one just like it in your driveway.

It seems like a batty notion, but it's one to which Moller has unwaveringly clung throughout a nearly four-decade odyssey that has left him and his company, Moller International, in Davis, Calif., constantly on the brink of crashing and burning.

Moller, of course, is hardly the only entrepreneur to throw himself into a long-shot, long-haul venture that holds out the promise of great reward. But few have pursued as grand a vision against such daunting odds and with as much resiliency. The saga of Moller International is virtually a road map -- or, rather, an aeronautical chart -- of how to keep moving ahead with a dream when the world seems to offer nothing but wind shear. "I always believed I'd succeed if I could just survive," says Moller. "It's always been about surviving."

He just may pull it off.

Child prodigies are usually associated with mathematics or music. Moller, who grew up on a farm in rural Canada, was gifted in mechanical engineering. At age 11 he designed and built a working four-person Ferris wheel. Four years later, after an inspirational encounter with a hummingbird, he built a primitive and partially functioning helicopter.

Not interested in attending college, Moller attended an aircraft-maintenance trade school. But he never got over the thrill of building a machine that could hover, and he pored through engineering textbooks on his own and took a few night classes.

In 1960, when he was 23, he randomly dropped in on Barry Newman, an aeronautics professor at Montreal's McGill University, asking for advice on how he could take some college classes. Newman was so impressed that he pulled strings to get Moller into a graduate program there, despite Moller's lack of a college degree. Upon obtaining his Ph.D. in mechanical engineering, a mere three years later, Moller got a job at the University of California at Davis, and it wasn't long before he had created the school's first aeronautics curriculum.

But a question kept nagging at him. Why weren't we all getting around the way the Jetsons did? In a world that was beginning to experience heady revolutions in computers, medicine, and even space travel, Americans were spending hours a day in machines that were essentially a 19th-century technology, stuck in traffic under wide-open skies. It was as if every element of science fiction were coming to life, except for the most ubiquitous -- flying cars. "You can't describe a future without a major evolution in personal transportation," says Moller.

Was there a way to combine the straight-up flight of a helicopter with the greater simplicity, speed, and lower cost of ownership of a light plane? The key, Moller decided, was the engine -- usually the weak link in aircraft when it came to cost, performance, and reliability issues. What if an aircraft could be driven by smaller, simpler engines that each turned a small fan-blade-like rotor underneath the vehicle?

In 1965, Moller built and flew a two-engine hovering platform he called the XM-2. The underpowered contraption struggled to make it inches off the ground and tended to wildly pitch to one side or the other with any imbalance in the two engines' thrusts. But it was a start.

By 1967, Moller was itching to spend all his time designing and developing a precursor to a mass-marketable flying vehicle that could challenge the dominance of the automobile. At that time he estimated it would take 10 years if he could get the right power plant. All that stood in his way were a complete absence of funding, enormous technical and regulatory hurdles, and a long history of flying-car failures. (See "It's a Bird, It's a Plane, It's ... History," below.) On the plus side, an easy-to-own-and-fly family aircraft could create one of the largest new markets in history.

Moller knew little would happen without investors. So he started talking up the idea to everyone of means he ran into. Soon the 30-year-old fell in with an eccentric but enthusiastic promoter who agreed to pay $15,000 up front and $85,000 in the coming year in exchange for 7% of Moller's about-to-be-founded enterprise. Moller scaled back his university job in 1968, set up a workshop in a garage, and started ordering parts. About three months later, with his $15,000 depleted and his debt rising, Moller was stunned to learn that his lone investor's business had collapsed.

Moller had to scare up money, and fast. It would become a theme for the next 32 years.

He quickly confirmed the obvious, which was that traditional sources of financing were not eager to throw money at a garage start-up with an unproven technology, market, and founder. Instead, he would have to play the passion card -- that is, find well-heeled people who would be sufficiently revved up by the force of his creativity, ambition, and vision to fork over significant sums of money without any conventional form of assurance that they'd ever see a penny of it again.

He struck gold later that year with Jim Fitzgerald, then the major owner of a private hospital near San Francisco. Fitzgerald not only was willing to put in some of his own money but talked Moller up to some doctors who always seemed to be looking for interesting investments to round out their portfolios -- or at least to generate tax deductions. The group put up $25,000 to start. In the coming years they would put in more than $500,000. The bankrupt original backer helped bring in money, too, by introducing Moller to prospective investors. And former mentor Newman was good for $2,000.

Those investments and others like them were sustaining in more than a financial sense. "If I ever had dark times and thought about how easy it would have been for me to walk away from the project," says Moller, "just remembering how people like that had put their trust in me kept me going."

By the end of 1968, Moller had built and tested the XM-3, a more stable version of the XM-2, though it too was incapable of controlled flight. As work on his prototypes intensified, he was bolstered by help from a few employees and a parade of graduate students who had jumped at the chance to work on cutting-edge aeronautics technology. At that point Moller found himself wondering if there wasn't an intermediate, far easier target he could pick off along the way with the tiny rotors he was developing. What besides vehicles might need a lightweight push from a blast of air? As an admittedly reckless skier, Moller had always felt that standing around waiting for a chairlift was as inefficient as forcing aircraft to use an airport. But if he could design a backpack containing a powered rotor...

It probably goes without saying that the backpack thrust unit wasn't destined to eliminate the ski-resort lift line. Of the many obstacles that arose, Moller wrestled most heavily with the requirement that peaceful mountain slopes not sound like Daytona when skiers were schussing uphill. So he developed his own muffler and tested it out on motorcycles, which were a passion of his. It soon occurred to him that the demand for motorcycle accessories far outstripped that for thrust-pack accessories. Eventually, the Supertrapp muffler, as he named it, would become one of the most popular aftermarket accessories ever made for motorcycles and would be a hit on the race-car circuit as well.

Supertrapp was a $5-million business and was still rapidly growing when he sold it, in 1988, to free up time and money for his Skycar work. "I loved creating a physical product that was made on an assembly line and that made money we couldn't have survived without," says Moller. "But it occupied a lot of my best people."

Was that successful venture a fluke? Apparently not. When Moller had started searching for a larger work space in the mid-1970s, he recognized that the Davis area lacked the sort of research-and-development industrial park that was starting to thrive around many other major university towns. So he spearheaded the development of one and made millions more when he later sold his interest in it.

For Moller those accomplishments were useful distractions. "Anything I did besides work on the flying car was to raise money for the car," he says. "Everything was for the car." To that end, the ancillary businesses were valuable not just for the cash but also for the credibility they gave Moller in the eyes of prospective investors. He might be a dreamer, but he was a dreamer who could make money.

Never quite enough money, though. Everything Moller could scrape together from investors and his side business ventures was instantly gobbled up by flying-car R&D to the tune of as much as $3 million a year. Like the resulting prototypes, Moller's finances were underpowered and lurchy. He owns the building he operates in, but he's lost and regained it twice, once frantically negotiating to keep it while lying in a hospital bed with a broken neck from a motorcycle-trail-riding accident. (He also races go-carts, and he plays racquetball daily.) "I thought they were going to chain the door that time," he recalls. Moller says that he's been involved in about nine lawsuits, everything from disputes over distributor contracts -- including one with a large investor and former board member of the company -- to liability for allegedly faulty muffler parts. Moller sued one company for refusing to pay royalties on an engine design that he says violated one of the 43 patents Moller International owns on its technologies. All suits were resolved in his favor, he claims.

One way or another, the work on the vehicles went on. By the early 1970s, Moller had turned his attention to a different type of engine, named a Wankel after its German inventor. Moller believed the engine's ability to churn out high horsepower in a light, cheap, low-maintenance package made it perfect for a flying car. In 1974 the Wankel-powered XM-4 embarked on its maiden flight of a few wobbly feet.

Moller realized there was little point in bringing out additional prototypes without first achieving quantum leaps in power and control. Doing so took him another 15 years -- 12 years past the 10-year mark he had once set for himself. "We never felt discouraged about the slow evolution of the car," he says. "The only thing that was disheartening was having to sometimes put the work on it aside to raise money."

Finally, in 1989, he smoothly piloted the eight-engine, flying-saucer-like M200X to a height of 50 feet alongside his building. In theory, 40 feet is as good as 10,000 from an aeronautical point of view. The M200X's one-man design wasn't a marketable one, but it proved the concept of a hover vehicle with multiple small engines. Moller flew the M200X more than 200 times in front of current and prospective investors and other potential boosters.


To fund the Skycar, Paul Moller developed a muffler that he marketed to motorcycle and race-car enthusiasts


By 1990, Moller was working on a new machine designated the M400. The lack of an X in the name was significant -- X is generally taken to mean "experimental" in new aircraft. From the beginning, the Skycar, as the M400 would later be jauntily named, was intended to be the real deal. It would be Moller's do-or-die project. "It was what I had been moving toward for most of my life," he says. "Making it work was everything to me. Just accepting the possibility of failure would have been the first step to failure."

The Skycar's outrageously sexy appearance is hard to reconcile with its creator. Moller doesn't look or act like someone who would build the stuff of male adolescent fantasies. There's something sturdy and utilitarian about his build and even his face, though the latter is softened by an extended Vandyke that gives him an incongruously thoughtful look. In fact, Moller shrugs off his supervehicle's hot looks as an incidental by-product of the physics of airflow. "If you design something well aerodynamically, it will probably look good, too," he explains.

Appearances aside, the Skycar is an undeniably innovative machine. It seats four in its bubbled cockpit, can be driven for short runs on its three small wheels (by virtue of which the M400 is categorized as a motorcycle by the Department of Transportation), and fits in a two-car garage. Moller claims that the Skycar will in a decade or so be quiet enough to take off from a suburban driveway without unduly stressing the neighbors, but in the shorter term he envisions that owners will drive it to a local "vertiport" for a launch.

Once the completed Skycar lifts straight up to a safe height, the machine will thrust forward to speeds of 300 miles per hour or more, under the control of 28 microprocessors running 27,000 lines of programming code that control devices such as those that readjust the flow of fuel to each of the eight engines every hundredth of a second to balance and steer the vehicle. The computers get their marching orders from the pilot by means of a pair of joysticks, but they won't wait for the pilot's slow reflexes to kick in before taking any necessary corrective action. "In a 300-mph vehicle, you're the weak link," says Moller.

Anyone who visits Moller International with the idea that the Skycar was born in a slick, futuristic working environment will be disappointed. The facilities look a lot like the branch offices of a struggling insurance company backed up against a large auto-body shop specializing in interplanetary vehicles. The main giveaway that some kind of advanced high-tech wizardry is happening there is the 21-inch computer-aided- design display terminals tucked away in one set of cubicles. But you'd also have to wonder about the shrapnel holes decorating one small room off the main workshop floor. (They were created by an experimental engine that almost ripped itself apart during a bench-test explosion.)

There are 25 employees at the company, and given the current shortage of skilled workers who are willing to work for down-to-earth salaries, Moller was happy to grab them any way he could. One electronics expert had dropped by to inquire about renting storage space when he was thrust into an interview and summarily hired; a mechanical engineer was recruited by another employee who happened to be standing around when the engineer was in a local U-Haul office returning a moving truck.

Moller has at times been way ahead of other U.S. businesses when it comes to finding innovative ways to compensate employees, though he claims that he usually ends up regretting it. In the early 1970s, for example, he issued phantom stock -- that is, he contracted to pay employees bonuses that corresponded to increases in the value of the company's stock. He ended up paying out hundreds of thousands of dollars to Supertrapp employees under the plan, he says, before the company was sold. In the late 1980s he started issuing employee stock options with no strings attached, but after a key worker quickly cashed out and started his own business, Moller instituted an eight-year vesting schedule.

Turnover has been a problem, Moller concedes. The main reason: fears about the company's financial health. He recently lost his general manager to a dot-com. "He's getting $3 million or $4 million in options there," says Moller, "and here he had to worry about his next paycheck." He means that literally -- several times over the years the company delayed issuing paychecks because the money simply wasn't in the bank.

Moving ahead to the Skycar project had only increased the pressure to raise money, because of the vehicle's added complexity and the need to make it a practical, certifiable aircraft. (Just building a one-twelfth scale model of the Skycar for dog-and-pony shows cost $20,000.) Before beginning work on the Skycar, Moller had tried to broaden his fund-raising efforts. "We've explored every option known to man," he says. He contacted most major automakers about buying into his company, but they told him point-blank they had no interest whatsoever in flying vehicles. He tried aircraft manufacturers, which for the most part insisted they had enough problems getting ordinary planes and helicopters right. He made his way through much of the Fortune 500 without encountering a glimmer of interest. The only investment bank willing to get involved was Robertson Stephens, which put together a $1.5-million private placement marketed to a handpicked list of its clients. Robertson even had Moller present at a technology conference it sponsored for investors. Not a single nibble. Moller looked into an initial public offering but couldn't find an interested high-quality underwriter.

He trolled for investors through a full-page ad in Business Week. It drew a number of candidates, including a significant one: Jack Allison, an air-force colonel turned real estate agent who was also an enthusiastic pilot. After meeting with Moller, Allison gathered together 21 pilots, colleagues, friends, and friends of friends to come up with $150,000 in 1986. Allison was such a gung-ho supporter of Moller's efforts that Moller later invited him to join the company. Allison's title is vice-president of administration, but he serves more as an investor-relations specialist, especially when it comes to selling fellow aviation fanatics on the company.

When the most recent tech boom hit, Moller expected to find backers among all the young corporate hotshots stuck in Silicon Valley traffic, who he thought would appreciate the electronic sophistication of the Skycar. "This thing should excite the hell out of the computer industry," says Moller. "It's a flying computer." He wrote letters to the CEOs of all the major Silicon Valley companies he thought might be interested in the electronics behind Skycar . No one responded.

Still, it's not as if Moller has been a complete dud when it comes to raising money. He has done better with foreign corporations, attracting an investment of $300,000 from South Korea's Samsung Techwin, as well as $700,000 from a Malaysian concern and $1 million from a Finnish company. A Middle Eastern company became an investor when an executive there heard about Moller through one of Moller's stockholders. Overall, a majority of the company's large investors are from overseas.

And then there's Moller's affinity for profitably spinning off technologies. "I always try to find an element of the grand scheme to capitalize on," he explains. He has scored government contracts for producing smaller and simpler hovering machines, for example, including an R2D2-like "aerobot" designed to inspect the undersides of bridges. And the latest incarnation of his Wankel engines seems to be taking off as a product in its own right. Moller claims to have received letters of intent for the purchase of a total of 500,000 engines worth $1 billion, for applications ranging from electric generators to fire-hose pumps to personal watercraft resembling Jet Skis. Meanwhile, with all that ancillary success, Moller has had to answer some hard questions from his third wife. "She doesn't understand how I can make so much money and still be broke," he says. "I'm like the farmer in the joke who is thrilled to inherit $6 million because now he can afford to farm for another 10 years."

To keep himself in the black, if barely and erratically, Moller has continued to turn back to many of the same individual investors who have supported him over the years. "I'm pretty good at hustling," he says. "When I get desperate, I come up with something that would appeal. You can't just keep leading them to the same trough." Every company milestone, from a new contract to a technical breakthrough, is leveraged into an effort to ignite investors' interest in buying more stock, as well to attract new backers. Last year, for example, Moller started up the Skycar Liftoff Association, whose stockholding members will receive options on more stock if and when the Skycar flies. The scheme brought $500,000 into the company.


The engine was the key, Moller knew, in combining straight-up flight with the speed and simplicity of a light plane.


There are now some 450 investors in Moller International, with individual investments averaging a little over $100,000. None of the investors have gotten rich on the company, but they could have done a lot worse; during the past 30 years, the price of a share of stock has increased by a factor of 50. Moller himself helps make a market in the stock by informally helping buyers and sellers hook up with one another. The company is currently in the process of registering as a public company -- not because it plans an IPO anytime soon, says Moller, but so that the company can borrow against its stock.

Prospects for the Skycar have received indirect boosts in recent years from surprising quarters. The Federal Aviation Administration tends to be tough on new aircraft when it comes to certification, and the Skycar might have been in for a particularly bumpy ride if it were forced to qualify as either an ordinary plane or a helicopter, since it combines features from both. But the agency recently created a new category for powered vehicles. the skycar is likely to be the second such vehicle after the v-22 but a certified skycar is more than two years away. the faa is also in the process of creating a new air-traffic-control system light aircraft that will in most cases remove one of the major hassles in the need to obtain traffic-control clearances. the new system will allow special transceivers aboard light planes to communicate with one automatically directing pilots away from traffic conflicts. I make a legitimate case for this vehicle without a major change in the airspace-control says moller.

NASA has been helping the cause as well. The agency has long been interested in increasing its role in civil aviation, and chief Daniel Goldin has in recent years publicly predicted a boom in private aircraft that will annually deliver 10,000 vehicles within 10 years and 20,000 within 20 years. Moller points to that prediction as a vindication of his insistence that the Skycar market is out there. "Without that market, I'm just a maverick trying to turn a hobby into more than it is," he says. "So many people are just pursuing their dreams, caught up in their wishful thinking, and that can be sad."

Now all he has to do is get the Skycar off the ground. The first big test will be a straight liftoff of 10 feet or so (a low-hover test) while the vehicle is tethered to the ground to avoid any control-related mishaps. The original target was April 1999, but that date has been pushed back several times. As of this writing, the test was set for late August. If it goes well, an untethered flight will be scheduled before the end of the year.

The fact that the Skycar hadn't so much as hopped two feet into the air didn't stop more than 100 people from plunking down $5,000 deposits for the first Skycars. One woman in Austria has deposits on 14 vehicles, essentially establishing herself as a European distributor. The initial price of the Skycar will be $950,000, though Moller says he can steadily work the price down with greater production levels, ultimately reaching $40,000 to $60,000 -- which may actually be affordable to many Americans on a lease basis, given the traditionally low depreciation on aircraft. Don't even think about it, though; Moller has stopped taking deposits. "I don't want a huge, impatient crowd of buyers waiting for the Skycar," he says. With luck, he says, he'll be able to produce 10 "preproduction" vehicles in 2001, though some or even all of them could go to military and paramilitary organizations that have expressed interest in the machine.

What will it take for Moller to get the car into production? Another $45 million, he says, plus about $500 million more to get to volume runs. That's a lot of money, he concedes, but he points out that 15 million new automobiles are sold each year, and if he could sell one-twentieth as many Skycars at $100,000 apiece, he'd be looking at a $75-billion market. "Ford spends $1 billion just to update a car line," he says.

Even if the Skycar does make it all the way into production, Moller's story won't be over. Just as he has built ancillary businesses to raise money for the Skycar, lately he's been regarding the Skycar itself as a means to a new end, he says. Just down the road from his building he's developing a 60-acre complex to house the world's largest combined alternative and traditional health-care facility. Spurred by the debilitating illnesses suffered by his two sisters, Moller has become increasingly dedicated to promoting various health supplements and treatments. He himself takes some 75 pills a day and unprompted likes to tick off his cholesterol level (HDL 80), his blood pressure (100/60), and even his testosterone readings. In fact, though he is 63, he looks 45. The Skycar is still consuming him, he says, but he spends more and more time thinking about the health complex, which he hopes to complete within five years. "This has become where I want to end up in life," he says.

After all, he points out, the Skycar has been a long haul. "Who would have thought that something that was supposed to take 10 years would take 30?" he asks. But even if the Skycar takes off on test flights this year, Moller won't be in the pilot's seat -- his investors won't let him. "Ten years ago that would have bothered me," he says, sitting in his office. "Now I'm not uncomfortable with the idea of not risking my neck."

He looks off into space when he says that. His gaze leads to a wall that's unadorned except for a framed photograph of a hummingbird.

David H. Freedman is a contributor to Inc.


Starting point: In 1965 Moller built and flew the XM-2, a two-engine hovering platform that struggled to make it inches off the ground and pitched to the side.

Phase two: By the end of 1968, Moller had built and tested the XM-3. It was more stable than its predecessor but was still incapable of controlled flight.

Liftoff: In 1989, Moller piloted the eight-engine flying-saucer-like M200X to a height of 50 feet, which proved the validity of his concept.


IT'S A BIRD, IT'S A PLANE, IT'S ... HISTORY

More than 75 patents for flying cars have been issued in the United States since 1917. None of the vehicles ever caught on, though, because most tended to be expensive and flimsy as cars and underperformers as aircraft. Enthusiasm for the concept peaked back when hordes of sky's-the-limit young veterans returned to a booming economy after World War II. But interest seems to be picking up again -- a 1998 World Aviation Conference, for instance, attracted papers from three developers working on "roadable airplanes." Here is a brief history of the flying car:

1917: Glenn Curtiss's tri-winged, aluminum-frame Autoplane debuted, sparking interest but going nowhere fast.

1926: Henry Ford rolled out a prototype for the "Ford flying flivver" but stopped work when a friend was killed testing it. Ford remained an outspoken proponent of flying cars but never again put his money where his mouth was.

1937: Studebaker funded inventor Waldo Waterman's idea of sticking a propeller on the back of one of the company's cars, along with wings and aviation instruments. After taking a look at the result, Studebaker said, "Never mind."

1946: Robert Fulton designed and built the Airphibian, the first "roadable" plane certified by the Civil Aeronautics Administration -- which also ordered 10 for its own reps. Eleven Airphibians would be built in the 1950s before Fulton's company ran out of money.

1956: Moulton Taylor rolled out the Aerocar, the only other roadworthy plane to win federal certification. The Aerocar became a minor television star, making appearances on I've Got a Secret and alongside actor Bob Cummings on his show Love That Bob after he bought one. Taylor fell 222 orders short of the 500 he needed to start mass production of the vehicle, and only five Aerocars were built.

That same year, Ford flirted with a later incarnation of the Aerocar, then backed out.


Please e-mail your comments to editors@inc.com.

Last updated: Jul 1, 2000

DAVID H. FREEDMAN: A Boston-based contributing editor, Freedman is the co-author of A Perfect Mess, which examines the useful role of disorder in daily life, business, and science.
@dhfreedman




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Comment and share features
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: