Meet the 26-year-old billionaire who tries to take on Elon Musk and Tesla

In an interview with MarketWatch, Russell spoke about remote working, why Elon Musk is wrong about self-driving vehicles, and what it’s like to be a billionaire.

MarketWatch: How has the COVID situation been for you and your business?

Russell: You cannot let him interrupt everything that is going on in the company. There are still deadlines and deliverables that we must meet. We were able to meet them all, but there is no doubt that it was an intense process. I always work closely with the team, as we go through things.

MarketWatch: You started your Luminar business as a teenager. Why?

Russell: What particularly focused me on Lidar (laser technology) and more particularly on Lidar for autonomous vehicles, is simply the enormous societal and economic impact that you can have. It became clear that those $ 100,000 roof rack setups of giant slewing systems and other things were never going to end up in production vehicles let alone meet required performance and safety specifications.

I’ve always thought of things differently; I was building supercomputers when I was 9, 10, 11.

MarketWatch: Why lasers?

Russell: I saw it as a new frontier for the way the industry was evolving. This is something that I was really surprised to see despite the importance and significance it was to dictate over the next two decades at how few people there were in the world of photonics. Most of the time, the kind of research that’s going on doesn’t really find its way into the real world. It kind of fits in this university cycle. You can get a good article published in Nature Science or whatever, but if you want to see it proliferate around the world and make a difference, this is where it all makes sense on the corporate side.

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MarketWatch: How has your management style changed during the pandemic?

Russell: At the most fundamental level, it remains unchanged. Our deadlines have not changed, our deliverables have not changed. What has changed of course is being remote, we probably have a majority of our remote workforce. It’s really different, but at the end of the day you have to work even more closely with your leadership team. You want to make sure you don’t lose that element of creativity – from those personal interactions.

There are times when you can form small groups of people in person to work with and quarantine together. It’s not just an “all on” or “all off” binary thing and that’s what we’ve learned.

MarketWatch: What pitfalls do you see in working remotely?

Russell: In the early stages of the business, I think it could be catastrophic. If you don’t have that ability to have quick feedback and a more innovative mindset and problem-solving mindset, it could be a huge challenge to successfully achieve a vision.

The reason this has been less damaging to us is that we are focusing very specifically on execution at this point. For those who don’t have a fully developed product, I think this can have an effect on the timelines that people were thinking about as well as the development cycle in general.

What he did was forced companies in the industry to take a step back and think more existentially – think about the technologies that will define the next 10 years instead of the next 5.

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MarketWatch: Why go public and why use a PSPC?

Russell: We’ve always said internally that the first opportunity for an AV company to go public and for that to make sense would be after a production victory because production deals bring you long-term income.

The reality is that any income in the audiovisual space today is only R&D and not really an indication of anything in the future, maybe beyond a minimum baseline. These are production agreements. This was the catalyst for the IPO – of course, it’s nice to be able to make $ 600 million in gross proceeds for the company. In the private world, there are only a limited number of people who can write checks for $ 600 million.

MarketWatch: After Luminar went public, there were a lot of “Austin Russell Billionaire” stories. Did you pay attention to this?

Russell: Yeah (laughs) I did. The important thing is that this is a milestone in terms of value creation for the entire company. I was able to keep a significant part of the capital of the company, often the founders end up being diluted to nothing over time, which is really unfortunate.

The overall dilution for our employees and I was actually surprisingly minimal compared to other types of businesses. It couldn’t be more exciting for me at the end of the day. The IPO itself isn’t about me – it’s the team and the journey.

MarketWatch: The list of billionaires under 30 was basically Snapchat SNAP,
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founder Evan Spiegel, Kylie Jenner and you.

Russell: We’re basically all the same (laughs). Here’s what I’m going to say, I have a lot of respect for the Zuckerbergs and Bill Gates of the world, guys who have created tremendous value in their careers. Einstein explained how one of the wonders of the world increases interest in that you can create significant value over time the sooner you start. It really is special. I think I missed Zuckerberg by about a year, so I lost on that one.

MarketWatch: Tesla TSLA,
-2.75%
CEO Elon Musk and others have criticized the lidar technology your company uses for its vehicles. Why are they wrong?

Russell: Our other 50 business partners and seven of the world’s 10 largest automakers would likely disagree with Elon as well as virtually any industry expert. I think he’s sort of on an island there. Back when Elon started with his anti-lidar ideas, he promised the world that he could deliver that full self-driving stack from that basic camera solution.

Cameras are really good at seeing certain things in 2D and sort of understanding the general picture of what was going on. Not very precise and reliable. These are orders of magnitude different from what you can do with lidar and what is actually needed to solve a stand-alone problem.

MarketWatch: What doesn’t Musk see?

Russell: What Tesla has today, what they call full autonomous driving, you don’t need lidar. The problem is, it’s not fully autonomous (laughs), it’s actually not at all autonomous. This is where I think they have attracted huge criticism in the industry with this branding approach not consistent with what is delivered.

Lidar gives you true 3D understanding, not 2D understanding. Instead of keeping your hands on the wheel and your eyes on the road at all times, take your hands and eyes off, use your phone, read a book, watch a movie. In fact autonomous.

MarketWatch: You mainly deal with AV, but do you think there is an EV bubble?

Russell: I think (long pause).

MarketWatch: I understand this is a loaded question.

Russell: It’s totally true, but it’s a good question to ask. I think everyone is asking this question. The nature of electric vehicles is clearly incredibly promising. It will clearly replace combustion engine vehicles. Is he going to do it at an extremely fast rate like a wildfire? Probably not. Is this going to happen over time and will there be massive value creation over time? Absolutely. I just think people are looking further into the future now than they used to be and that’s why you are seeing this crazy exponential increase in value.

I actually see a bigger trend just because of the applicability of the technology. It is interesting to me that electric vehicles have received a lot of attention. The VAs not quite as much.