Trevor Milton is worth $1.1 billion today, but to any spectator, it’s clear that his journey was far from smooth sailing. From losing his mother to cancer early in his life to failing two consecutive times to keep doors open at his previous startups — and losing his house, car, and other personal assets in the process — nobody could reasonably expect that Milton would bounce back and start Nikola Motor Company, a six-year-old hydrogen truck maker now worth over $3 billion.
Recently, I sat down (remotely, of course) with Milton, who leads Nikola Motor Company as CEO today, to get a behind-the-scenes look at how he approached hiring the first crucial engineers for what is a highly-technical product driven by Chemical, Mechanical, and Software Engineering, how Milton and his team grew Nikola Motor Company to over $10 billion in pre-order revenue, and his ambitious plan to win against Tesla
in the hypercompetitive trucking market. But to truly get the full picture, we have to go back to Milton’s darkest days.
Milton Experiences Two Back-To-Back Failures … And Loses Everything Each Time
Long before Amazon
(and even eBay) rose to prominence, Milton took a stab at starting an eCommerce company, Upillar, that allowed users to checkout only once with items from multiple vendors. At practically lightning speed, Milton saw the company go from inception to over 80 million online visitors per month, he tells me.
But it all came crashing down when the company’s capital dried up and it was unable to keep up with demand. “We had to let everyone go — all those hard-working people who believed in my vision and company, and I personally lost everything I had to my name, including family money used to start the business,” Milton recounts.
It was the first blood; for Milton, it was time to rebuild.
So, soon after, he started dHybrid, a company that wanted to reduce fuel costs and clean up emissions by taking diesel engines and modifying them to run on diesel and natural gas.
Agreements were signed with trucking companies to outfit their trucks for an amount north of $100 million, Milton tells me, but still no luck: “After entering into a deal with an investor for a large stake in dHybrid, it was later discovered that the investor was taking our intellectual property. As a result, the only option was to sue that investor and close our company. Litigation still continues today and is a reminder of yet another challenging time of my life, one that resulted in losing everything I had just worked to rebuild.”
The Unlikely Beginnings For Nikola Motor Company
While dHybrid ultimately failed, Milton got a taste for what the age-old trucking industry needed and knew he was on track. So he decided to relaunch the company as dHybrid Systems, which was similar to the previous company except with a greater focus on building natural gas and hydrogen storage systems.
“Thankfully, the timing for the natural gas market was perfect and revenue grew. dHybrid Systems was acquired by Worthington Industries and Nikola Corporation was the result of this journey,” Milton tells me.
Truly, the timing could not have been better. When Milton came out of the exit with an intent to start another company, which would become Nikola Motor Company, it had the opportunity to become the first company to build the first zero-emissions truck.
That it did.
Being the first mover in the market, Nikola Motor Company gained just enough traction to hire the PhDs and other expert resources to get the company to production. And the importance of teamwork has stuck with Milton since.
But as it related to team-building, Milton knew there would be one big challenge: “What top talent from major [Original Equipment Manufacturers (OEMs)] would consider leaving, let alone leave to join me on this crazy journey that had no guarantees beyond my belief in this bold idea? Very few … at least that is what I believed.”
The Unconventional Approach Milton Took To Hiring In The Early Days
Recognizing that what Nikola Motor Company was doing in those early days sounded too much like science fiction and that it lacked credibility to win over industry veterans, Milton took an entirely different approach to hiring: “I began hiring engineers that had zero experience in the automotive world,” Milton tells me.
With that methodology, he hired Kevin Lynk, who would become the company’s Chief Engineer and still does today, playing what Milton calls an integral role in Nikola Motor Company’s success.
“I needed [people] who believed anything was possible, [people] who did not have automotive experience to limit us by being bound to what had been done in the past. I essentially needed [people] equally as naïve as myself.”
Notably, Elon Musk, Martin Eberhard, and Marc Tarpenning were also passionate and interested in leading the shift to electric vehicles in Tesla’s earliest days but also had no prior automotive industry experience.
And like Tesla in its early days, Nikola Motor Company focused on building a superior product as opposed to pushing marketing or sales aggressively.
A Focus On Product Engineering Banked Nikola Motor Company $10 Billion In Pre-Sales ‘Without A Single Salesman’
In fact, Nikola Motor Company banked over $10 billion in pre-order revenue “without a single salesman in place,” Milton tells me, including a whopping $2.3 billion in pre-order revenue for the company’s first semi-truck alone.
To do that, Nikola Motor Company needed to think differently and offer something entirely different from the status quo. Milton knew “It would be impossible to compete if our business was only about building a truck. Instead, the entire ecosystem that exists within the trucking industry had to be solved. Specifically, the current business model that positioned fuel as more important than the truck.”
“We turned the status-quo on its head by creating a model focused around stability in freight. Once this happened, the orders surpassed $10 billion and as a result we had to hold on taking more orders due to the backlog.” While it’s no easy task to hit those numbers, Milton attributes Nikola Motor Company’s success to its belief that “a company’s product should sell itself,” one not dissimilar to Tesla’s approach to sales.
Despite the similarities between Tesla and Nikola Motor Company, the two companies’ products are quite different — a differential that Milton believes could help his company gain an edge over Elon’s.
The Plan To Win Against Tesla — And Next Steps For Nikola Motor Company
Tesla and Nikola Motor Company both offer battery-electric trucks, but Nikola views the network as more important than the truck, Milton tells me. “And, although hydrogen is steadily becoming more efficient to produce, the energy today is still less expensive, which is an advantage over battery-electric trucks that charge in cities.”
“An additional advantage is that the Nikola trucks weigh less and cost less to operate than Tesla’s trucks. The main value, however, comes in controlling the energy that the trucks consume,” Milton adds.
But though Nikola Motor Company has these advantages, it isn’t without its unique challenges. “How fast [Nikola] can roll-out the hydrogen network” will make or break the company.
In recent news, Nikola Motor Company recently announced a merger with VectoIQ, a publicly-traded Special Purpose Acquisition Company, which also entails a $525 million private placement of common stock.
With that fundraise, Nikola Motor Company plans to accelerate its portfolio of battery-electric and hydrogen fuel-cell electric vehicles and roll out infrastructure for hydrogen fueling stations.