Editor’s note: WRALTechWire publishes today the second in a new series: In-depth interviews with Triangle entrepreneurs, each of which will include multiple parts. Our third package focuses on Rob Cotter, the former automotive industry executive who is setting out to reshape the transportation industry at Durham-based Organic Transit. One of his first customers: Commedian Jerry Seinfeld. WRALTechWire Insider columnist and entrepreneur Joe Procopio will be having candid conversations over a beer with our profile subjects throughout 2014. Also included with each package will be a Q&A that goes beyond standard business and video interviews with WRALTechWire Editor Rick Smith. The Q&A and video interviews are available online.
DURHAM, N.C. – Here’s the concept. I sit down with a startup founder and we drink one beer. During that beer, we have a normal non-journalism, non-marketing, authentic conversation. That’s all it is. When the beer is gone, we’re done.
- Site: Surf Club, Durham NC
- Cotter ordered: Great Divide IPA
- Procopio ordered: The same.
Rob Cotter: So I went to get acupuncture this week. I’ve been running on adrenaline for a while. And the acupuncturist tells me that people on adrenaline run pretty hot and after I’m done treating you, you’re going to cool down, so be careful out in the weather. Three days later, I’m sick. Thank you, acupuncturist.
Joe Procopio: Sorry, man. That sucks. The last time you and I sat down together, like a year ago, we ended up talking for a couple of hours. You’ve got more interesting stories than I have boring ones.
Cotter: I swear to God, every day is like another little venture. Right now were dealing with a large auto parts manufacturing company in Thailand. We got introduced by the former mayor of Cupertino. She saw the elf at the Google campus and said, “I have friends that want to do this badly.”
We’re also setting up another operation in Portland. The Governor’s wife is head of the Green Economy there. A couple days ago we were on the cover of the San Jose Mercury News. Not bad for a little startup from Durham.
And San Jose – we went there for a week, trained a couple guys how to build the ELF, now we’re building them there and doing test rides.
Procopio: I always wondered why you hadn’t ventured or even started out west. It seems like a more natural fit.
Cotter: Well, I happened to be here. I’ve owned a house around here for a couple decades. I was up in New York consulting on their bike-sharing program and I realized the market was there for a pedal vehicle that’s not a conventional bicycle.
And yeah, the Valley is the epicenter for electric vehicle technology, for sure. In fact, we have a good relationship with some of the engineers from Tesla now. It’s a wonderful experience, to have that kind of acceptance out there.
Procopio: So no regrets?
Cotter: (laughs) None. You know, it’s a big learning experience. Every day. Now we have the Governor of California’s office calling us with incentives and opportunities to do things out there as well.
Procopio: Wait. Wait. You just told me California is calling a North Carolina startup to recruit them.
Cotter: Right.
Procopio: That’s a little mind-blowing.
Cotter: Yeah. They saw an article and they said they’ve been following the ELF for a while and they said, “Let us know what we can do to help.” They called again after the Mercury News article. I said, “Let’s talk.”
To be perfectly honest, I always felt like once this starts developing inertia it will really roll. So everything I’m doing now I’m trying to do with an eye for four or five years out.
One of the unforeseen things, you’ll like this, our frame is sourced, extruded, formed, and manufactured in North Carolina, 99.3% North Carolina. We get one extruded piece out of China, 0,7%, and we got hit by Homeland Security for a 123% trade tariff.
They said, “Your material is at the docks. Come and get it. $24,000 fine.”
Procopio: Whaaaat?
Cotter: If I made the whole frame in China, no penalty. Because we do stuff with it here, that’s the penalty. It’s an anti-American manufacturing law in place. Now I have a trade attorney, he says, “I’ve never seen this law enacted.” One of the unforeseen things that pop up around the corner.
If I laid off 20 people and moved this to China, there’d be no penalty. Building stuff in this country is tougher than most places in the world — judging by my experience dealing with other countries.
Procopio: And this seems like the exact type of technology that the government should be promoting.
Cotter: Absolutely. Each one of these has the potential to mitigate six tons of CO2 per year. So out of 140 vehicles we’ve delivered, that’s somewhere like 750,000 tons of CO2 not entering the atmosphere in the first year, the potential anyway.
Part of the challenge is manufacturing in the US and part is creating a new product category.
Procopio: We went through that. And until we started doing Fantasy Football stuff for Yahoo, it was really tough to explain what we did. Do people get the ELF? Not the Governor of California, but the average person.
Cotter: I don’t know who the average person is yet. The early adopters get it, but now we’re dealing with the people a bump further into the mainstream, thinking about warranties, maintenance, things like that. So we have to take it a little more mainstream, how we sell it. Now that production is up, we’re focused on sales. It sounds ridiculous.
Procopio: No, that’s common sense. You’ve got the product down, now grow.
Cotter: Pretty much. We’re always doing rapid iterations as we go. Probably made a half-dozen changes this fall to make it better and better. Now we’re working on ELF 2.0, accessories and options. Trying to do most of it by hand.
When you take a chunk of your business and take it out of house, you lose control of it. Sometimes that’s fine, but it’s a risk. Our model is to build the molds and the jigs, then outsource everything else and bring it back in. If we do that, we’ll be able to speed up production and R&D.
Procopio: So that’s a pretty cool thing about what you’re doing — you can iterate on the fly and add custom or even new standard features as you go.
Cotter: Exactly, most of them have been new standard features. You saw the helicopter motor and the suspension.
Procopio: How did those come about? Did a customer ask for them?
Cotter: No, they were on the roadmap. We knew what we had to do but we had to wait until we could keep the price low. There’s engineering costs and time, additional weight, inefficiencies. We’re really finding that lot of people look at it like a micro-car. They want more battery packs, solar panels, all the accoutrements. The market is pulling people out of their cars.
Procopio: That’s what I thought would be the logical next step, is powering these things. You look at the Smart For Two and that just sees like an inefficient ELF.
Cotter: Right. Actually, my hat’s off to them. That originally started out built by Swatch, meant to be an electric car, then Mercedes bought it. It had all removable body panels, very modular.
Procopio: I can say this because I’m no longer a young entrepreneur, but you’re one of the older entrepreneurs in the Triangle. Do you feel like it’s in your blood?
Cotter: Absolutely. In college, I was building ice cream push-carts. I was making more money than my father while I was in college. I’d go home with $400 in quarters. But, you know… from the time I was in high school I had my own landscaping business, shoveled snow until it was pitch black. I was probably 12-13 years old making 70 bucks a day shoveling driveways.
Procopio: Have you ever thought about, “I have to give entrepreneurism up at some point?”
Cotter: I’ve been mostly self-employed my entire adult life. I’ve consulted, numerous clients, or on my own. After a while you figure out how to make it work for you. Back at a time when writers got paid good money, 30 years ago, I could write a story, make an extra 500 bucks.
Procopio: I’m just old enough to have made a dollar a word for writing when I first started doing it.
Cotter: It’s not a bad recommendation for entrepreneurs. I’d write what I know and it builds up your expertise, as I’m sure you’ve experienced. You’re seen as an authority and people know you can write.
Procopio: Yeah I just started writing to write. I couldn’t shut up and I didn’t suck at it. And it did open a lot of doors. And then I got into web content in the late 90s/early 2000s and took that entrepreneurially, so the two have always been connected. Now I’m just sort of documenting what’s going on here because I find it fascinating.
Cotter: The Triangle has really become a happening place. It always has been but now for a much wider circle of people. Part of that is the attraction of Clean Tech. There’s so much more of that sort of technology. Solar, smart home systems — whatever it is it’s here. It’s important for the Triangle to expand there, because that’s not going anywhere. It’s going to get bigger and bigger.
Procopio: So if you had to pick one thing to credit to your longevity as an entrepreneur.
Cotter: I’m on a mission. Climate change is going to be the issue for the next couple of lifetimes, that’s where I’d recommend entrepreneurs to go. It’s really important, I think, to find something you’re passionate about, not just monetary, that you can devote yourself heart and soul when the money’s not there, so you can persevere.
Like the Blues Brothers, we’re on a mission from God – not really, but we’re having fun doing it.
Editor’s note: Joe Procopio is a serial entrepreneur, writer, and speaker. He is VP of Product at Automated Insights and the founder of startup network and news resource ExitEvent. Follow him at Twiitter or read him at his website.
PREVIOUS INTERVIEWS:
- Justin Miller of WedPics
- Eric Boggs of RevBoss
