What Happened To Arrivo & Why Did It Fail?

Arrivo, founded in 2017 by former SpaceX engineer Brogan BamBrogan, aimed to revolutionize transportation with a magnetized track system to alleviate traffic congestion. Despite initial optimism and a $1 billion line of credit, the company faced financial difficulties and shut down in late 2018, laying off all employees.

What Was Arrivo?

Arrivo's main product was a high-speed, above-ground transportation system using magnetized tracks and autonomous vehicles. Its unique value proposition lay in its promise to alleviate traffic congestion with a futuristic twist on the Hyperloop concept. Notably, Arrivo secured a $1 billion line of credit and planned a test track in Colorado.

What Happened to Arrivo?

The story of Arrivo is a compelling tale of ambition, innovation, and eventual downfall, marked by several key phases:

• Initial Ambitions and Funding: Arrivo was founded in 2017 by former SpaceX engineer Brogan BamBrogan with the goal of revolutionizing transportation through a Hyperloop-style system. The company secured a $1 billion line of credit from Genertec, a Chinese infrastructure company, and planned to build a $15 million test track in Colorado.
• Technological Innovations: Arrivo's concept involved using specialized autonomous vehicles on a magnetized track alongside highways, differing from the traditional Hyperloop technology that uses low-pressure tubes. This innovative approach aimed to alleviate traffic congestion and provide high-speed transit.
• Financial Struggles: Despite its promising start, Arrivo faced significant financial challenges and was unable to secure Series A funding. The company furloughed all employees in November 2018 and eventually shut down in December 2018, with remaining employees informed via text messages.
• Internal Conflicts: The company experienced internal issues, including a tense work environment and erratic behavior from BamBrogan, who reportedly used an axe to relieve stress. These internal conflicts contributed to the company's instability and eventual collapse.
• Aftermath and Acquisition: Following its shutdown, Arrivo's intellectual property was acquired by rLoop, a Reddit-born engineering collective. rLoop is considering reviving some of Arrivo's projects, such as the test track in Denver, Colorado, and may hire back some of Arrivo's former employees.

When Did Arrivo Shut Down?

Arrivo officially shut down on December 14, 2018, as reported by The Verge. The company faced significant financial difficulties, leading to the furlough and eventual layoff of all employees by the end of 2018.

Why Did Arrivo Shut Down?

1. Funding Shortfalls:

   Despite securing a $1 billion line of credit from Genertec, Arrivo failed to obtain Series A funding, which was crucial for its operations. The lack of additional financial backing led to the furlough and eventual layoff of all employees, culminating in the company's shutdown in December 2018.

2. Leadership Instability:

   Brogan BamBrogan's erratic behavior and controversial actions, including using an axe to relieve stress, created a tense work environment. His history of legal disputes with his former company, Hyperloop One, further undermined confidence in his leadership, contributing to internal conflicts and instability.

3. Technological Hurdles:

   Arrivo's ambitious plan to develop a magnetized track system faced significant technological challenges. The complexity of implementing such a system, combined with the high costs and technical uncertainties, made it difficult to attract sustained investment and support from stakeholders.

4. Strategic Missteps:

   Arrivo's pivot from the original Hyperloop concept to a less ambitious private freeway toll lane scheme confused investors and stakeholders. This strategic shift diluted the company's vision and made it harder to secure the necessary funding and support to continue its projects.

5. Poor Communication:

   The decision to inform employees of layoffs via text messages was widely criticized as unprofessional and disrespectful. This approach damaged the company's reputation and morale, further exacerbating the challenges it faced in maintaining a cohesive and motivated workforce.

Lessons Learned from Arrivo's Failure

• Secure Sustainable Funding: Ensure a robust financial plan that includes diverse funding sources to avoid reliance on a single line of credit.
• Maintain Leadership Stability: Cultivate a stable and professional leadership team to foster a positive work environment and build investor confidence.
• Communicate Transparently: Use clear and respectful communication methods, especially during critical moments, to maintain trust and morale among employees.
• Stay Focused on Vision: Avoid diluting your core vision with frequent strategic pivots that can confuse stakeholders and investors.
• Address Technological Feasibility: Conduct thorough feasibility studies to understand the technical challenges and costs associated with your innovation.
• Foster a Positive Work Culture: Create a supportive and stress-free work environment to enhance productivity and employee satisfaction.
• Plan for Contingencies: Develop contingency plans to manage unexpected financial or operational setbacks effectively.

We Shut Down Startups

Arrivo's downfall underscores the complexities and challenges that startups face, from securing sustainable funding to maintaining leadership stability. If you're navigating similar turbulent waters, Sunset can help you manage the legal, tax, and operational burdens of winding down your startup.

Don't let the stress of shutting down overwhelm you. Book a demo with Sunset today and move on to your next venture with confidence.