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Hyperloop Startups Are Starting to Throw Shade

"That's what breaking ground looks like." Hyperloop Tech CEO Rob Lloyd (right) said of the startup's test site in Nevada."That's what breaking ground looks like." Hyperloop Tech CEO Rob Lloyd (right) said of the startup's test site in Nevada.
"That's what breaking ground looks like." Hyperloop Tech CEO Rob Lloyd (right) said of the startup's test site in Nevada.Hyperloop Tech

Step aside, Nicki Minaj, Meek Mill, or whoever had the most recent rap feud—Hyperloop startups are trying their hand at beef.

Last weekend’s Hyperloop pod design contest attracted heavy hitters to what amounted to a coming-out party for the technology. During the event, Fortune sat down with the leadership of L.A.-based Hyperloop Tech and they had some tough talk for the very similarly named Hyperloop Transportation Technologies (or HTT).

“It feels like there’s some confusion between the company that’s building something, and the company that has people talking about building something,” said Rob Lloyd, Hyperloop Tech’s CEO.

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SpaceX and Tesla CEO Elon Musk released the original Hyperloop white paper in 2013, describing a system that would efficiently shoot hovering pods full of cargo or passengers through a depressurized tube at up to 700 mph. Musk made it clear he wouldn’t be building the system himself—he’s got a lot on his plate, after all. Instead, he challenged others in the tech community to develop the idea. Hyperloop Tech and HTT both launched soon after with the goal of getting pods into tubes.

The Hyperloop concept is attracting more and more support from investors, governments, business partners, and the public—hundreds of Texans poured into the public portion of last weekend’s event, some driving hours. The accelerating energy seems to have prodded Hyperloop Tech to get more aggressive about distinguishing itself from its main competitor, critiquing HTT’s business model, progress, and credentials.

Hyperloop Tech is a conventional startup that should soon close nearly $80 million in funding and currently has 109 full-time employees. HTT, led by CEO Dirk Ahlborn, organizes part-time volunteers through his JumpStartFund platform. Lloyd, who until last June was co-president of Cisco Systems, says that model simply can’t work for such a hands-on project.

“This is a physical thing we’re doing,” Lloyd said. “To move this along, you need capital, you need approvals, and you need people. And you can’t do that in a virtual community.”

“This isn’t Linux,” Lloyd emphasized, referencing the open-source operating system originally created by part-time volunteers. “We love the power of the crowd, but the crowd can’t weld.”

Lloyd is just one in a true murderer’s row of entrepreneurial and engineering talent that Hyperloop Tech has assembled. Also sitting in on the interview were CTO Brogan BamBrogan, formerly an engineer with SpaceX, Northrop Grumman, and Chrysler; and Shervin Pishevar, co-founder of both Hyperloop Tech and Sherpa Ventures. Sherpa’s broad portfolio includes pieces of Uber, OpenDoor, Meerkat, and Munchery.

Lloyd and BamBrogan also took issue with recent media reports saying that HTT was “breaking ground” on a test track in the planned Quay Valley development in California. Lloyd pointed out that HTT is actually still in the permitting process for that project. “(It’s) naïve to expect you can apply for permits in a municipality that doesn’t exist yet,” he said.

Hyperloop Tech, by contrast, has a site in Nevada, a state the team described as more cooperative on permitting than California. And it’s well-underway on actual construction of its test track.

“That’s what breaking ground looks like,” BamBrogan said as he shared photos of the Nevada site, complete with earthmovers and actual Hyperloop tube segments.

How will the Hyperloop work? Watch:

For all the bluster from Hyperloop Tech, HTT isn’t exactly a slouch. As The Wall Street Journal reported last year, HTT’s open model hasn’t kept it from earning partnerships with the likes of engineering software firm ANSYS (ANSS) and UCLA’s Suprastudio architecture program. In the same article, Ahlborn expressed his own frustration that Hyperloop Tech, founded after HTT, had selected such a similar company name.

Hyperloop Tech’s rhetoric may even show, albeit in a backhanded way, that it takes HTT seriously as a long-term competitor. And ultimately, BamBrogan was sure to emphasize that the rising tide of Hyperloop activity legitimizes the broader project. “Generally we love competition,” he said, “and we love the greater Hyperloop system building up.”